Core Viewpoint - Anta's 1H25 adjusted net profit increased by 14.5% year-on-year to RMB7.03 billion, aligning with expectations, driven by strong performance from brands like Descente and Kolon despite pressure on the core brand [1][2] Financial Performance - Anta's 1H25 adjusted net profit growth of 14.5% year-on-year to RMB7.03 billion was in line with consensus, while gross profit margin (GPM) declined by 0.7 percentage points to 63.4%, and operating profit margin (OPM) expanded by 0.6 percentage points to 26.3% [2] - The core brand's OPM improved by 1.5 percentage points to 23.3%, and the "other brands" segment saw an OPM increase of 3.3 percentage points to 33.2%, indicating improved operating efficiency [2] Sales Guidance - Anta revised its 2025 full-year guidance, expecting core brand retail sales value (RSV) to grow in the mid-single digits year-on-year, down from high-single digits, while Fila's RSV remains projected to grow in the mid-single digits [4] - Other brands, excluding Jack Wolfskin, are expected to see RSV growth exceeding 40%, up from previous expectations of over 30% [4] Strategic Developments - Anta's multiband strategy is advancing with a joint venture arrangement with Musinsa, aimed at exploring apparel markets beyond sportswear, potentially benefiting brands like Fila [5] - The company is planning a revitalization of Jack Wolfskin over the next 3-5 years and is open to further mergers and acquisitions, supported by a cash reserve of RMB55.6 billion [5] Market Position - Anta is expected to maintain its leadership in the apparel and sportswear industry, with strong brand performance from Descente and Kolon, and higher guidance from Amer Sports indicating potential for strong growth [7] - Despite a challenging retail environment, Anta is anticipated to trade at higher multiples than its peers [7] Valuation - The target price has been raised to HK$114.7, based on a 20x 2026E price-to-earnings ratio, equivalent to 22.8x 2025E price-to-earnings ratio [8]