Hunshuifas third empty report was directed at Ferroanta: the charges were inaccurate

 Hunshuifas third empty report was directed at Ferroanta: the charges were inaccurate

Its worth noting that its not difficult to find that FILA Filas sales data, as well as its share of the groups revenue, have always been mysterious: Anta did not disclose specific data. At the same time, on the issue of the ownership of Philadelphia, Antas financial statements before 2012 all have similar expressions of the groups distributors operate FILA stores, but the relevant statements in the financial statements in 2012 and beyond are gradually blurred.

The statement that muddy water calls Anta is self-contradictory

In the third short-selling report, Muddy Water said investors could not believe the number of Anta Fila stores. According to the report, Su Weiqing, an independent third party, owns 46 Philadelphia stores in Beijing, but Anta has always claimed to own all of them. Obviously, Anta either lied about Su Weiqing or about the number of Philadelphia stores. Investors cant believe the number of Anta Filipino stores. Anta probably just fabricated numbers of Filipino stores that do not belong to its own company, and even made fraudulent financial reports for the Filipino stores.

Who is Su Weiqing?

Hunshui said in the report that after interviewing Antas Investor Relations Department, it has confirmed that all FILA stores are owned and operated by Anta. At the same time, Hunshui also cited Anta Sports Chief Financial Officer Lai Shixians speech at a telephone conference that the company had no plans to launch a wholesale business for FILA brand and would continue to adopt a direct business model. Based on the above, Muddy Water concludes that Anta has obviously lied about the ownership of FILA stores. Investors can not rely on FILAs finance, and Antas finance is totally unreliable.

At noon on July 11, Anta Sports issued a clarification announcement saying that the board strongly denied the allegations in the report, believing that the allegations were inaccurate and misleading. However, the clarification announcement did not contain any information about the Philadelphia business. So, in view of the question of the ownership of the business of Philadelphia from Muddy Water, does Anta have any further explanation? Earlier in the afternoon of July 11, Daily Economic News contacted Anta, saying that Hong Kong stock announcement shall prevail.

The Daily Economic News reporter noted that Antas Philadelphia business had previously been questioned by Blue Orca Capital, a betrayal agency. On May 30, Soren Aandahl, founder of Blue Orca Capital, shared his short Anta report at the Sohn Hong Kong Investment Forum in 2019. He questioned the opacity of the mainland revenue of Antas FILA Fille brand and believed that Antas share price had a 34% drop, worth only HK$32.93 per share.

Philadelphia, the mysterious meritorious performer

Philadelphia, an Italian sporting goods brand positioned in the high-end market, was acquired by Anta in 2009. At that time, Anta said in its 2009 performance announcement that the acquisition provided the group with an opportunity to cover the high-end sports goods market in China. At the same time, Anta said that in order to further enhance the exposure of FILA and influence the young elite group in Chinas high-end consumer market, the group has re-positioned the FILA brand to make its image in China younger.

Daily Economic News reporter consulted Anta Sportss related financial reports and found that FILA Filas sales data and its share of the groups revenue have been mysterious: Anta did not disclose specific data.

However, Anta Sports executives had vaguely disclosed Philadelphias sales performance at a performance conference. Daily Economic News quoted other media reports that Zheng Jie, president of Anta Group, mentioned at the mid-term performance conference in 2017 that FILAs revenue share was close to 30% of Antas revenue of 7.32 billion yuan, or 2.196 billion yuan. At the mid-term performance conference in 2018, Zheng Jie revealed: FILAs growth rate has reached more than 85%... FILA 3 months new products sold out (rate) in more than 60%.

In the outside world, Antas acquisition of Philadelphia is undoubtedly successful, and the success of Philadelphia has to some extent become the base of Antas multi-brand strategy. Following Ferrar, Antas acquisition accelerated: in 2015, Anta completed the acquisition of the British outdoor leisure and mountaineering brand SPRANDI; in 2016, Anta established a joint venture company to start DESCENTE business in China; in 2017, Anta acquired KINGKOW business and set up a joint venture company to operate KOLONSPORT business in China; In 2019, Anta completed its bid for Amafen Sports.

From the number of stores of various brands, Philadelphia is the leader besides Antas main brand. According to the companys annual report for 2018, as of December 31, 2018, Anta had 1652 Philadelphia stores in Mainland, Hong Kong and Macao, while the number of professional sports brands DESCENTE, KINGKOW and KOLONSPORT were 117, 77 and 181, respectively. At the same time, Anta expects the average growth rate of all brands to be 15%-20% by 2020, while the average growth rates of FILA, FILAKIDS and FILAFUSION are expected to exceed 30%.

Source: Daily Economic News Responsible Editor: Yang Bin_NF4368