Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the **China Consumer sector**, with insights gathered from approximately 70 institutional investors in **Hong Kong** and **Singapore** during late January and early February 2026. Investors are currently underweight in this sector and are more interested in discussing the outlook for 2026 rather than past earnings or government policies [1][1]. Company-Specific Insights Laopu - Investor sentiment towards **Laopu** has improved due to strong year-to-date sales, alleviating previous concerns about growth sustainability. Key discussions include: - Sales and margin dynamics affected by rising gold prices, which lower earnings visibility. - Promotion-driven sales impacting profitability and brand perception. - High gold prices potentially eroding consumer purchasing power. - Laopu is viewed as a beneficiary of rising gold prices, with sales increases offsetting temporary gross profit margin pressure [2][2]. Pop Mart - Investor debates regarding **Pop Mart** focus on its growth sustainability, particularly in the US market. Positive sentiment in China is noted due to successful new releases and decent store traffic, despite ongoing concerns about the US market. Key points include: - Uncertain US demand may lead to margin pressure through operating deleverage. - Success in China may not be replicable in overseas markets. - There is a decrease in investor concern regarding secondary price declines, which may not fully reflect consumer demand [3][3]. Anta vs. Li Ning - **Anta**'s sentiment shifted positively following the announcement of its acquisition of **Puma**, which was smaller than expected. This change is attributed to: - A previously negative outlook from management that improved post-announcement. - A low probability of equity financing for Anta. - Anta's valuation discount of approximately 15% compared to **Li Ning** [3][3]. Haidilao - **Haidilao** has stabilized its table turnover since Q4 2025, with investors viewing **YUM China**'s recent results as a positive indicator for Haidilao's outlook for 2026. Despite unchanged guidance, investors are more inclined to view Haidilao as a proxy for the recovery of the restaurant industry in China. Expectations are high for the founder's return as CEO to revitalize growth through new business expansion and innovation [6][6]. Mengniu - Investors believe that **Mengniu**'s cyclical net profit recovery in 2026 will be more substantial than its peers. The market's low expectations mean that any positive news could lead to a significant re-rating of the stock. Investors appreciate Mengniu's conservative approach to operating expenses and non-cash impairment loss assessments for 2025 [7][7]. Additional Notable Mentions - The call highlighted several companies of interest, including **Mengniu**, **Haidilao**, **Anta**, **Li Ning**, **Pop Mart**, and **Laopu**, among others. Each company has unique challenges and opportunities that investors are closely monitoring [8][8]. Conclusion - The overall sentiment in the China consumer sector is cautiously optimistic, with investors looking for signs of growth and recovery in specific companies. The discussions reflect a shift in focus towards future potential rather than past performance, indicating a dynamic investment landscape in the region.

Flash | 26 Jan 2026 21:22:59 ET │ 11 pages Anta Sports Products (2020.HK) Our thoughts on Puma acquisition; All negatives likely priced in CITI'S TAKE This morning (Jan 27), Anta announced its acquisition of a 29% stake in Puma from the Pinault family's Artemis Holdings with a total consideration of EUR1.5bn, or EUR35/share (rep. ~0.7x 25E P/S, based on VA consensus). Post deal close, Anta will become the largest shareholder of Puma. Per mgt on the conf call, Anta has no plan of privatizing Puma at this sta ...

Investment Rating - The report assigns an "Outperform" rating to Amer Sports with a target price of $46, indicating a 22% upside potential. Anta Sports is rated "Market-Perform" with a target price of HKD 89, suggesting an 8% upside. Li Ning is rated "Underperform" with a target price of HKD 17, indicating a 16% downside potential [6][7]. Core Insights - China's sportswear market is transitioning from high-growth expansion to mature growth, with total market growth moderating to approximately 6% CAGR through 2030E. The outdoor segment is expected to maintain a structural outperformance at around 12% CAGR [1][10]. - The market is shifting from "land-grab" growth to share reallocation and premiumization, with success increasingly reliant on brand differentiation, technical innovation, and channel efficiency [1][19]. - Technical specialists are gaining market share within the outdoor category, with brands like Arc'teryx projected to increase their share from approximately 7% in 2019 to around 20% by 2025E [3][23]. Market Dynamics - The outdoor segment is now the largest category, with growth moderating to +12% YoY from a previous CAGR of 29% (2021–2025E). Apparel is leading category performance at +18% YoY, while sneakers grew +14% YoY [2][13]. - The sportswear market is expected to normalize to mid-single-digit growth through 2030E, structurally outperforming broader retail by approximately 2 percentage points annually [11][21]. - The exercising population in China is projected to reach 630 million by 2035E, supporting long-term structural demand for sportswear [11][37]. Competitive Landscape - Market share is fragmenting away from generalists toward specialized brands, with Anta maintaining approximately 21% share and Li Ning around 9% by 2030E. The "Others" category is expected to decline significantly [15][51]. - Premium brands are forecasted to hold a stable share of around 54% through 2030E, while mass brands will remain at approximately 46% [12][48]. - Brand performance is highly polarized, with technical specialists like Arc'teryx and Salomon capturing significant growth, while many established brands stagnate or decline [4][16]. Brand Performance - Top performers in 2025 include Arc'teryx (+167%), Salomon (+150%), and Descente (+84%), while established brands like Li Ning and Nike are underperforming with growth rates below the market average [4][17]. - The report highlights that premium positioning alone is insufficient for success; continuous innovation and strong local relevance are critical [18][30]. Outlook and Implications - The sector is expected to shift from category expansion to share reallocation, with winners being those who can defend premium positioning and expand into adjacent categories [19][25]. - The outdoor segment is projected to continue outpacing overall sportswear growth, with a forecasted CAGR of approximately 13% from 2025 to 2030E [22][26].

Summary of Key Points from the Conference Call Industry Overview - The report discusses the performance of the MXCN and CSI300 indices, which lost 1.6% and 0.3% respectively during the week. [1] - Economic data for November broadly missed expectations, particularly in retail sales, which grew by only 1.3% year-over-year. [1] - Fixed Asset Investment (FAI) showed a significant contraction of 10.7% year-over-year. [1] Core Insights and Arguments - President Xi emphasized the importance of expanding domestic demand as a strategic move for economic growth. [1] - The Hainan Free Trade Port has launched island-wide customs clearance operations, increasing the number of duty-free items to over 6000. [1] - The National Development and Reform Commission (NDRC) noted a slowing investment trend since 2025 and called for targeted measures to boost effective investment. [1] - The State Administration for Market Regulation (SAMR) highlighted the need for a unified national market to enhance fair competition and improve antitrust compliance among platform companies. [1] Economic Indicators - The report indicates a double-digit year-over-year contraction in FAI, which is concerning for future economic growth. [1] - Retail sales growth of 1.3% year-over-year is significantly below market expectations, indicating weak consumer demand. [1] Additional Important Information - The report mentions that the China Kickstart publication will resume in the new year, wishing readers a happy holiday season. [1] - The report also includes insights into the performance of various sectors, with materials and financials showing positive performance, while real estate and IT sectors lagged. [9] - The forward price-to-earnings ratios for MXCN and CSI300 are noted to be 12.5x and 14.1x respectively, with expected EPS growth of 4% and 13% for 2025 and 2026. [10] - The report suggests that widespread AI adoption could boost corporate earnings in China by 3% annually over the next decade. [20] Conclusion - The overall economic outlook appears cautious, with significant challenges in consumer spending and investment. The emphasis on domestic demand and regulatory improvements indicates a strategic pivot towards stabilizing and stimulating the economy.

Market Performance - Hong Kong stocks rose for a third consecutive day, with the Hang Seng Index closing at 25,690.53, up 0.8%, marking its longest winning streak in three weeks [1][2] - The Hang Seng Tech Index increased by 1.1%, while the CSI 300 Index on the mainland climbed 0.3% and the Shanghai Composite Index added 0.4% [2] Sector Performance - Chinese pharmaceutical firms showed strong gains, with Innovent Biologics rising 2.1% to HK$83.25 and Wuxi AppTec increasing by 1.5% to HK$103.80, driven by optimism about China's potential as a global hub for innovative drugs [3] - Chow Tai Fook Jewellery Group saw a 3.1% increase to HK$12.70 after raising prices on some products [3] - Major tech companies also experienced gains, with Alibaba Group Holding up 0.8% to HK$145.30 and Tencent Holdings adding 1.5% to HK$614 [3] Economic Context - Cooling US inflation is expected to alleviate concerns about a potential global bubble in artificial intelligence, which has been exacerbated by high valuations and significant investments in data centers [5][6] - Core US inflation was reported at 2.6% in November, the slowest pace since early 2021, with overall consumer prices rising 2.7% year on year, below the consensus estimate of 3.1% [6] Weekly Summary - Despite the recent gains, the Hang Seng Index finished the week down 1.1% due to significant losses in the first two trading days, primarily driven by concerns over the AI bubble [2][7] - Notable decliners for the week included Xiaomi, Baidu, and Alibaba Group Holding, each sliding more than 5%, while Li Ning and CSPC Pharmaceutical Group emerged as top performers with gains of about 7% [7]

Market Performance - Hong Kong stocks rebounded from a three-week low, with the Hang Seng Index rising 0.9% to 25,468.78, while the Hang Seng Tech Index gained 1% [1] - The CSI 300 Index on the mainland climbed 1.8%, and the Shanghai Composite Index added 1.2% [1] Company Movements - China Life Insurance increased by 4.3% to HK$28.56, and Li Ning also rose by 4.3% to HK$19.07 [3] - Pop Mart International Group saw a gain of 3.4% to HK$195.70 [3] - ENN Energy declined by 2.4% to HK$69.90, and Techtronic Industries retreated by 2% to HK$89.80 [3] Economic Indicators - The US added 64,000 jobs in November, improving from a loss of 105,000 jobs in the previous month, but the unemployment rate rose to 4.56% from 4.44% in September [5] - Analysts suggest that the US jobs market is cooling but on track for a soft landing, indicating limited urgency for the Federal Reserve to cut interest rates in January [5] - Investors are looking forward to the November US inflation data, with core consumer prices expected to rise by 2.9% year-on-year, down from a 3.02% increase in September [6]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Sportswear** industry, particularly the performance and outlook of major brands including **Nike**, **Anta**, **Topsports**, and **Li Ning** [1][2][3][4]. Core Insights and Arguments - **Nike's Market Position**: Nike retains its No.1 ranking in both "intent to purchase" and "most innovative brand" categories, despite a slight decline of 1 percentage point quarter-over-quarter (QoQ) [2][3]. - **Anta's Performance**: Anta's Net Promoter Score (NPS) increased by 11 points QoQ, moving from 10 to 4 in rankings, indicating a solid brand equity among Chinese consumers [3][10]. - **Topsports' Recovery**: Anticipated support from Nike, due to organizational changes, is expected to aid Topsports in recovering sales, which are heavily reliant on Nike products (50-60% of sales) [3][4]. - **Promotional Environment**: 65% of survey respondents noted an increase in promotional activity for sports footwear and clothing, up from 60% in September [19][20]. Financial Performance and Projections - **Anta's Sales Guidance**: Anta is expected to meet its full-year retail sales guidance, projecting low single-digit year-over-year growth for its business [3][4]. - **Topsports Valuation**: The target price for Topsports shares is set at HK$3.75, based on a 16x calendarized year 2025E P/E, reflecting a 45% discount to Nike's historical trading P/E [40][42]. - **Li Ning's Growth Outlook**: Despite anticipated weak growth in 2025, Li Ning is expected to resume earnings growth in 2026 due to enhanced brand equity and new product rollouts [35][36]. Additional Important Insights - **Consumer Sentiment**: The survey indicates a shift in consumer preferences, with Nike leading in "intent to purchase" at 21%, followed by Li Ning at 17% and Anta at 13% [12][14]. - **Discount Trends**: The percentage of consumers receiving discounts greater than 10% on recent purchases increased to 29% in November, indicating a competitive pricing environment [23][24]. - **Nike's Organizational Changes**: Nike's recent restructuring aims to enhance operational flexibility and brand support in China, which is expected to positively impact Topsports [3][26]. Conclusion - The China sportswear market is experiencing dynamic shifts, with Nike maintaining a strong position, while Anta and Li Ning show promising growth potential. The promotional landscape is becoming increasingly competitive, which may influence pricing strategies and consumer purchasing behavior in the near future.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Consumer Sector - **Event**: Citi's 2025 China Conference - **Participants**: 44 China consumer companies were hosted, leading to the identification of five investment themes in the consumer sector [1][9] Investment Themes 1. **Shift Towards Experience Consumption**: - Consumers are increasingly valuing emotional experiences over physical goods, seeking happiness and self-expression through services [2] - Companies like Pop Mart provide affordable entertainment options that resonate with young consumers [2] 2. **Focus on Well-being**: - Younger generations are prioritizing spending on wellness, including health, fitness, and mindfulness [3] - Growth opportunities are seen in sectors like sportswear (Anta), health supplements (H&H), and beauty care (Giant Bio) [3] 3. **Rising Silver Economy**: - The aging population is driving demand for leisure and cultural experiences, benefiting industries like tourism (H World, Atour) and health supplements [4] 4. **Emerging New Channels**: - New offline channels such as membership stores and snack specialty chains are gaining traction, helping to offset declines in traditional distribution [5] 5. **Multi-brand Strategy**: - Companies are expanding their brand portfolios to meet diverse consumer demands, with a focus on easing channel inventory pressure [6] Company-Specific Insights Pop Mart (9992.HK) - **Sustainability of IP Operation**: Pop Mart is seen as a growth play due to its strong IP incubation capabilities. Concerns about growth sustainability are being addressed through new product launches [10] - **LABUBU Durability**: The company plans to enhance its LABUBU IP with new products and has postponed the launch of LABUBU 4.0 to 2026 [11] - **Overseas Expansion**: Plans to operate over 60 stores in the US by the end of 2025, with expansions into Canada and Mexico [13] Laopu Gold (6181.HK) - **Sales Growth Expectations**: Management expects high revenue growth in 2H25E driven by price adjustments and new store sales [16] - **Price Adjustment Strategy**: A recent price increase of over 25% aims to maintain a gross profit margin (GPM) of at least 40% [17] - **Store Expansion Plans**: Focus on expanding floor areas in existing malls rather than entering new ones [22] Haidilao International Holding Ltd (6862.HK) - **Recovery in Table-Turn**: Management anticipates positive momentum in table-turn rates due to seasonal factors and a low comp base [30] - **Operational Improvements**: Plans to terminate loss-making pilot programs to save on operational expenses [32] China Resources Beer (0291.HK) - **Sales Performance**: The company reported low single-digit year-over-year sales growth, outperforming peers [34] - **Margin Outlook**: Expected GPM improvement in 2H25E, with a target dividend payout ratio increase to ~60% in 2025E [36] Midea Group (0300.HK) - **Sales Growth Target**: Management maintains a target of ~10% sales growth for 2025, with a focus on air-conditioning sales recovery [40] - **Overseas Business Expansion**: Plans to increase overseas production to ~30% and grow sales in developed markets through M&A [41] Li Ning (2331.HK) - **Sales Guidance**: Maintained guidance for 2025 with expectations of flat sales and high single-digit net profit margin growth [48] Nongfu Spring (9633.HK) - **Sales Guidance**: Management reiterated a mid-teen percentage growth target for 2025, with limited impact from price wars in the beverage sector [51] Cosmetics Sector - **Mixed Performance**: Domestic brands like Mao Geping and Chicmax showed strong growth, while others lagged behind [56] - **Growth Strategies**: Companies are focusing on online sales growth and improving operational efficiency to enhance margins [57][59] Additional Insights - **Consumer Trends**: There is a notable shift towards experiential consumption and wellness, indicating a changing landscape in consumer preferences [2][3] - **Operational Strategies**: Companies are adopting multi-brand strategies and optimizing supply chains to enhance profitability and meet diverse consumer demands [6][14] This summary encapsulates the key insights and trends discussed during the conference, highlighting the evolving dynamics within the China consumer sector and specific company strategies.

Investment Rating - The investment rating for Li Ning is "Buy" with a target price of HK$18.10, representing an expected share price return of 3.1% and an expected total return of 6.0% [3][5]. Core Insights - Li Ning's retail sales growth during the 11.11 Festival was in line with management's expectations, and the company has maintained its 2025 full-year guidance of year-on-year flattish sales with high single-digit net profit margin [1][2]. - The company aims to balance channel inventory control and retail discounting, with a target to reduce the channel-inventory-to-retail-sales ratio to 4-5x by the end of Q4 2025, likely closer to 4x [1][2]. - Management remains pragmatic about the business outlook for 2026, focusing on growing running and fitness categories, enhancing sports-casual products, and increasing footwear sales mix to over 60% from the current 50% [2]. - Li Ning has launched COC-themed products in Q4 2025, divided into three categories: Award Ceremony Outfit, Gold Label, and mass-market products, with expectations for stronger growth in COC products in 2026-2027 [2]. Summary by Sections Retail Sales and Guidance - Retail sales growth during the 11.11 Festival was in line with expectations, maintaining 2025E guidance of flattish sales and high single-digit net profit margin [1][2]. Inventory Management - The company is focused on controlling channel inventories and retail discounts, aiming for a channel-inventory-to-retail-sales ratio of 4-5x by the end of Q4 2025 [1][2]. Product Strategy - Li Ning is enhancing its focus on running and fitness categories, sports-casual products, and footwear, with a target to increase footwear sales mix to over 60% [2]. COC Product Launches - The company has launched COC-themed products in Q4 2025, with expectations for growth in 2026-2027, supported by branding campaigns around the Milan Winter Olympics 2026 [2].

Key Takeaways from the Conference Call Industry Overview - The focus is on the **China/Hong Kong Consumer** sector within the **Asia Pacific** region [4][7]. Core Insights - Recent marketing trips were conducted in the **US, Europe, and Singapore**, engaging with over **70 accounts**. There is a noted light holding in the China consumer sector, but interest levels are improving [7]. - Investors are concerned about the **macro question** regarding the **consumption recovery trajectory** and the impact of policies. Stock-level interest is concentrated on a small group of companies, with varying focuses by region [7]. - **US investors** are particularly interested in **idiosyncratic opportunities**, such as **Pop Mart**, while **EU and Singapore investors** show broader interest across sub-categories [7]. - Most investors believe that the overall **fundamental recovery** will take time, and they recognize that **fund flow rotation** is a significant factor, with risks associated with laggard catch-up [7]. - Emerging investment angles include: 1. Brands with **pricing power** that can maintain a premium position in a trade-down environment. 2. Companies that will benefit when the **wealth effect** shifts [7]. Consumption Drivers - Potential supportive policies and benefiting categories are highlighted, with expectations of likely **subsidies in 2026** and a potential positive wealth effect driven by a **stock market rally** [7]. Company-Specific Insights - **Pop Mart** is a focal point of debate; while the market is captivated by social media trends, it is essential to consider its growth in **recurring customers** and its strong **IP/product offerings**. The supply/demand dynamics are also a current topic of interest [7]. - **Sportswear** demand trends are being analyzed, with stock picking among companies like **ANTA**, **Amer**, and **Li Ning** [7]. - **Laopu** is discussed in terms of its value proposition, long-term growth drivers, and competition with European luxury and domestic jewelry brands [7]. - The impact of tariffs on **OEM** players is examined, particularly those better positioned between suppliers for footwear and apparel, with **Shenzhou** noted for its sales drivers [7]. - **Giant Biogene** is recognized for its barriers to entry, demand longevity, and margin trends [7]. - **YUMC** is analyzed for the impact of delivery subsidies [7]. - Potential recovery is anticipated in the **beer and dairy** sectors, along with opportunities in **home appliances** driven by state subsidies [7]. Additional Considerations - The report emphasizes the importance of understanding the **supply/demand dynamics** and the competitive landscape within the consumer sector, particularly in light of changing consumer behaviors and economic conditions [7].