Anta Remains on Track To Bounce Back From Coronavirus Rout; FVE Maintained at HKD 141

Anta Group reported weak fourth-quarter retail sales, but the lackluster performance was caused by China's zero-COVID-19 policy, which is no longer in effect. With some of the largest cities already past the peak of infection, we expect Anta's sales to gradually start rebounding in the first quarter of 2023. We cut our forecast for fourth-quarter 2022 earnings to account for more severe short-term margin pressure caused by the COVID-19-related store closures. Given we're only making an earnings adjustment to last year's numbers, we maintain our fair value estimate of HKD 141. We view Anta shares as undervalued, trading at a 25% discount to our fair value estimate.