Core Viewpoint - The cancellation of the health run project in the Shanghai Marathon has sparked significant reactions among running enthusiasts, highlighting the event's unique status and the challenges of managing a large number of participants [2][5][11]. Group 1: Shanghai Marathon's Special Status - The Shanghai Marathon, established for 28 years, is a prestigious event with a "pilgrimage" status among runners, akin to the lottery system for housing in Shanghai [5]. - This year, the total number of applicants for the full marathon and health run reached 356,589, with a full marathon acceptance rate of only 7.2% and a health run acceptance rate of 38.3% [7]. Group 2: Decision to Cancel Health Run - The decision to cancel the health run is seen as a "subtraction" aimed at enhancing the professional and international reputation of the marathon, as health runs accounted for 40% of the total 38,000 slots [11]. - The cancellation also includes the controversial charity run, which was perceived as a "money-grabbing" opportunity, conflicting with the spirit of professional competition [11]. Group 3: Shift Towards Professionalization - The decision reflects a shift towards professionalization and elitism in top-tier events, encouraging community and park runs to take on the role of promoting public fitness [13]. - The trend of professionalization in events parallels the evolution of running gear, with runners now seeking specialized equipment tailored to different running scenarios [13][17]. Group 4: Evolution of Running Gear - The running shoe market has seen a shift towards specialized footwear, with carbon plate shoes becoming standard for competitive runners, and various designs catering to different terrains and needs [17][21]. - The importance of selecting appropriate running shoes is emphasized, as improper footwear can lead to injuries, highlighting the need for shoes that provide cushioning, support, stability, and grip [19][21]. Group 5: Growth of Trail Running - Trail running has gained popularity, with numerous events taking place across the country, and a significant portion of participants aged between 22 and 55 [29][31]. - The choice of appropriate trail shoes is crucial for safety and performance, with specific designs catering to various terrains and conditions [35]. Group 6: Rise of Hiking Shoes - Hiking shoes have become a new choice for urban commuting, reflecting a shift in workplace attire towards comfort and practicality [41]. - The functionality of hiking shoes, including waterproof materials and slip-resistant soles, meets the demands of urban commuters while blending outdoor practicality with urban fashion [47]. Group 7: Market Trends and Consumer Behavior - The market for specialized footwear is expanding, with both international and domestic brands innovating to meet diverse consumer needs [52][56]. - The evolving consumer mindset reflects a deeper connection to lifestyle choices, where footwear represents not just functionality but also identity and lifestyle expression [61][63].

Investment Rating - The investment rating for the company is "Buy" and is maintained [5]. Core Views - The company is experiencing increased short-term operational pressure, with a decline in average transaction value across all channels in Q3 2025. However, the e-commerce channel has shown growth [3][7]. - The company is expected to face significant pressure on revenue and gross margin levels, with a need to balance expenses and growth to meet annual targets. The introduction of new products and marketing efforts are aimed at revitalizing brand momentum [7]. Summary by Sections Company Overview - The current stock price is HKD 17.10 as of November 7, 2025 [5]. Operational Performance - In Q3 2025, the overall transaction value declined, with a notable drop in both direct and wholesale channels, while the e-commerce channel saw an increase [3][7]. - Monthly retail performance continues to be under pressure across all product categories [7]. Inventory and Discounts - Inventory levels are expected to rise due to preemptive stocking for events like Double Eleven, but the inventory-to-sales ratio remains manageable. Discounting is anticipated to deepen, particularly in Q4 [7]. Financial Projections - The company is projected to achieve net profits of 2.589 billion, 2.773 billion, and 2.993 billion for the years 2025, 2026, and 2027 respectively, reflecting a year-on-year change of -14%, +7%, and +8% [9]. - The price-to-earnings ratio is expected to be 15.55, 14.52, and 13.45 for the years 2025, 2026, and 2027 respectively [9].

Core Viewpoint - Li Ning has launched the "Polar Space Capsule" pop-up space in Beijing, showcasing a blend of winter sports elements and aerospace technology aesthetics, emphasizing its innovative "Aerospace Dynamic Thermal Technology Platform" [1][7]. Group 1: Event Overview - The pop-up space is open from November 7 to November 9, featuring immersive experiences centered around warmth [1]. - Three main technology experience areas are set up, focusing on "thermal insulation" as the core theme [3]. Group 2: Technology and Product Features - The "Aerospace Dynamic Thermal Technology Platform" includes three core functions: moisture permeability, thermal insulation, and protection [7]. - Consumers can experience the technology through interactive devices, showcasing the thermal capabilities of Olympic award-winning outfits [3][8]. Group 3: Consumer Engagement - Attendees can try on new cotton and down products and experience the dynamic thermal technology in a specially designed cold experience chamber [3][8]. - The event includes interactive activities like a curling challenge, allowing participants to win limited edition gifts [3]. Group 4: Strategic Partnerships - Li Ning has established a partnership with an aerospace technology innovation application platform to create the "Aerospace Technology Innovation Application Laboratory" [7]. - This collaboration aims to extend research outcomes from competitive sports to everyday life, enhancing the brand's technological capabilities and cultural confidence [7].

Core Insights - The 15th National Games, co-hosted by Guangdong, Hong Kong, and Macau, gained significant attention during the opening ceremony, particularly with the unique "water stage" concept and the torch relay featuring athletes on water [1][10] - Anta emerged as a key player, providing waterproof socks for the torchbearers and being the official sports equipment partner for the event, with a high visibility rate during the opening ceremony [3][5] - The competition among sports brands was evident, with Li Ning and other brands like Karmay and 361° also gaining visibility through various representative teams [4][5] Brand Participation - Anta had 14 representative teams wearing its brand during the opening ceremony, maintaining the highest participation rate compared to other brands [3] - Li Ning's presence increased, with 8 representative teams wearing its apparel, up from 5 in the previous games [4] - Karmay continued to lead with 5 teams, while other brands from the Jinjiang region also participated, showcasing a diverse representation [4] Sponsorship and Marketing Trends - Some teams procured their outfits through a bidding process rather than sponsorship, indicating a mix of funding sources for team apparel [5] - The marketing strategy has shifted from traditional media to social platforms like Douyin and Xiaohongshu, where athletes showcase their gear through unboxing videos, enhancing brand engagement [5][7] - The trend of athletes acting as "trendsetters" on social media has led to increased visibility and engagement for brands, moving away from conventional advertising methods [7][10] Social Media Impact - Unboxing videos by athletes have gained significant traction, with examples showing thousands of likes and shares, indicating a new form of brand promotion [7] - The rise of these videos reflects a deeper integration of digital life and athlete identity, creating a more personal connection with audiences [7][10] - The shift towards athlete-driven content creation represents a new competitive landscape for brands, focusing on emotional connections and real interactions with consumers [10]

Investment Rating - The report maintains a recommendation for the industry, indicating a stable outlook for textile manufacturing and a positive trend for gold and jewelry sectors [3]. Core Insights - Textile manufacturing is expected to gradually improve due to stable overseas demand and low inventory levels, despite short-term production efficiency issues and order delays from existing clients [7][11]. - Brand apparel is facing pressure due to weak domestic consumption, with only a few companies showing positive performance through strong product and channel strategies [7][38]. - The gold and jewelry sector is experiencing high growth driven by low base effects, rising gold prices, and product structure upgrades, with leading brands showing significant revenue growth [7][49]. Summary by Sections Textile Manufacturing - Overseas demand remains stable, with low inventory levels in the U.S. indicating a healthy supply chain [12]. - Major global brands like NIKE are seeing recovery after two years of channel optimization, with orders expected to improve as major sporting events approach in 2026 [11][18]. - Key companies to watch include Shenzhou International, Yuyuan Group, and others with Southeast Asian production capabilities [34]. Brand Apparel - The performance of brand apparel companies is generally under pressure, with most reporting low single-digit revenue growth and declining profits [38]. - Notable exceptions include Mercury Home Textiles and Luolai, which reported significant revenue and profit increases due to product expansion and multi-channel strategies [38]. - Companies like Mercury Home Textiles and Li Ning are recommended for their positive brand momentum and strategic changes [48]. Gold and Jewelry - The gold and jewelry sector saw a 11.5% increase in retail sales in the first three quarters of 2025, driven by rising gold prices and product upgrades [49]. - Leading brands such as Chao Hong Ji and Man Ka Long reported substantial revenue growth, with Chao Hong Ji's revenue increasing by nearly 50% in Q3 2025 [54]. - Investment recommendations focus on brands with strong market positioning and ongoing product and channel upgrades, such as Chow Tai Fook and Chao Hong Ji [67].

Summary of Li Ning Company Conference Call Industry and Company Overview - The conference call discusses the performance and strategies of Li Ning Company, a prominent player in the sportswear industry in China, particularly focusing on its sales performance and market strategies for the latter part of 2025 and into 2026 [2][3][4]. Key Points and Arguments Sales Performance - October 2025 sales performance did not meet expectations, with offline sales experiencing negative growth, which offset the growth from e-commerce during the Double Eleven pre-sale [2][3]. - Overall, the company faced continuous negative growth across all channels in early November, indicating persistent pressure on terminal sales [2][3]. - Discounts have deepened both online and offline, with direct store discounts being particularly significant [2][3]. E-commerce Strategy - Li Ning's Double Eleven strategy for 2025 remains largely unchanged from 2024, focusing on traditional platforms like Tmall and JD.com, while experiencing volatility in live-streaming platform sales [2][6]. - The company aims to ensure Gross Merchandise Volume (GMV) while controlling discounts to avoid excessive markdowns in a weak demand environment [6]. Product Performance and Future Plans - In Q3 2025, various product categories showed a decline in sales, with basketball and sports lifestyle categories experiencing significant drops of approximately 20% and 12%, respectively [7]. - The company plans to leverage technology and new running shoe iterations to prepare for the upcoming marathon season in Q1 2026, alongside launching a new winter clothing line featuring "Aerospace Dynamic Warmth Technology" [7][8]. - The badminton category, although small, showed impressive growth, with a slowdown from nearly 40% in H1 to over 30% in Q3 [8]. Market Demand and Competitive Landscape - The basketball market is currently weak, attributed to reduced interest and star player influence; however, the company sees potential in youth engagement through sponsorships [9]. - The sports lifestyle segment faces intense competition and homogenization, prompting organizational adjustments and the introduction of new design elements [9]. Dividend Policy and Inventory Management - Li Ning maintains a 50% interim dividend payout ratio, with potential for future optimization pending board approval [10]. - Dealers express cautious optimism about new products, with inventory levels being managed to maintain a healthy stock-to-sales ratio of 5-6 months, aiming to reduce it to 4-5 months by year-end [11]. Organizational Changes and Brand Strategy - The company has implemented a category management system to enhance operational efficiency, with new leadership in the China Li Ning and 1990 brands [13][14]. - Despite facing short-term challenges, the company aims to strengthen brand positioning and improve market performance through strategic marketing and product optimization [14]. Financial Outlook and Challenges - Profit margins are expected to face pressure in 2026 due to increased Olympic-related expenses and resource allocation for upcoming events [17]. - The company anticipates a stable markup rate despite challenges in maintaining average pricing due to material cost fluctuations [18]. Outdoor Product Development - Outdoor products currently account for a low single-digit percentage of total revenue, with expectations for gradual growth as the company increases its presence in this segment [19]. Shareholder Confidence - The major shareholder, Feifan, continues to increase its stake in Li Ning, signaling confidence in the company's strategy and market outlook [20]. This summary encapsulates the critical insights from the conference call, highlighting the challenges and strategic directions of Li Ning Company in the competitive sportswear market.

Core Viewpoint - In Q3 2025, the overall sales volume of Li Ning brand (excluding Li Ning YOUNG) experienced a decline in unit numbers, with offline sales significantly impacted by foot traffic and consumer spending, while e-commerce showed a high single-digit growth year-on-year [1][2][3] Sales Performance - Q3 2025 saw a high single-digit decline in offline sales, primarily due to reduced foot traffic and consumer spending, with direct retail channels performing better than wholesale channels, benefiting from strong performance in outlet channels [1][2] - E-commerce business recorded a high single-digit growth year-on-year, with an increase in growth rate compared to Q2 [2][3] - The children's clothing segment continued to outperform adult clothing, with expectations of double-digit growth in children's apparel [2] Inventory and Discounts - The company increased its inventory turnover ratio at the end of Q3 2025, with a ratio corresponding to 5-6, as preparations were made for upcoming holidays and promotional events [1][2] - Both online and offline discount rates deepened in low single digits during Q3 2025, as the company intensified promotional efforts [2][3] Channel Expansion and Marketing Strategy - As of Q3 2025, the total number of Li Ning's sales points reached 6,132, with a net increase of 15 points since the beginning of the year, while children's clothing sales points totaled 1,480, with a net increase of 12 points [3] - The company plans to enhance marketing investments focusing on the "Olympics + Technology" theme in Q4 2025, aiming to improve product development and brand influence [3] - New product launches are expected in Q4, including technologically advanced products and collaborations, which are anticipated to drive sales improvement [3] Financial Forecast - The projected revenue for the company from 2025 to 2027 is estimated at 28.93 billion, 30.51 billion, and 32.08 billion yuan, with year-on-year growth rates of +0.9%, +5.4%, and +5.2% respectively [4] - The expected net profit attributable to shareholders for the same period is forecasted at 2.43 billion, 2.62 billion, and 2.78 billion yuan, with year-on-year changes of -19.5%, +7.8%, and +6.2% respectively [4]

Group 1 - The China Pickleball Tour Finals (CPC-2000) and the China Pickleball City Challenge Finals (CPC-T2000) are the highest-level pickleball events in China, marking the conclusion of the most extensive series of pickleball competitions this year [1][4] - The event is hosted in Guilin, a city known for its stunning natural scenery and cultural heritage, emphasizing the integration of sports with tourism [3][5] - The event aims to promote pickleball as a new choice for public fitness and a new engine for urban development, highlighting the positive impact of sports and cultural tourism activities [4][7] Group 2 - The event has attracted significant attention, with over 1,000 participants expected, showcasing the growing popularity of pickleball and its alignment with the demand for diverse and high-quality sports activities [7][8] - The design of the medals incorporates local cultural elements, symbolizing honor and the spirit of athletes, which adds to the event's cultural significance [7] - The partnership with Bank of Communications as the chief partner for the event represents a new model of "Finance + Events + Cultural Tourism," supporting the promotion of pickleball and the successful hosting of the event [8]

Group 1 - The 2025 "Li Ning Cup" China Pickleball Tour Finals and the China Pickleball City Challenge Finals will be held from November 27 to November 30 in Guilin, marking the conclusion of this year's pickleball series events [2] - The event is co-hosted by multiple organizations, indicating its high status and broad participation within the national pickleball scene [2] - The event is expected to attract over 1,000 participants from both domestic and international backgrounds, highlighting its significance in promoting competitive exchange and sustainable development of the sport [3] Group 2 - The event's location in Guilin is seen as a recognition and promotion of the rapid development of pickleball in Guangxi, aligning with the region's goals of integrating sports and tourism [3] - The design of the medals incorporates local cultural elements, showcasing Guilin's heritage and uniqueness, including the first-ever桂花香味龙符奖牌 [3] - The partnership with the Bank of Communications Guangxi Branch aims to explore a "finance + events + tourism" integration model, supporting the broader goals of national sports development and public health initiatives [3]

Investment Rating - The report maintains an "Accumulate" rating for the textile and apparel industry [6] Core Insights - The textile and apparel industry is experiencing a weak recovery, with the jewelry sector showing better growth compared to clothing [14] - The domestic sportswear market is expected to maintain long-term growth resilience despite short-term fluctuations in offline sales [1] - The report highlights the importance of inventory management and the impact of promotional events on sales performance [1][2][26] Summary by Sections 1. Sports Footwear and Apparel - The sports footwear and apparel sector showed weaker performance in Q3 2025 compared to Q2 but still outperformed the overall apparel market [1] - Offline sales for domestic sports brands remain weak, while e-commerce channels are performing better [1] - Inventory levels for domestic sports brands increased in Q3 due to preparations for the National Day holiday and Double Eleven sales [1] - Adidas reported a 6% year-on-year revenue growth in Greater China for Q3 2025, while Nike's sales in the region declined [1][18] 2. Brand Apparel - The brand apparel sector showed improvement in Q3 2025, with revenue and net profit growth of 3.1% and 23.2% respectively, driven by a low base effect [2] - The home textile segment benefited from product updates, while the fashion apparel category faced weak demand due to low consumer confidence [2] - The report anticipates continued reasonable expense management and stable profit growth for some companies in Q4 2025 [2] 3. Textile Manufacturing - Revenue for key textile manufacturing companies remained relatively stable, with a slight decline in net profit [3] - Companies with different customer structures showed varied performance, with some like Huayi Group achieving a 7% revenue growth by expanding their client base [3] - The report suggests that as inventory levels normalize, there may be a recovery in orders from upstream manufacturing companies [3] 4. Gold and Jewelry - The gold and jewelry sector experienced performance differentiation, with retail sales of gold and silver jewelry increasing by 11.5% year-on-year in the first nine months of 2025 [4] - Companies with fewer stores or a direct sales model reported excellent revenue growth, with some like Chao Hong Ji and Man Ka Long achieving revenue increases of 28.3% and 29.3% respectively [4] - The report recommends focusing on companies with strong product and channel capabilities in the jewelry sector [4] 5. Investment Recommendations - The report recommends several companies based on their performance and market positioning, including Shenzhou International, Anta Sports, Li Ning, and Chow Tai Fook, highlighting their respective PE ratios for 2025 [4][9]