Recently, Yamafin Sports, the parent company of sports brands such as Archaeopteryx and Salomon, released its first annual financial report since its listing on the US stock market: it achieved operating revenue of 4.368 billion US dollars in 2023, a year-on-year increase of 23%; The adjusted operating profit margin was 9.9%, compared to 8.5% in the same period last year; The net loss was $209 million, which narrowed by 17.4% year-on-year. The unique brand portfolio led by Archaeopteryx continues to maintain strong momentum, with revenue growth in the Greater China region leading the way among major regional markets, increasing by 61% year-on-year to $841 million.
Zheng Jie, CEO of Yamafen Sports, stated that in 2023, Yamafen Sports's sales and profit growth have shown strong daily performance. With the transformation towards a brand direct operation model, the company is still in the early stage of profit scale growth. "Under the leadership of our flagship brand, Archaeopteryx, our unique combination of high-end sports and outdoor brands is ready to embark on another year of strong growth in the 2024 fiscal year."
Greater China market revenue increased by 61%
As the parent company of sports brands such as Archaeopteryx and Salomon, the first annual "report card" of Yamafin Sports after its listing is quite impressive.
According to the financial report, the revenue of Yamafin Sports in 2023 was 4.368 billion US dollars, a year-on-year increase of 23%. The adjusted net loss for this year was $135 million, compared to a net loss of $30 million in the same period last year. The adjusted gross profit margin is 52.5%, an increase of 240 basis points from the previous year. This is mainly due to the fact that the company's highest gross profit margin business, Archaeopteryx, has grown much faster than other brands. In addition, the reduction of logistics costs, improvement in procurement performance, and the combination of channels and regions have also driven the growth of gross profit margin.
In 2023, the adjusted gross profit margin of Yamafen Sports increased by 240 percentage points year-on-year to 52.5%. Yamafen Sports revealed that the group's gross profit margin growth during the reporting period was mainly driven by the Archaeopteryx brand, while reducing logistics costs, improving procurement performance, and combining channels and regions also drove the growth of gross profit margin.
The company's revenue growth in the Greater China market ranked first among major regional markets, with a year-on-year increase of 61% to 841 million US dollars; Ranked second in revenue in the Asia Pacific region with a year-on-year growth rate of 40%; EMEA (Europe, Middle East and Africa) and the Americas saw year-on-year revenue growth of 14% and 15%, respectively, to $1.45 billion and $1.727 billion. From a channel perspective, in the Americas and Greater China region, DTC (direct to consumers) channel revenue led by Archaeopteryx increased by 49% year-on-year to $1.559 billion. The e-commerce business has also continued the trend of double-digit growth. With the growth of Greater China and the Asia Pacific region, wholesale revenue has increased by 12%.
According to business division, the revenue of "functional clothing" led by Archaeopteryx as the core brand was 1.59 billion US dollars, a year-on-year increase of 45%. The revenue of "Outdoor Performance", with Salomon as the core leading brand, was 1.67 billion US dollars, an increase of 18% year-on-year, with Europe, the Middle East and Africa (EMEA), Greater China, and the Asia Pacific region leading in growth; The revenue of "ball sports" led by Weiersheng as the core brand was 1.11 billion US dollars, a year-on-year increase of 7%.
Zheng Jie stated that the company views Archaeopteryx as a "breakthrough growth story" that brings unprecedented growth and profitability to the outdoor industry.
On January 20th, the world's largest flagship store of the Archaeopteryx brand, the Archaeopteryx Museum, opened on Nanjing West Road in Shanghai. It is reported that this is the world's first Archaeopteryx store named after a "museum", with a total area of about 2400 square meters and four different themed areas. The store adopts a one-on-one shopping guide system, which is mainly divided into two categories: one is a product guide that provides product suggestions for consumers with purchasing needs; One type is a store tour expert who provides consumers with content services such as explaining brand history and store design concepts. At the financial report meeting, Yamafin Sports announced that it will open more large Archaeopteryx specialty stores in 2024 than ever before. The company believes that Archaeopteryx has a long development path in every region, with less than 50 stores in North America and the potential to open more than 200. At present, Archaeopteryx has 63 self operated retail stores in China, accounting for nearly half of the total number of stores worldwide.
Yamafen Sports continues to lead the high-end sports and outdoor markets, with the industry showing a healthy growth trend. Driven by professional functional sports line products, Yamafen Sports's brands are deeply loved by consumers from all over the world. Although Yamafen Sports still has a relatively limited share in the global market. Looking ahead to the future, we are confident in the prospects of Yamafen Sports, thanks to the rapid development of the most profitable brands, regions, channels, and categories Zheng Jie said.
Assist ANTA Group in its globalization strategy
Regarding the first annual financial report of Amazon Sports after its listing, Andrew Page, CFO of Amazon Sports, stated that in 2023, Amazon Sports achieved steady growth in both revenue and EBITDA profit margins, bringing financial returns to the group through its transformation. "We completed our IPO (initial public offering) in early February, optimizing the group's capital structure by repaying approximately $4 billion in shareholder loans through equity financing. Additionally, we refinanced the remaining $1.8 billion in third-party loans, obtaining more favorable loan conditions and extending the maturity date to 2031."
Yamafin Sports officially landed on the New York Stock Exchange on the evening of February 1st, raising a total of 1.3 billion US dollars and issuing a market value of 6.3 billion US dollars (approximately 45 billion RMB), making it the largest IPO in the world since September 2023 and also the largest IPO in the world during the same period.
Industry analysis suggests that the overseas listing of Yamafen Sports signifies the initial success of ANTA Group's attempt at globalization, and the company's subsequent development will also have a significant impact on ANTA Group. Guangfa Securities believes that the listing of Yamafen Sports will not only help accelerate its brands to seize the high prosperity opportunities in the outdoor market, but also help reduce debt burden and increase the group's financial report profits.
After the listing of Yamafin Sports, ANTA Group announced as a cornerstone investor that it has decided to purchase 16.92 million ordinary shares of Yamafin Sports, with a total investment amount of 220 million US dollars. After the purchase, the group will hold a total of 220 million shares of common stock in Yamafen Sports, equivalent to approximately 44.74% of the total issued shares of Yamafen Sports. In future financial reports, ANTA Group will list Yamafen Sports as an investment in a joint venture.
According to the prospectus, after the listing of Yamafen Sports, Anta Sports, Fangyuan Capital, Anamed Investments, and Tencent held 44.5%, 12.7%, 16.3%, and 4.5% of shares respectively. On February 10th, a document from the US Securities and Exchange Commission showed that Tencent had increased its stake in Amazon Sports to 6.5%.
Guoxin Securities believes that Yamafen Sports has demonstrated excellent growth potential in this performance, with revenue and profit in 2023 approaching the upper limit of previous performance forecasts. From a segmented perspective, Archaeopteryx and the Chinese market remain important growth and profit drivers for the company. Additionally, from a planning perspective, the growth potential of the North American market is promising. In the view of Guoxin Securities, the company's revenue growth target for 2024 and the next 5 years is leading the industry, demonstrating the company's confidence in the outdoor sports industry and brand operation capabilities. We are optimistic about the increase in profit contribution of ANTA Sports from the joint venture company starting in 2024, and the potential for the long-term development of ANTA Group's international business.