Core Viewpoint - Anta Sports reported mixed performance for Q2 2025, with the main brand showing low single-digit growth, while FILA and other brands experienced higher growth rates, indicating a diversified brand performance strategy [1][2] Group 1: Brand Performance - Anta's main brand recorded low single-digit growth in Q2 2025, slightly below expectations, with children's products performing better than bulk goods [1] - FILA achieved mid-single-digit growth in Q2 2025, meeting expectations, with children's and Fusion products showing strong performance [1] - Other brands experienced a significant growth of 50-55% in Q2 2025, with Descente and KOLON showing over 40% and 70% growth respectively [2] Group 2: Financial Projections - The company forecasts EPS for 2025-2027 to be 4.72, 5.26, and 5.88 CNY respectively, with a target price of 113.6 HKD based on a 22x PE ratio for 2025 [2] Group 3: Strategic Developments - The acquisition of Jack Wolfskin, a German outdoor brand, was completed in Q2 2025, which is expected to enhance Anta's presence in the outdoor market in China [2] - The company is implementing a "lighthouse store plan" to strengthen its offline presence while enhancing online sales strategies [1]

Investment Rating - The report maintains a "Buy" rating for Anta Sports with a target price of HKD 113.6, reflecting a potential upside from the current price of HKD 92.45 [6]. Core Insights - Anta's main brand recorded low single-digit growth in Q2 2025, slightly below expectations, while FILA achieved mid-single-digit growth. Other brands saw significant growth of 50-55% [2][3]. - The company has completed the acquisition of Jack Wolfskin, a German outdoor brand, for USD 290 million, which is expected to enhance its presence in the outdoor market in China [3]. - The financial projections for EPS from 2025 to 2027 are estimated at RMB 4.72, RMB 5.26, and RMB 5.88 respectively, indicating a positive growth trajectory despite some fluctuations in profit margins [4][3]. Summary by Sections Brand Performance - Anta's main brand experienced low single-digit growth in Q2 2025, with children's products performing better than bulk items. The overall H1 performance showed mid-single-digit growth [2]. - FILA's Q2 2025 revenue growth was in the mid-single digits, aligning with expectations, while other brands, including Descente and KOLON, reported over 40% and 70% growth respectively [2][3]. Financial Projections - Revenue is projected to grow from RMB 62.36 billion in 2023 to RMB 92.97 billion by 2027, with a compound annual growth rate (CAGR) of approximately 10.8% [4]. - The net profit for 2025 is expected to be RMB 13.25 billion, reflecting a decrease of 15% compared to 2024, followed by a recovery in subsequent years [4]. Valuation Metrics - The report assigns a 2025 PE ratio of 22 times, based on industry averages and brand premium considerations, supporting the target price of HKD 113.6 [3][4]. - The projected gross margin remains stable around 62%, with net profit margins expected to fluctuate between 16.9% and 17.8% over the forecast period [4][11].

Core Viewpoint - The company reported a decline in revenue and net profit for the first quarter of 2025, attributing the downturn to decreased sales, increased expenses, asset impairment provisions, and reduced government subsidies [1][3]. Financial Performance Summary - In Q1 2025, the company's revenue was 1.303 billion, a year-on-year decrease of 3.66%, and the net profit attributable to shareholders was 170 million, down 31.90% [1]. - For the full year 2024, the company reported revenue of 5.153 billion, a decline of 1.91%, and a net profit of 495 million, down 29.07% [2][3]. - The operating cash flow for 2024 was 702 million, a decrease of nearly 40% compared to the previous year [2]. Brand Performance Analysis - The main brands, including Baoxini, HAZZYS, and Baoniao, collectively accounted for approximately 87.16% of total sales, with only HAZZYS showing a slight increase of 1.29% [9][10]. - Baoxini's revenue fell by 8.35%, while Baoniao's decreased by 2.89% [9][10]. - The company has focused on a multi-brand strategy, which has been a key driver of growth, but the main brands are now facing challenges [8][11]. Market Environment and Challenges - The overall apparel industry is under pressure due to a slowing macroeconomic environment and a decline in consumer spending, particularly affecting clothing demand [3][13]. - The men's apparel market in China has shown limited growth potential, with many consumers opting for custom suits rather than ready-to-wear options [13]. - The company faces competition from both domestic and international brands, with a significant market share held by foreign high-end brands [13]. Strategic Moves and Future Outlook - The company has begun acquiring the American outdoor brand Woolrich, aiming to enhance its product offerings and brand portfolio [24][32]. - Woolrich's acquisition is seen as a potential avenue for growth, although it does not include contributions from the European market, which is its primary revenue source [32]. - The company is also investing in a new R&D center in Shanghai to support the global development of Woolrich [32]. Conclusion - The company is navigating a challenging market landscape with declining revenues and profits, while attempting to diversify its brand portfolio through strategic acquisitions and investments in new product lines [37].