Anta's profit jumps 25pc

Business | Stella Zhai 23 Jul 2019

Mainland sportswear producer Anta Sports (2020), which is embattled with short-seller's attacks, expects its net profit for the first half to rise at least 25 percent from 1.95 billion yuan a year ago.

The expected increase is mainly attributed to sales growth of Anta branded and other branded products, which has resulted in more than 35 percent increase in revenue compared to the same period last year, as well as the improvement in operating profit margin, said Anta in a positive profit alert after the trading session yesterday.

Meanwhile, the company vigorously denied allegations contained in short-seller Muddy Waters' fifth short-selling report, considering them to be inaccurate and misleading.

Muddy Waters accused that the third parties claimed by Anta are "secretly" under the company's control, and believes that ANTA shifts costs from its production entities onto this supplier. The largest purported supplier is owned by a proxy, Peng Qingqi, a senior Anta employee, said the short-seller.

The battle kicked off on July 7 when Muddy Water accused Anta of using "secretly controlled Tier 1 distributors to fraudulently boost its margins". While another short-seller, Blue Orca Capital, had also cast doubt on Anta's revenue in May that Anta dismissed as "inaccurate and misleading".

Shares of Anta rose 1.87 percent to HK$57.3 yesterday before it released the positive profit alert.

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