HONG KONG (Nikkei Markets) -- Hong Kong-listed Anta Sports Products on Friday denied allegations by short-seller Blue Orca Capital and unveiled a share subscription, helping its stock recover most of the previous day's losses.
Anta shares slid 5.5% to HK$46.95 on Thursday after Soren Aandahl of Texas-based Blue Orca, who was speaking in Hong Kong, questioned some of the company's metrics, including its store productivity, and said the stock was overvalued.
According to slides seen by an attendee at the event, who declined to be identified, Blue Orca valued Anta Sports' shares at HK$32.93, a 34% discount to their closing price on Wednesday.
Anta said it considers the "speculations" to be "inaccurate and misleading," adding that it "vigorously denies the speculations." The company said it is not aware of any other information that should be disclosed to "avoid a false market in the company's securities" and added that it reserves its right to take legal action against Blue Orca.
The stock was up 2.5% at HK$48.15 as of 3:30 p.m. The benchmark Hang Seng Index was down 0.8%.
Daiwa Capital Markets said Blue Orca's point that the productivity of the Fila China stores was unusually high when compared to Fila Korea and Fila Taiwan was not an apples-to-apples comparison.
"This thesis is similar to that of GMT Research's short-sell report on Anta in June 2018, comparing Fila China's sales growth with Fila Korea's royalty income, which was subsequently debunked by Anta's management as inaccurate and misleading due to the misinterpretation of the JV's economic structure," Adrian Chan, an analyst at Daiwa, wrote in a note.
Anta shares fell nearly 9% on June 14 after short-seller GMT Research issued a report questioning its financial performance.
In a separate statement on Friday, Anta said Anamered Investments, owned by Dennis Wilson, the founder of Lululemon Athletica, had agreed to subscribe to 15.8 million shares of Anta at HK$49.11 ($6.26) each. Anamered is a substantial shareholder of Mascot JVCo, a unit of Anta.
The placement is "not necessarily a counter move against the short-seller report," said Linus Yip, chief strategist at First Shanghai Securities. "But ... as a vote of confidence, a cash injection is more powerful than speech."
- Amy Lam