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<Research>G Sachs: ANTA SPORTS (02020.HK)'s CB Issue Implies Upside to NII
Recommend 4 Positive 11 Negative 5 |
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ANTA SPORTS (02020.HK) announced on Tuesday (26th) that it proposed to buy back its EUR1 billion convertible bonds (CBs) due 2025 and to issue new CBs with a size of EUR1.5 billion. Goldman Sachs' report said that the issuance of new CBs by Anta reflects the upside potential of the company's NII. The broker said investors may question about the company's capital allocation strategy, with the company's cash flow hitting RMB22 billion by the end of 2023. Based on the broker's projection, full conversion of the CBs will add 118 million shares to the current share capital, with a dilution impact of 4.2%. According to the broker, the issuance of new CBs implies the company can still refinance at low cost and maintain cash levels without diluting shareholders' returns at this stage. The broker maintained a Buy rating on the company and a target price of $111. AAStocks Financial News |
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