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Market Overview - The U.S. stock market opened positively on September 19, 2025, extending gains from a record-setting Thursday, driven by strength in the technology sector and key corporate announcements [1][2] - The S&P 500 index rose to 6663 points, marking a 0.47% gain from the previous session, up 4.18% over the past month, and 16.84% higher compared to the same time last year [2] - All three major U.S. indexes reached new all-time closing highs on Thursday, indicating broad market strength beyond large-cap tech stocks [3] Corporate News and Stock Movements - Apple (AAPL) shares gained approximately 1% as the new iPhone 17 models went on sale globally, showing strong consumer demand for Pro models [7] - FedEx (FDX) initially jumped over 5% after reinstating its full-year outlook and reporting better-than-expected first-quarter profit and revenue, but later pared most gains [7] - Lennar (LEN) shares declined by 3% after quarterly revenue and profit fell short of analyst expectations, reflecting challenges in the housing sector [7] - Intel (INTC) shares surged nearly 23% on Thursday but were down 0.6% in premarket trading following Nvidia's $5 billion investment in Intel [11] - Tesla (TSLA) shares surged 22.6% over the past month, indicating strong performance [11] - Darden Restaurants (DRI) dropped 6% as earnings per share missed expectations, despite revenue meeting consensus [11] - Netskope saw its shares end 18% higher in its Nasdaq debut, while StubHub (STUB) stock fell 7% after a challenging debut [11] Economic Events and Indicators - A significant $5 trillion quarterly triple-witching options expiry is scheduled, with expectations of limited market impact [4] - Upcoming economic indicators include Global Purchasing Managers' Index (PMI) figures and the Federal Reserve's core Personal Consumption Expenditures (PCE) price index [6]

Federal Reserve Actions - The Federal Reserve announced its first rate cut of 2025, lowering the federal funds rate by 25 basis points to a target range of 4% to 4.25%, indicating a shift in monetary policy amidst inflation risks and slowing employment [3][7]. - Chair Jerome Powell described the current economic environment as a "challenging situation," highlighting persistent inflation risks and rising downside risks to employment [3][7]. - The FOMC confirmed its intention to continue reducing its holdings of Treasury securities and agency debt, with one governor dissenting for a more aggressive 50 basis point cut [3]. Deutsche Bank Lending Rate Adjustment - Deutsche Bank announced a reduction in its prime lending rate by 0.25 percentage points to 7.25%, effective September 18, 2025, impacting its U.S. operations [4][7]. Puma Takeover Speculation - Puma's shares surged by as much as 16.7% due to reports of a potential takeover bid from private equity firm CVC Capital Partners and Authentic Brands Group, targeting the 29% stake held by the Pinault family's holding company, Artemis [5][7]. - Sources indicated that Artemis is willing to sell their stake at approximately 40 euros per share [5]. Google and PayPal Partnership - Google (Alphabet) and PayPal announced a multiyear strategic partnership aimed at advancing digital commerce solutions, focusing on AI-powered shopping experiences [6][7]. - PayPal's payment solutions will be more deeply integrated across various Google platforms, including Google Cloud, Google Ads, and Google Play [6][8]. Mexican Government Debt Issuance - The Mexican government issued $13.8 billion in new debt to strengthen the financial position of state-owned oil company Pemex, following a $12 billion bond buyback [9]. - The issuance included 5 billion euros in bonds and $8 billion in dollar bonds, with total demand reaching an equivalent of $50.6 billion [9].

Industry Overview - The sportswear industry is experiencing rapid growth, driven by secular trends [1] - On Holding AG (NYSE: ONON) is highlighted as a strong performer within the industry [1] Investment Analysis - The analysis focuses on identifying undervalued stocks with growth potential, emphasizing a fundamental approach [1]

Summary of Conference Call Notes Industry Overview - The conference call discusses the **China Consumer** sector, focusing on consumption trends and market dynamics in **2Q25** and the outlook for **2H25** [1][2]. Key Points and Arguments 1. **Consumption Trends**: - Demand softened in **2Q25**, with unexciting demand continuing into **3Q25**. Some categories like restaurants, sportswear, prepared food, and spirits showed minor sequential improvements in August, attributed to normalizing policy impacts [1][2]. - Companies maintain a prudent outlook due to demand uncertainty, with expectations for significant demand-side stimulus being unlikely in the near term [1]. 2. **Pricing Dynamics**: - There are downside risks to pricing in categories such as sportswear and spirits due to demand softness. The restaurant sector is experiencing intensified pricing activities driven by food delivery subsidies and market education on new categories [1][2]. 3. **Structural Growth Opportunities**: - Continued demand for experience-based consumption, particularly in IP retailers, freshly made drinks, and pet foods [2]. - Opportunities for category expansion and penetration in beverages, cosmetics, and pet foods, with companies like Laopu experiencing upward brand cycles [2]. - Overseas expansion remains a growth opportunity, especially in home appliances, despite demand uncertainties [2]. - Lower-tier cities present untapped potential for various categories [2]. 4. **Sector Preferences**: - Preferred sectors include sports brands, diversified retailers, beverages, and pet food. Least preferred sectors are apparel/footwear OEM, furniture, projectors, and non-super-premium spirits [3][8]. 5. **Stock Recommendations**: - Buy recommendations include companies like Anta, Eastroc, Midea, and WH Group, while jewelry has been upgraded to Neutral due to stabilized sentiment [8]. 6. **Market Sentiment**: - The market is showing interest in turnaround themes, with shareholder returns supporting stock prices [2]. Additional Important Content - The macroeconomic environment remains resilient, but consumption-related indicators are muted. The GS macro team anticipates limited significant demand-side stimulus due to the stable GDP numbers [1][9]. - The report highlights a divergence in performance among companies, with stronger brands gaining market share while weaker ones struggle [9]. - The conference call also touches on the impact of policy changes, including temporary interest and childbirth subsidies, which may influence consumer behavior [1]. Conclusion - The China Consumer sector is navigating a challenging landscape with softer demand and pricing pressures. However, structural growth opportunities and strategic sector preferences present potential investment avenues. The outlook remains cautious, with companies focusing on prudent strategies to manage uncertainties in demand and pricing.

Core Viewpoint - Artemis, the holding company of the Pinault family, will not sell its 29% stake in Puma at the current market value and is not in negotiations for a deal, despite previous reports suggesting otherwise [1][2]. Stake and Market Activity - Artemis' stake in Puma is valued at approximately $960 million, and the company has received interest from various potential buyers, including private equity firms and industry peers, but is not currently negotiating any sales [1][2][5]. - Following the August 25 report about potential buyers, Puma shares surged by 15% but have since lost most of those gains [2]. Valuation and Market Performance - A source indicated that Artemis believes Puma is worth significantly more than its current market value, reflecting a strong belief in the brand's potential despite its recent struggles [3]. - Puma's shares have decreased over 60% in value over the past two years due to a loss of market share and challenges in generating interest in new sneaker models [3]. Future Outlook - While Puma may not remain in Artemis' portfolio indefinitely, the timing for a sale is not considered right at present [4]. - The newly appointed CEO of Puma, Arthur Hoeld, has the full confidence of Artemis, and the company does not face any debt maturities in the near term that would necessitate asset sales [6].

It is the third-biggest company in a global sportswear industry that is worth $446bn by net sales, according to estimates by Morgan Stanley.Despite this growth, Lululemon has not managed to interest existing customers in its latest products https://t.co/Ea2KKdxtHs ...

Core Insights - Nike has faced significant challenges in recent years but is showing signs of recovery and potential growth [1][6] - The company has made strategic changes in leadership and is focusing on innovation and brand rebuilding [4][10] Financial Performance - For the fiscal year, Nike's revenue decreased by 10% to $46.3 billion, and net income fell by 44% to $3.2 billion [8] - In the fourth quarter, revenue dropped 12% to $11.1 billion, with net income down 86% to $211 million [8] - The company anticipates a mid-single-digit revenue decline for the first quarter, with additional cost pressures from tariffs estimated at $1 billion [9] Competitive Advantages - Nike maintains a strong roster of high-profile sponsors and is recognized as the most valuable brand in sportswear [10][11] - The brand's legacy products, such as the Air Force 1 and Air Jordan, continue to have significant consumer appeal [11][12] Growth Potential - If Nike can return to its previous profit levels, it has the potential to recover its stock price, which is currently over 50% lower than its peak in 2021 [6][14] - The footwear and apparel market has grown since 2021, providing a favorable environment for Nike's recovery [13][14]

Summary of Li Ning Conference Call Company Overview - **Company**: Li Ning (2331.HK) - **Industry**: China/Hong Kong Consumer - **Market Cap**: US$6,323 million - **Current Price**: HK$19.70 - **Price Target**: HK$25.00, representing a 27% upside from the current price [7][20] Key Points Financial Performance and Guidance - **Sales Growth**: Li Ning's sales growth is influenced by China's macroeconomic environment, with conservative assumptions baked into forecasts [1][3] - **2025 Guidance**: The company maintains guidance for stable sales and high single-digit net profit margin (NPM) for 2025, targeting over 10% NPM in the long term [9][22] - **1H25 Performance**: Reported net profit (NP) decreased by 11% year-over-year, with a projected double-digit decline in reported NP for 2025 [3][22] - **Gross Profit Margin (GPM)**: GPM contracted by 0.4 percentage points to 50% in 1H25, with expectations of further contraction in 2H25 due to deeper discounts [3][20] Market Position and Competitive Landscape - **Market Share**: Li Ning holds a leading market share in basketball in China, with plans to launch new shoes at a lower price to expand its customer base [10][11] - **Product Categories**: Professional products contributed over 60% of total revenue in 1H25, with running products showing a CAGR of over 20% compared to the industry average of ~9% [10][11] - **Challenges**: Bears argue that Li Ning's slower growth compared to peers, single brand focus, and fierce competition hinder brand differentiation [2][3] Operational Strategy - **Cost Management**: The company has improved control over advertising and promotion (A&P), staffing, and leases, leading to a core operating profit (OP) beat in 1H25 [4][21] - **Organizational Changes**: Li Ning has established category business units to drive growth, although this may introduce inefficiencies in merchandising and marketing [11][12] Marketing and Brand Strategy - **Marketing Initiatives**: Li Ning's partnership with athletes, including a deal with COC and sponsorship of NBA player Hansen Yang, aims to enhance brand storytelling and restore brand momentum [5][10] - **Product Mix Improvement**: The company is focusing on enhancing its product mix, particularly in functional apparel, to better align with market demands [10][11] Financial Estimates and Valuation - **Earnings Estimates**: Adjusted NP estimates for 2025 are projected at Rmb3,345 million, reflecting a 17% increase from previous estimates [24][25] - **Valuation Metrics**: Li Ning is currently trading at 16-17x 2025 P/E, which is not considered cheap by some analysts [3][22] - **Impairment Losses**: Impairment from investment properties is expected to continue affecting NP through 2027, with a projected NPM of 9.4%, 10.2%, and 11.1% for 2025-2027 [22][24] Risks and Considerations - **Operational Expenses**: Operating expenses are expected to rise in 2H25 due to Olympic-related costs and higher labor costs from stock-based compensation [12][20] - **Tax Rate**: The tax rate increased to 33% in 1H25, influenced by higher withholding tax and non-cash charges, with expectations of a continued rise in 2025 [14][20] Conclusion - Li Ning is positioned for potential margin recovery and growth, supported by strategic marketing initiatives and improved operational efficiency. However, challenges from macroeconomic conditions and competitive pressures remain significant factors to monitor [1][4][22]

Business Transaction - Ineos sold Belstaff, a motorcycle jacket manufacturer, to Castore [1] - Ineos acquired a stake in Castore, a sportswear brand backed by Andy Murray, as part of the deal [1]