The sports industry is worth billions of dollars, and regularly attracts big names and stars who endorse products for companies. With a healthy lifestyle becoming increasingly in fashion, many sports companies are seeing increases in sales and profits.
Investors who are scouting around for companies within this industry should focus their attention on sports footwear and apparel companies, as these companies are a direct beneficiary of the push toward a healthier lifestyle. As China continues to grow, the middle-class segment has also expanded significantly, contributing to higher demand for sportswear and shoes as more people take on more active lifestyles.
Here are four companies that investors can look at in order to gain exposure to this promising sector.
1. Li Ning Co. Ltd
Li Ning Co. Limited (2331 0.46%) is a leading sports brand in China that manufactures sporting goods including footwear, apparel and equipment for professional and leisure purposes. The company endorses a number of athletes and teams, both in China and around the world.
For Li Ning's H1 2019 earnings, revenue jumped 32.7% year-on-year to RMB 6.2 billion (US$877.5 million), while operating profit surged 130.6% to RMB 678 million. Net profit almost tripled from RMB 268.5 million to RMB 795 million as a result of an almost tenfold increase in the share of profits from equity-accounted investments.
2. ANTA Sports Products Ltd
ANTA Sports Products Ltd (2020) is a leading sportswear company in China. ANTA is engaged in the design, development, manufacture and marketing of ANTA-series sportswear to the mass market. The group has brands such as ANTA, FILA and KINGKOW.
For its H1 2019, ANTA reported a 40.3% year-on-year surge in revenue to RMB 14.8 billion, while operating profit jumped 58% year-on-year to RMB 4.26 billion and net profit increased by 27.7% year-on-year to RMB 2.48 billion.
3. Yue Yuen Industrial (Holdings) Ltd
Yue Yuen Industrial (Holdings) Ltd (551) is a Taiwanese footwear manufacturer headquartered in Hong Kong. It is a global leader in the manufacture of athletic and casual/outdoor footwear and has a diversified base of customers. The group is the largest branded athletic and casual footwear manufacturer in the world.
In its recent H1 2019 earnings, Yue Yuen reported a 6.3% increase in revenue to US$5.07 billion, but recurring profit attributable to shareholders declined by 11.8% year-on-year to US$145.5 million. Its interim dividend per share was kept constant at HK$0.40.
4. Xtep International Holdings Limited
Xtep International Holdings Limited (1368 -0.85%) is a leading multi-brand sportswear company and engages in the design, development, manufacture, sales, marketing and brand management of sports products. The group has an extensive distribution network of over 6,300 stores covering 31 provinces in Mainland China and overseas.
For H1 2019, Xtep reported a 23% year-on-year improvement in revenue to RMB 3.3 billion, while operating profit also increased in line with revenue, rising 21.2% year-on-year to RMB 717.3 million. Net profit attributable to shareholders increased by 23.4% year-on-year to RMB 463 million.
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