High dividend payout sparks rally in Anta Sports Products shares
Stock rises as much as 4.7 per cent after the mainland sportswear retailer announces special payment despite sharp fall in profit
Shares of Anta Sports Products rose as much as 4.7 per cent yesterday, driven by the mainland sportswear retailer's plan to pay high dividends despite a sharp fall in profit.
Some analysts said the sportswear industry on the mainland had not bottomed out yet and this year would be even tougher for major players such as Anta.
Anta rose to HK$7.82 from HK$7.47 after the board recommended a final dividend of 17 HK cents plus a special payout of eight HK cents per share for last year. The stock closed at HK$7.56, up 1.2 per cent.
The proposed dividends, along with that for the interim period, would represent a distribution of 72 per cent of Anta's annual net profit, against 61 per cent in 2011.
"Anta's business performance is lower than market expectation, but it's apparent that the company is intending to boost its share price with a high-level dividend policy," said Felix Kwok, an analyst at Core Pacific-Yamaichi Securities.
Turnover fell 14.4 per cent to 7.62 billion yuan (HK$9.48 billion) due to sluggish consumption demand, a high inventory level and increasing discounting pressure.
Net profit dropped 21.5 per cent to 1.36 billion yuan, while gross profit margin shrank by 4.3 percentage points to 38 per cent.
