Anta Sports, Li Ning Set To Gain

SPONSORS of next year's Beijing Olympics like Volkswagen, Johnson & Johnson and Adidas have shelled out big bucks to tap China's booming consumer market. But some nimble Chinese companies without the heft of the multinational giants are poised to ride the Olympic boom, too.

Sportswear firms Anta Sports Products and Li Ning, both listed in Hong Kong, are spending their relatively limited marketing dollars creatively to build their brands and share some Olympic glitter, analysts say.

'Unlike previous Games, official sponsors may not even be the biggest winners in Beijing, despite the millions of dollars they are spending,' writes William Liu, head of China research at CLSA Asia-Pacific Markets in a recent research report.

Anta, China's fourth-largest sportswear brand by volume, is a David to Adidas's Goliath. Founded 13 years ago, Fujian-based Anta can't match the superstar endorsement deals of Adidas, whose Reebok brand is paying basketball's Yao Ming an estimated $7 million to $10 million a year.

But in recent years, Anta has become the main sponsor for activities such as the Chinese Basketball Association, the China Volleyball League and China's table-tennis league. In particular, the company is trying to promote its image in basketball shoes, which generally have among the highest profit margins in sports shoes.

There are many links between Anta and the Houston Rockets. The company has signed three of Mr. Yao's teammates -- Luis Scola, Steve Francis and Bonzi Wells -- piggybacking off the huge fan base the star and his team have in China. The Rockets own 1.8% of Anta, which began trading publicly in July. The Chinese company has said it will sponsor a training camp at which China's national players can train with the Rockets.

Also, the company last year began sponsoring 'Anta Sports Personality,' a program on national broadcaster China Central Television. It features rising Chinese stars.

Sports marketers and analysts say Anta's moves raise its profile among young consumers in China's second- and third-tier cities. With Nike, Adidas and Li Ning vying for a more affluent market, Anta can dominate this sector, the analysts say.

'It's a smart strategy to focus on the midtier mass markets, given the huge consumer demand,' says Jennifer So, an analyst in Hong Kong for brokerage CIMB-GK. This month, she upgraded the stock to 'outperform' from 'neutral' and raised her 12-month target price to HK$10.50 (US$1.35) from HK$8.80. That followed Anta's November announcement that January-September unit sales totalled 19.8 million pieces, topping Ms. So's forecast of 17.8 million units for the full year.

In its initial public offering, Anta priced its shares at HK$5.28. On July 10, the first day of trading, they closed 42% higher. They gained 13 Hong Kong cents yesterday to close at HK$9.97.

Xiaopo Wei, an analyst at CLSA, warns that Anta could face near-term margin pressures following the rollout of directly managed flagship stores in several cities. Analysts believe that Li Ning, Anta's more-established rival, loses money on its direct retail divisions. Mr. Wei says Anta likely will as well in the first few years, although the strategy will also help build its brand.

Anta isn't spending enough on marketing -- it allots only 12% of revenue, compared with 17% at Li Ning, Mr. Wei writes in research report. Still, he says Anta's valuation is attractive, given his expectation that earnings per share, in Hong Kong dollars, will grow an annual average of 52% for the next two years. He rates the stock a buy with a target of HK$10.70.

Li Ning -- named after its founder, who won three gold medals at the 1984 Los Angeles Olympics -- is also using creative marketing techniques. In the 1990s it had its pick of endorsements from the top Chinese athletes, until the country opened up more to foreign competition.

At one time, Li Ning was in the running to be official sportswear sponsor for the 2008 Games. But it couldn't match the deep pockets of Adidas, which people familiar with the matter say paid US$80 million to US$100 million to sponsor the Beijing Games.

Unlike Anta, which is focusing more on the domestic market, Li Ning has been trying to raise its profile abroad, reaching deals with Shaquille O'Neal and Spain's national basketball team.

The company has sought to sponsor popular-yet-niche Olympic teams. It failed in an attempt to sponsor the Iraqi soccer team, which is expected to do well in the Games and garner public sympathy given the country's instability. Li Ning was eventually outbid by LG Electronics of South Korea.

On the same tack, Li Ning in September signed up to sponsor Sudan's national track-and-field team. Sudan also has political turmoil and athletic stars, such as female sprinter Nawal El Jack, a bronze medalist in the 400-meter event at the 2006 World Junior Championships.

The move has risks: Some activist groups protesting the humanitarian disaster in Darfur are pushing for a boycott of Sudan officials at the 2008 Games. But Li Ning's chief operating officer, Guo Jianxin, said he didn't think the brand would be damaged by associations with Sudanese athletes.

Li Ning in November announced it would pay HK$321 million (US$41 million) to buy 58% of Shanghai Double Happiness Co., a leading maker of ping-pong tables and equipment and a sponsor of the Olympics. Given ping pong's popularity in China, analysts think the acquisition will strengthen Li Ning.

After the deal's announcement, Merrill Lynch analyst Denise Chai raised her target price for Li Ning stock by 25% to HK$32. Yesterday, the shares fell HK$1 to HK$26.30 -- more than double their level at the end of last year.

Li Ning still has US$76 million in net cash after the Double Happiness deal, and could make further acquisitions, according to CLSA's Mr. Wei. He has a 12-month target price of HK$29.51.

大众汽车(Volkswagen AG)、强生公司(Johnson & Johnson)和阿迪达斯(Adidas)等北京奥运会赞助商纷纷斥巨资拓展中国蓬勃发展的消费者市场。不过一些不及这些跨国公司财大气粗但却灵活敏捷的中国公司也在积极挖掘奥运商机。

分析人士表示，同在香港上市的安踏体育用品有限公司(Anta Sports Products Ltd.)和李宁有限公司(Li Ning Co. Ltd.)这两家运动服装生产商也借奥运会的东风，创造性地利用其相对有限的营销资金，以打造自己的品牌。

里昂证券亚太区市场(CLSA Asia-Pacific Markets)中国研究部主管刘炜(William Liu)在最近的一份研究报告中写道，与以往奥运会不同的是，北京奥运会的官方赞助商可能不会成为最大的赢家，尽管它们为此花费了数百万美元。

中国销量第四大的运动服装品牌安踏是阿迪达斯的劲敌。阿迪达斯旗下的锐步(Reebok)品牌每年约支付篮球明星姚明700万到1,000万美元的代言费，总部位于福建省、仅有13年历史的安踏在这方面无法与之相比。

但最近几年安踏已成为中国篮球协会、中国排球协会和中国乒乓球协会等举办的体育赛事的主要赞助商。尤其值得一提的是，安踏目前正在尝试提升其在篮球运动鞋领域的形象。篮球运动鞋通常是利润率最高的运动鞋产品之一。

安踏还与休斯顿火箭队建立了密切联系。该公司已签下路易斯•斯科拉(Luis Scola)、史蒂夫•弗朗西斯(Steve Francis)和邦奇•威尔斯(Bonzi Wells)这三位姚明的队友为其代言，以吸引姚明和火箭队在中国的庞大粉丝群。安踏于7月份公开上市，火箭队持有该公司1.8%的股份。安踏已表示将赞助一个训练营，使中国国家队的队员能够与火箭队一起进行训练。

除此之外，安踏去年还开始赞助“安踏CCTV体坛风云人物”。这是一档在中央电视台播出的节目，参与者为中国体坛的后起之秀。

体育营销人士和分析人士表示，安踏的营销策略提升了其在中国二、三线城市年轻消费者中的形象。当耐克公司(Nike Inc.)、阿迪达斯和李宁在更高端市场上争得不可开交之际，安踏能在这个领域占据主导地位。

经纪公司联昌国际(CIMB-GK)驻香港分析师Jennifer So说，将重点放在二、三线城市的大众市场是明智之举，因为这个市场上的消费者需求很大。本月她将安踏股票评级从“中性”上调至“强于大盘”，并将该股12个月的目标价格从8.80港元上调至10.50港元（合1.35美元）。在此之前，安踏曾在11月份宣布今年前9个月的销量达到1,980万件，高于Jennifer So对该公司全年销量1,780万件的预测。

安踏的首次公开募股价格为5.28港元。在7月10日首个交易日中，该股收盘上涨了42%。周二该股收于9.97港元，上涨0.13港元。

里昂证券分析师魏晓坡警告说，随着安踏在多个城市中开设了直营旗舰店，公司近期可能会面临利润压力。分析人士相信安踏的竞争对手、历史更久的李宁在直营零售业务方面出现了亏损。魏晓坡表示，尽管这种直营零售战略将有助于安踏品牌的建立，但在最初几年中很可能也会处于亏损状态。

魏晓坡在一份研究报告中指出，安踏在市场营销上支出不足，仅占收入的12%，而相比之下李宁将收入的17%用于营销。但他表示，尽管如此安踏的估值仍极具吸引力。他预计在未来两年中，安踏以港元计价的股票每股收益平均每年将增长52%。他将该股评级为“买进”，将目标价格定为10.70港元。

李宁有限公司的创始人李宁曾在1984年洛杉矶奥运会上获得三枚金牌。该公司也在采用创新性的营销策略。20世纪90年代，该公司曾挑选中国的顶尖运动员为其代言，直到中国对外国品牌越来越开放。

李宁一度曾想竞争2008年北京奥运会的官方运动服装赞助商，但却不敌资金雄厚的阿迪达斯。据知情人士透露，阿迪达斯花了8,000万美元到1亿美元来赞助北京奥运会。

与更专注于中国国内市场的安踏不同，李宁一直在努力提升在国外的形象，曾签下沙奎•奥尼尔(Shaquille O'Neal)和西班牙国家篮球队为其代言。

李宁还争取赞助那些受欢迎但较小的奥运会体育队。该公司曾尝试赞助伊拉克足球队，但是没有成功。预计伊拉克足球队在北京奥运会上将会有出色表现，而且因为目前伊拉克局势动荡，公众对其充满同情。但最终韩国的LG电子(LG Electronics Co.)击败李宁成为其赞助商。

出于同样的战略考量，李宁在9月份与苏丹国家田径队签约成为其赞助商。苏丹目前也是政局动荡，并且也拥有诸如女子短跑运动员娜瓦尔•埃尔•杰克(Nawal El Jack)这样的体育明星。她曾在2006年世界青年田径锦标赛上获得女子400米铜牌。

这样的赞助之举也有风险：一些维权组织抗议苏丹达尔富尔地区的人道危机，并正在力促2008年奥运会上抵制苏丹政府官员。但李宁的首席营运长郭建新表示他认为李宁品牌不会因与苏丹运动员的关系而受损。

11月份李宁宣布将斥资3.21亿港元（合4,100万美元）收购上海红双喜冠都体育用品有限公司(Shanghai Double Happiness Co.) 58%的股份。红双喜主要生产乒乓球桌和相关体育用品，同时也是奥运会赞助商。由于乒乓球运动在中国广泛流行，分析人士认为此次收购将增强李宁的实力。

在李宁宣布了此项收购交易之后，美林公司(Merrill Lynch & Co.)分析师Denise Chai将李宁股票的目标价格上调25%，至32港元。周二该股下跌1港元，至26.30港元。该股目前价格较去年年底上涨了一倍多。

里昂证券的魏晓坡表示，即使是在收购了红双喜之后，李宁手中仍有7,600万美元的净现金，还可以再进行收购。他将李宁股票12个月的目标价格定为29.51港元。

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