Core Viewpoint - The company demonstrates a "steady" development approach amidst uncertainties, combining flexibility in strategy with a focus on sustainable growth [1][3]. Financial Performance - In the first half of 2025, the company achieved revenue of 14.82 billion yuan, a year-on-year increase of 3.3% - Gross profit reached 7.41 billion yuan, up 2.5%, with a gross margin of 50% - Net profit stood at 1.74 billion yuan, and cash and cash equivalents totaled 11.8 billion yuan, an increase of 4.3 billion yuan compared to the end of 2024 [1]. Strategic Approach - The company emphasizes a "steady" strategy that is not conservative but involves proactive measures in marketing and operational adjustments [2]. - The management highlights the importance of balancing aggressive marketing investments with systematic control and adjustments in operations [2][3]. Industry Context - The Chinese sports footwear and apparel industry is projected to grow to 598.9 billion yuan by 2025, with an expected annual growth rate of 11.62% from 2021 to 2025 [2]. - The industry is characterized by intense competition, with a multi-brand landscape and a focus on technological innovation and channel integration [2]. Brand Strategy - The company maintains a single-brand strategy, leveraging its founder's athlete background to enhance brand professionalism [4]. - This strategy allows the company to concentrate resources on the "Li Ning" brand, avoiding the risks associated with multi-brand acquisitions [4]. Product Performance - The company reported strong market recognition in categories such as running, basketball, and cross-training, with these categories accounting for 67% of retail sales [5]. - The running category saw a retail sales increase of 15%, with total sales of over 14 million pairs of running shoes in the first half of 2025 [5]. Innovation and R&D - The company has increased R&D investment by 8.7%, outpacing revenue growth, with cumulative R&D investment exceeding 3.8 billion yuan over the past decade [8]. - New technologies, such as the "超䨻" technology, are being developed to enhance product competitiveness [8][9]. Channel Optimization - The company is strategically opening new stores in emerging markets while maintaining high-quality channel standards [10]. - As of June 2025, the total number of stores was 7,534, with a focus on high-level market contributions [10]. Long-term Vision - The company's strategy reflects a commitment to long-term growth, aiming to remain one of China's leading brands over the next decade [12].

Core Insights - The outdoor sports industry in China has been expanding significantly since the "14th Five-Year Plan," with improvements in facilities and services, leading to the effective release of market potential [2][3] - The outdoor equipment industry, particularly sports footwear and apparel, has seen impressive performance in the first half of the year, with companies like Anta Sports, 361 Degrees, and Xtep International reporting strong results [4][7] - Mergers and acquisitions in the sports footwear and apparel sector are frequent, as companies seek to fill brand gaps and enhance customer coverage, exemplified by Xtep's acquisition of Saucony and Anta's acquisitions of various brands [9] Industry Growth - The outdoor sports market is witnessing a shift from niche to mainstream, with increasing consumer interest in outdoor activities such as cycling, hiking, and tennis, driving demand for quality gear [5][11] - The rise of new sports activities has contributed to the steady development of the outdoor sports industry, with a growing user base and an increase in outdoor events [3][6] Financial Performance - Domestic companies have reported notable financial growth in the first half of the year: - Anta's retail sales saw mid-single-digit growth, while FILA's retail sales grew in the high double digits - 361 Degrees achieved revenue of 5.7 billion yuan, an 11% increase year-on-year, with a net profit of 858 million yuan, up 8.6% - Xtep International reported revenue of 6.84 billion yuan, a 7% increase, and a net profit growth of 21.5% to 914 million yuan, marking a historical high [7] - Internationally, Adidas reported a 7.3% increase in net sales to 12.1 billion euros, while On Holding AG saw a 32% increase in net sales to 749 million Swiss francs [7] Market Trends - The outdoor apparel industry is experiencing a growth acceleration, driven by factors such as standardization, increased outdoor demand post-2020, and a younger consumer base [8] - Consumers are increasingly focused on the functional and emotional value of products, leading to a demand for high-quality, innovative outdoor gear [8][10] Mergers and Acquisitions - The trend of mergers and acquisitions is prevalent, with notable transactions including Xtep's acquisition of Saucony for $61 million and Anta's acquisition of Jack Wolfskin [9] - Industry leaders are pursuing acquisitions to address brand gaps and enhance market coverage [9] Consumer Behavior - There is a noticeable shift towards professional-grade outdoor equipment, with consumers demanding higher quality and functionality [10][11] - The market is seeing a rise in differentiated products and services to meet diverse consumer needs [11] Challenges and Opportunities - The industry faces challenges such as price declines, insufficient brand accumulation, and a slowdown in acquisition pace [12] - To overcome these challenges, brands are encouraged to innovate and shift from price competition to value competition, focusing on supply chain upgrades and brand building [12]

Investment Rating - The industry investment rating is "Positive" and is maintained [6] Core Insights - In FY2025Q2 (April 1, 2025 - June 30, 2025), Amer Sports achieved revenue of $1.24 billion, representing a year-on-year increase of 23%, exceeding Bloomberg's consensus estimate of $1.18 billion [2][4] - Gross margin improved by 2.7 percentage points year-on-year to 58.5%, driven by better channel, regional, product, and brand mix, as well as improved discount strategies [2][4] - The net profit margin attributable to shareholders increased by 1.8 percentage points year-on-year to 1.5% due to the rise in gross margin and a decrease in expense ratio [2] Revenue Breakdown - Revenue by region: Americas +6%, EMEA +18%, Asia-Pacific +45%, Greater China +42%, with total revenues of $400 million, $280 million, $150 million, and $410 million respectively [5] - Revenue by channel: DTC (Direct-to-Consumer) +40% to $640 million, Wholesale +9% to $600 million, with DTC channel driving growth [5] - Revenue by product: Technical Apparel +23% to $510 million, Outdoor Performance +35% to $410 million, Ball & Racquet Sports +11% to $310 million, with Outdoor Performance leading growth [5] Inventory and Guidance - As of FY2025Q2, the company's inventory increased by 29% year-on-year to $1.6 billion, primarily due to increased inventory of Arc'teryx to mitigate tariff impacts and delays in air freight [10] - The company raised its full-year guidance, expecting FY2025 revenue to grow by 20% to 21% year-on-year, with Technical Apparel and Outdoor Performance projected to grow by 22% to 25% [10]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 7.16 [1][7]. Core Insights - The company reported a revenue of RMB 6.838 billion for the first half of 2025, representing a year-on-year growth of 7.1%, and a net profit attributable to shareholders of RMB 914 million, which is a 21.5% increase compared to the previous year [2][3]. - The professional sports segment, including brands like Saucony, showed significant growth with a 32.5% increase in revenue to RMB 785 million, driven by strong offline retail performance [2][3]. - The company has adjusted its earnings per share (EPS) estimates for 2025-2027 to RMB 0.55, 0.62, and 0.68 respectively, reflecting a positive outlook based on the recent performance [3]. Financial Performance Summary - Revenue for 2025 is projected to be RMB 14.52 billion, with a growth rate of 6.9% [5]. - The net profit for 2025 is estimated at RMB 1.402 billion, indicating a growth rate of 13.2% [5]. - The gross margin is expected to stabilize at 43.2% for 2025, while the net profit margin is projected to be 9.7% [5][11]. - The company plans to maintain a dividend payout ratio of 50% in the coming years, with a projected dividend yield of 4.48% for 2025 [5][11]. Operational Efficiency - The company has optimized its channels, with a total of 7,924 stores for the main brand as of the first half of 2025, reflecting a net decrease of 42 stores since the beginning of the year [3]. - The company is focusing on enhancing its brand image and expanding its product matrix, particularly in the elite sports lifestyle segment [3]. - Following the divestiture of KSWISS and Palladium, the company aims to concentrate resources on its main brand and Saucony, which is expected to lead to faster growth in the future [3].

Group 1: Company Research - Longbai Group (002601.SZ) reported steady growth in titanium dioxide production and sales in H1 2025, with improved profitability in iron-based products and new energy materials. The forecast for net profit attributable to shareholders for 2025-2027 is 2.957 billion, 3.367 billion, and 3.753 billion yuan respectively, maintaining a "buy" rating [2] - Sinopec Oilfield Service (600871.SH/1033.HK) achieved total operating revenue of 37.05 billion yuan in H1 2025, a year-on-year increase of 0.6%, and a net profit of 490 million yuan, up 9.0%. The projected net profit for 2025-2027 is 909 million, 1.099 billion, and 1.315 billion yuan, maintaining an "increase" rating for both A and H shares [3] - Hualing Steel (000932.SZ) reported a net profit attributable to shareholders of 4.012 billion yuan for 2025, marking a significant recovery in the steel industry. The profit forecasts for 2025-2027 have been raised to 4.012 billion, 4.373 billion, and 4.760 billion yuan, maintaining an "increase" rating [4] - Shenghong Co., Ltd. (300693.SZ) reported a revenue of 1.362 billion yuan in H1 2025, a decrease of 4.79%, with a net profit of 158 million yuan, down 12.91%. The forecast for net profit for 2025-2027 is 490 million, 613 million, and 745 million yuan, maintaining a "buy" rating [5] - Huada Technology (002185.SZ) achieved revenue of 7.780 billion yuan in H1 2025, a year-on-year increase of 15.81%, with a net profit of 226 million yuan, up 1.68%. The projected net profit for 2025-2027 is 994 million, 1.380 billion, and 1.601 billion yuan, maintaining an "increase" rating [6] - Xtep International (1368.HK) reported a revenue increase of 7.1% and a net profit increase of 21.5% in H1 2025. The forecast for net profit for 2025-2027 is 0.49, 0.55, and 0.60 yuan per share, maintaining a "buy" rating [7] - Gilead Sciences-B (1672.HK) reported a revenue of 0.01 billion yuan in H1 2025, with a net loss of 88 million yuan. The forecast for net profit for 2025-2027 is -421 million, -414 million, and -344 million yuan, maintaining a "buy" rating [9] - Aimeike (300896.SZ) faced pressure in H1 2025 due to intensified competition in the medical beauty industry, with a revised net profit forecast of 1.624 billion, 1.818 billion, and 2.026 billion yuan for 2025-2027, maintaining a "buy" rating [10] Group 2: Industry Insights - The titanium dioxide supply is currently relaxed, leading to intensified price competition in the industry [2] - The oil and gas sector is experiencing fluctuations in prices, impacting the overall performance of companies like Sinopec Oilfield Service [3] - The steel industry is witnessing a profit recovery, attributed to the reduction of internal competition [4] - The energy storage business is under short-term pressure, while the AIDC business shows significant growth potential [5] - The semiconductor industry is expected to benefit from a recovery in demand, positively impacting companies like Huada Technology [6] - The sportswear market is seeing growth driven by the main brand and collaboration with other brands like Saucony [7] - The pharmaceutical industry is focusing on differentiated product pipelines, particularly in metabolic disease treatments [9] - The medical beauty industry is facing challenges due to increased competition and a sluggish consumer environment [10]

Group 1 - Huayou Cobalt achieved a revenue of 37.197 billion yuan in the first half of 2025, a year-on-year increase of 23.8%, with a net profit attributable to shareholders of 2.71 billion yuan, up 62.3% [5] - In Q2 2025, Huayou Cobalt's revenue reached 19.35 billion yuan, a year-on-year increase of 28.3% and a quarter-on-quarter increase of 8.5% [5] - The company reported a net profit of 1.46 billion yuan in Q2 2025, reflecting a year-on-year growth of 27% and a quarter-on-quarter growth of 16.5% [5] Group 2 - Sinopec Oilfield Service Company reported a total revenue of 37.05 billion yuan in H1 2025, a slight increase of 0.6% year-on-year, with a net profit of 490 million yuan, up 9.0% [6] - In Q2 2025, the company achieved a revenue of 19.2 billion yuan, a year-on-year increase of 4.99% and a quarter-on-quarter increase of 7.56% [6] - The net profit for Q2 2025 was 274 million yuan, showing a year-on-year decrease of 0.16% but a quarter-on-quarter increase of 25.44% [6] Group 3 - Keda Li reported steady growth in its main business, with a focus on becoming a platform company for robot components, particularly in precision processing and large-scale manufacturing [6] - The company is concentrating on its humanoid robot subsidiary, Kemon, which focuses on reducers and joint modules [6] Group 4 - Huatian Technology achieved a revenue of 7.78 billion yuan in H1 2025, a year-on-year increase of 15.81%, with a net profit of 226 million yuan, up 1.68% [7] - The semiconductor industry's recovery is expected to drive demand for the company's products, with anticipated accelerated performance in H2 2025 as capacity is gradually released [7] Group 5 - Xtep International reported a revenue increase of 7.1% and a net profit increase of 21.5% in H1 2025 [8] - The main brand and Saucony showed collaborative growth, with the main brand's revenue up 4.5% and professional sports revenue up 32.5% [8] - The company maintains its full-year guidance, expecting steady growth in the main brand's revenue and a 30-40% increase in Saucony's revenue [8] Group 6 - Aimeike reported a revenue of 1.3 billion yuan in H1 2025, a year-on-year decrease of 21.6%, with a net profit of 790 million yuan, down 29.6% [8] - The company experienced a decline in revenue and net profit in both Q1 and Q2 2025, with significant year-on-year decreases [8] Group 7 - Gilead Sciences-B reported a revenue of 0.01 billion yuan in H1 2025, with a net profit of -88 million yuan [8] - The company is fully transitioning to innovative drug research and development, with key clinical progress expected for its core metabolic disease treatment products by the end of this year to early next year [8]

Investment Rating - The report maintains a "Buy" rating for several key companies in the textile and apparel sector, including Anta Sports, Li Ning, and Bosideng, among others [5][10][36]. Core Insights - The textile and apparel industry is experiencing fluctuations in revenue, with notable differences in performance between companies in China and Southeast Asia. For instance, Vietnam's textile exports have shown significant growth compared to China's [1][18]. - The report emphasizes the importance of product differentiation and brand strength in the jewelry sector, predicting that companies with these attributes will outperform the industry in 2025 [3][34]. - The report highlights the impact of changing tariff policies in Southeast Asia, which may affect profit distribution within the manufacturing sector in the short term, while long-term competition is expected to improve for integrated and internationalized companies [4][35]. Summary by Sections Textile and Apparel - In July 2025, revenue performance varied among apparel manufacturers, with Feng Tai Enterprises reporting a -8.8% year-on-year decline, while Yu Yuan Group saw a +0.5% increase [1][13]. - China's apparel and accessory exports from January to July 2025 totaled $88.62 billion, down 0.3% year-on-year, while textile exports increased by 1.6% to $82.12 billion [18]. - Vietnam's textile exports during the same period reached $22.59 billion, up 13.7%, and footwear exports were $14.09 billion, up 9.9% [18]. Footwear and Sportswear - The report indicates a stable recovery in the consumer environment for clothing and home textiles, with a focus on the robust performance of the sportswear segment [2][33]. - Companies like Anta Sports and Xtep International are highlighted for their strong growth potential, with respective 2025 PE ratios of 17 and 11 [36]. Jewelry Sector - Companies like Chow Tai Fook and Chao Hong Ji are recommended for their improving product strength and channel efficiency, with Chow Tai Fook expected to see a 10% increase in operating profit for FY2025 [3][34]. Manufacturing Sector - The report suggests that companies with lower exposure to the U.S. market and stable profitability, such as Shenzhou International, are well-positioned, with a 2025 PE ratio of 12 [4][35]. - The report also notes the importance of new customer collaborations and international capacity expansion for companies like Huali Group and Weixing Co., both with a 2025 PE ratio of 17 [32][35].

Investment Rating - The report maintains a "Positive" investment rating for the sports footwear and apparel industry [6] Core Insights - The global sports footwear and apparel market is projected to reach $407.3 billion by 2024, with a CAGR of 4.6% from 2015 to 2024 [12][13] - The penetration rate of sports footwear and apparel is expected to reach 21.7% in 2024, with sports footwear at 45.7% and sports apparel at 15.7% [13] - The domestic market in China is expected to grow to 408.9 billion yuan by 2024, with a CAGR of 5.0% from 2019 to 2024, indicating a more favorable growth compared to the overall apparel sector [16] Summary by Sections 1. Market Growth and Trends - The global sports footwear and apparel market has shown resilience and is expected to grow steadily, with a significant increase in penetration rates [12][13] - In China, the market is also expanding, with a notable increase in the share of sports footwear and apparel within the overall footwear and apparel market [16] 2. Competitive Landscape - The global market is characterized by high concentration, with Nike and Adidas holding significant market shares of 13.4% and 8.2% respectively [44] - The CR10 (Cumulative Market Share of Top 10 Brands) in the global sports footwear and apparel market is 36.9% [44] - In China, the CR10 has reached 73%, with domestic brands gaining market share against international competitors [50] 3. Growth Drivers - National sports policies are increasingly supporting the industry, with infrastructure development and promotion of various sports [20][21] - There is a growing awareness of health among the population, leading to increased spending on sports and fitness [26][27] - The trend of consumption upgrading is driving the growth of niche sports segments, such as marathons and yoga [31][32] - The diversification of sportswear into everyday fashion (Athleisure) is expanding the market [36][41]

Core Viewpoint - The company reported a solid performance in H1 2025, with revenue growth of 11% and a net profit increase of 8.6%, while also raising its dividend payout ratio to enhance shareholder returns [1][4]. Group 1: Financial Performance - In H1 2025, the company's revenue reached 57 billion, with a gross margin of 41.5%, and a net profit of 8.6 billion, resulting in a net profit margin of 15% [1]. - The company declared a dividend of 20.4 Hong Kong cents per share, increasing the payout ratio from 40.3% in H1 2024 to 45% [1]. - The company expects revenue growth of 11.4% and net profit growth of 9.8% for the full year 2025 [4]. Group 2: Adult Business Segment - The adult footwear and apparel segment saw revenue growth of 8.2% to 41.8 billion, with footwear sales increasing by 12.8% to 25.7 billion and apparel sales growing by 1.6% to 16 billion [1][2]. - The company has enhanced its product offerings in the running and basketball categories, with a focus on brand strength through sponsorships and product innovation [2]. - The number of adult stores decreased by 71 to 5,669, while the average store size increased by 7 square meters to 156 square meters [2]. Group 3: Children's Business Segment - The children's business segment achieved revenue of 12.6 billion, reflecting a year-on-year growth of 11.4%, accounting for 22.1% of total revenue [3]. - The number of children's stores decreased by 56 to 2,494, but the average store size increased by 5 square meters to 117 square meters [3]. Group 4: E-commerce Business Segment - E-commerce revenue surged by 45% to 18.2 billion, representing 31.8% of total revenue, with 85% of e-commerce sales coming from exclusive products [4]. - The company improved its cash flow, with net cash from operating activities increasing by 227% to 5.24 billion [4]. - Inventory levels rose by 29% to 18.9 billion, with inventory turnover days extending by 24 days to 109 days, indicating support for e-commerce growth and replenishment needs [4].

Investment Rating - The industry investment rating is "Positive" and maintained [8] Core Insights - The report indicates that for FY2025Q2 (April 1, 2025 - June 30, 2025), the company achieved revenue of 750 million CHF, exceeding expectations (Bloomberg consensus expected 700 million CHF), with a year-on-year growth of 38.2% at constant exchange rates. The gross margin increased by 1.6 percentage points to 61.5%, primarily due to a higher proportion of revenue from the Direct-to-Consumer (DTC) channel, reduced shipping costs, and favorable foreign exchange impacts from the depreciation of the US dollar [2][6][11]. Summary by Sections Revenue Breakdown - Revenue continued to grow with strong performance across products and channels. 1. By region: FY2025Q2 revenue in the Americas increased by 23.6% year-on-year to 430 million CHF, driven by strong market demand and improved operational capabilities. EMEA and Asia-Pacific regions saw revenue growth of 46.1% and 110.9% year-on-year, reaching 200 million CHF and 120 million CHF respectively, with Greater China experiencing over 100% growth due to store expansion and rapid growth in same-store sales and e-commerce channels [7]. 2. By channel: FY2025Q2 revenue from DTC and wholesale channels grew by 54.3% and 28.8% year-on-year to 310 million CHF and 440 million CHF respectively. The strong growth in DTC was driven by increased global brand awareness and customer engagement, with DTC revenue accounting for 41.1% of total revenue, a new high for Q2 [7]. 3. By product: FY2025Q2 revenue for footwear, apparel, and accessories grew by 36.0%, 75.5%, and 143.2% year-on-year, reaching 700 million CHF, 40 million CHF, and 8 million CHF respectively. The strong growth in footwear was mainly driven by categories such as running, tennis, and outdoor sports, while increased customer loyalty in apparel contributed to revenue growth [7]. Inventory and Guidance - The company maintained a healthy inventory level, with FY2025Q2 inventory down by 10.2% year-on-year to 360 million CHF. The company has raised its full-year revenue guidance, now expecting at least a 31% year-on-year increase, translating to sales of 2.91 billion CHF (previous guidance was 28% and 2.86 billion CHF). The expected gross margin is between 60.5% and 61%, up from the previous range of 60% to 60.5% [11].