Muddy water again! 100 billion white horse stocks were short sniped again! The share price plunged by 8% and the trading was suspended urgently, and the market value evaporated by more than 10 billion!
Source: China Fund News
Another Chinese company has been targeted by overseas short selling institutions. This time, it is still called the big white horse stock nine times in eight years by investors!
On July 7, muddy waters, a well-known short agency, released the latest report that Anta injected profits by controlling most primary distributors, and suggested shorting Anta sports. On the morning of July 8, Anta sports Hong Kong stock fell sharply, and the share price once plunged more than 8%.
As of noon closing, Anta Sports quoted HK $51.25, down 7.32% from the previous trading day, and the market value evaporated HK $11 billion.
Subsequently, Anta Sports issued a suspension announcement that the trading of the shares of the applicant company began to stop briefly at 1 p.m. this afternoon. As of press time, Anta sports has not made a direct official response to the above short selling report.
Muddy water institutions short Anta Sports
Directly pointing to the company's' financial data is not credible '
Following Bosideng's short crisis, another domestic sports brand Anta also encountered short selling resistance from overseas institutions recently.
In this short report, muddy water pointed out that although Anta is an entity enterprise from the perspective of marketing and operation. However, behind the entity operation, Anta falsely increased its profit margin by privately controlling primary dealers, and the profit margin of its leading industry is full of water. Therefore, muddy water believes that investors cannot trust the financial data of Anta sports.
Muddy water clearly stated in the above report that it has mastered practical evidence to prove that Anta has controlled a large number of its dealers. There are 27 of them, and 25 of them belong to first-class dealers. In terms of total volume, Anta controls about 40 dealers, of which more than 40 are first-class dealers. The dealers controlled by Anta account for 70% of the sales of Anta brand.
For Anta's previously claimed independence of primary dealers, muddy water pointed out that 'this is a lie'. The report believes that Anta's control of primary distributors has been a matter of mutual knowledge among senior managers, and these distributors will be called 'subsidiaries' in private. Muddy water believes that Anta manipulates its financial performance by controlling primary dealers.
In order to prove the authenticity of the above allegations, muddy water also said in the above report that it had consulted the documents, loan reports and articles on the Internet of the State Administration for Industry and commerce, and interviewed the senior management inside Anta and the managers of the original primary distributors. These interviewees all admitted that Anta controlled the dealers.
After the release of the short report, the trend of Anta sports Hong Kong stocks was obviously affected by bad news. On July 8, Anta sports Hong Kong stock fell sharply shortly after the opening, and once plunged more than 8%. As of noon closing, Anta Sports' share price was HK $51.25, down 7.32%, and the market value evaporated by more than HK $11 billion.
In the afternoon, Anta Sports issued a suspension announcement, saying that the trading of all structural products related to the company will be temporarily stopped from 1 p.m. today (July 8). The above suspension notice points out that Anta sports is preparing to respond and clarify "a report that the company believes has false and misleading information". Short three times in 13 months
False high income and profit become a concern
In fact, this is not the first time Anta sports has encountered short selling.
On May 30 this year, the person in charge of blue Orca capital, a short selling institution, publicly questioned the corporate governance of Anta sports and the opaque income of its brand FILA at the investment forum. It is expected that the share price of Anta sports will decline by 34%, and investors are advised to sell short. On the same day, Anta sports once fell more than 12%, reaching a low of HK $43.5.
The official pointed out that previously, Anta Sports executives disclosed in public that Philharmonic contributed more than 10 billion yuan to Anta in 2018, but Anta sports did not disclose more specific income and data of Philharmonic. Accordingly, the agency believes that Philharmonic's income in the mainland is exaggerated by Anta and is opaque.
After the above short selling views were reported by the media, Anta Sports subsequently issued a Clarification Announcement, saying that the board of directors strongly denied the relevant speculation in the report and believed that the relevant speculation was inaccurate and misleading. Subsequently, Anta Sports' share price began to repair, and the share price rose all the way to the recent high of HK $55.10.
In June last year, the short agency GMT research also questioned the incredible high profit margin of the company. The above institutions pointed out that Anta Sports' operating profit was too high, there were a large number of abnormalities in cash or prepayments, and many problems such as a large amount of cash flow and a low proportion of inventory relative to income were derived in order to cooperate with the virtual increase of income. In this regard, the agency's final rating of Anta is to sell and lowered its share price to HK $10 per share.
For the above empty talk, Anta sports also strongly denied that the company's Hong Kong stock price has not been significantly affected.
Foreign institutions raise target prices
Anta's value is still favored by many parties
However, there is not much attitude towards and short institutions. Recently, a number of foreign banks and investment institutions have highly recognized the future value of Anta sports and moderately raised the target price.
On July 5, Deutsche Bank reported that it raised the target price of Anta Sports stock from HK $45.5 to HK $50 and maintained the buy rating.
On June 28, Goldman Sachs released a report that it gave Anta sports a 12-month target price of HK $66 and reiterated its investment rating of "buy". Goldman Sachs said that it has a positive view on Anta because Anta and Filo brands are expected to serve as cash cows to provide stable sales growth and advantageous profits for the group's expansion, and Anta is expected to strengthen the market potential of mainland skiing and outdoor products by expanding Descente, which owns 60% of the equity, and Amer sports, which is newly acquired.
Goldman Sachs also said that the mainland government has formulated investment policies to support infrastructure to encourage participation in skiing activities, with special attention to the 2022 Beijing Winter Olympic Games. Goldman Sachs believes that considering the price point of Anta brand, that is, to improve the affordability of Hong Kong consumers, the company can seek global expansion opportunities through its penetration in ASEAN.
Netizens commented that "falling is buying opportunity"
For this short, many investors are 'calm', believing that Anta sports, which has been short for many times, actually proves the future value of the company. The market once regarded Anta and Li Ning as two domestic sports brands to consume white horse stocks, and believed that Anta had a growth potential of nine times in eight years.
Some netizens said that Anta's double-click of "performance + valuation" in recent years has supported the sharp rise of share price. At the same time, the company has done well in diversified integration. The performance of high-end line business such as Philharmonic is better than market expectations, and the increase of net profit will also accelerate. In conclusion, the key to maintaining Anta's high profit margin lies in the sales mode of zero inventory and the pull of Filo brand. Its market management experience is worth learning from the industry.
Another netizen said that investors are not too worried about the short report of muddy water. Overseas short selling institutions mainly serve the operation of hedge funds. Listed companies can deny the false accusations. " As a shareholder, if a promising stock falls, it is a good opportunity to buy '&# 8203;&# 8203;&# 8203;&# 8203;&# 8203;&# 8203;&# 8203;