Core Insights - The controversy surrounding Adidas's down jackets being produced by the OEM Snow Flying has highlighted the brand's reliance on outsourcing production to third-party manufacturers, allowing it to focus on high-value activities like design and marketing [3][6][9] Group 1: Outsourcing and Production Strategy - Adidas has almost entirely outsourced its production, with very few products manufactured in-house, primarily high-end items produced in Germany [6][9] - The company has historically closed its own factories in China, relying on a network of OEMs concentrated in regions like Guangdong and Fujian for manufacturing [6][7] - The global production strategy includes expanding capacity in countries like Vietnam and Indonesia to optimize costs and mitigate risks [7][9] Group 2: Market Dynamics and Consumer Sentiment - The price difference between Adidas and Snow Flying products has led consumers to question the value of purchasing branded items when cheaper alternatives are available [4][9] - There is a growing consumer awareness regarding the origins of products, with many now scrutinizing manufacturing labels for transparency [19] Group 3: Financial Performance and Business Model - The outsourcing model has allowed Adidas to operate with a lighter asset base, significantly reducing fixed asset investments and risks [14] - In 2024, Adidas's revenue in Greater China grew by 10%, with a gross margin of 51.7% in Q2 2025, showcasing the financial benefits of the light asset model compared to traditional heavy asset models [14][15] Group 4: Challenges and Quality Control - The shift to outsourcing has raised concerns about quality control, with reports of product defects linked to manufacturing in regions like Vietnam and Cambodia [15][17] - The relationship between brands and OEMs is complex, balancing the need for production capacity with the risk of OEMs producing competing products [17]

Core Viewpoint - The article discusses the outsourcing model of major brands like Adidas, highlighting how they rely on third-party manufacturers for production while focusing on design, research, and marketing to maximize profits [3][10]. Group 1: Outsourcing Model - Adidas has outsourced its production to factories like Xuezhongfei and Bosideng, indicating that the brand has minimal in-house manufacturing capabilities [7][10]. - The outsourcing strategy allows Adidas to maintain a "light asset" operation, reducing fixed asset investments and risks while enabling quick adjustments to production based on market changes [17][19]. - The concentration of shoe manufacturing in regions like Guangdong and Fujian is due to the complete industrial chain and mature supply chain [8]. Group 2: Global Production Strategy - Adidas has expanded its production capacity overseas, particularly in Vietnam and Indonesia, to optimize costs and mitigate risks associated with supply chain disruptions [8][10]. - The company has shifted its production base from China to Southeast Asia since 2013, with Cambodia becoming the largest manufacturing country for Adidas apparel by 2021 [14][16]. - Recent adjustments have seen an increase in products manufactured in China, reflecting a strategic shift to regain consumer trust in the Chinese market [16][18]. Group 3: Quality Control and Consumer Awareness - The reliance on third-party manufacturers poses challenges in quality control, with past incidents of product quality issues reported [19][21]. - Consumers are becoming more aware of the production origins of their purchases, leading to a demand for transparency in the supply chain [22][23]. - The article emphasizes the importance of product labeling, as consumers can identify manufacturers through tags, which can influence purchasing decisions [22][23].

Core Viewpoint - The era of "technological sovereignty" has fundamentally changed the logic of global industrial competition, making technological innovation a necessity for survival and development rather than an option [1][6]. Group 1: Industry Innovation and Collaboration - The establishment of the "Sports Goods Industry Innovation Consortium" led by Anta aims to create an open and collaborative innovation platform to overcome common technological bottlenecks in the industry [3][5]. - The consortium has provided continuous R&D support and resource sharing, forming a technology innovation system that integrates enterprises, markets, and research [5][6]. - Anta's approach not only represents a technological revolution but also a development path that addresses how Chinese companies can systematically provide "innovation certainty" across the entire industry chain in a highly competitive global environment [6][18]. Group 2: Technological Advancements and Market Position - Anta achieved a historical revenue high in the first half of 2025, with a 14.3% year-on-year increase to RMB 38.54 billion, marking 12 consecutive years of growth and maintaining the top position in the Chinese market for four years [8]. - Over the past decade, Anta has invested more than RMB 20 billion in R&D innovation, establishing a strong foundation for market leadership through continuous technological investment [9][48]. - The gap between domestic brands and international giants is rapidly closing, with both sides now in a position of coexistence and competition rather than mere following [11][51]. Group 3: Material Science and Product Innovation - Anta's "fluorine-free membrane technology" and "six-degree core warming technology" represent significant advancements in material science, with the former achieving international advanced levels at one-third the price of international brands [13][16]. - The application of basalt fiber technology in outdoor apparel demonstrates a breakthrough in material innovation, with potential applications extending beyond sportswear to aerospace and medical fields [15][16]. - The innovation in core materials is expected to accelerate the localization of key materials in the industry, helping China's textile and apparel industry transition from a participant in the global value chain to a standard setter [18][54]. Group 4: AI Integration and Future Strategy - Anta has expanded its AI capabilities significantly, launching the "AI365 Strategy" to integrate AI across all business functions, including marketing, design, and supply chain [35][41]. - The introduction of the "Linglong Design Model" aims to enhance design efficiency, reducing development cycles by over 50% and increasing selection rates for design proposals by 30% [37][39]. - Anta plans to achieve over 50% internal AI usage coverage within three years, aiming to create value exceeding RMB 5 billion, thereby building a systematic competitive advantage centered on intelligent technology [42][43]. Group 5: Value Reassessment and Competitive Edge - Anta's role as a leader in the industry is reshaping its valuation logic, transitioning from a focus on acquisitions to building a technology-driven ecosystem [49][51]. - The company's deepening R&D investments and systematic ecological layout are critical drivers of its competitive edge, enabling it to break free from homogeneous competition and move towards higher-dimensional value competition [52][54]. - The establishment of a mature technological ecosystem allows Anta to efficiently connect R&D with market needs, promoting effective technology transfer and reducing reliance on external technologies [53][54].

Core Viewpoint - The company is facing pressure on overall revenue due to warmer weather, leading to a year-on-year decline in total channel revenue in the mid-single digits for Q3 2025, while maintaining a focus on marketing investments for the Olympics and product innovation [1][3]. Revenue Performance - In Q3 2025, total channel revenue decreased in the mid-single digits year-on-year, with a month-on-month weakening trend observed from July to September [1]. - Breakdown of revenue by channel shows offline channels experiencing a high single-digit decline, with wholesale channels down significantly and direct sales channels down in the mid-single digits; online channels, however, saw a high single-digit growth [1]. Discount and Inventory Management - Discounts have deepened across channels, with overall channel discounts increasing in the low single digits year-on-year; the wholesale channel saw a slight increase, while direct sales and e-commerce channels experienced a more significant increase [2]. - Inventory levels are manageable, with a healthy inventory-to-sales ratio maintained at 5-6 months; it is expected to be controlled at 4-5 months by year-end [2]. Store Expansion - The number of main brand stores increased to 6,132 by the end of Q3 2025, with a net addition of 33 stores from the previous quarter and 15 stores from the previous year; direct stores decreased by 46 from the previous year, while wholesale stores increased by 61 [2]. Product Innovation - The company is actively promoting new products, including the launch of the superbeng capsule for key products like the Feidian 6 and Chitu 9, as well as new basketball and outdoor products [2]. Marketing Initiatives - The company is enhancing its marketing efforts, including the launch of the 2026 Milan Winter Olympics gear for the Chinese sports delegation and collaborations for skiing events [3]. Profit Forecast and Investment Recommendation - The company aims to maintain revenue stability through 2025, with projected revenues of 28.74 billion, 30.29 billion, and 31.87 billion yuan for 2025-2027, reflecting growth rates of 0%, 5%, and 5% respectively; net profits are projected at 2.4 billion, 2.71 billion, and 2.96 billion yuan, with year-on-year growth rates of -21%, 13%, and 9% [3]. - The current stock price corresponds to a PE ratio of 17X for 2025 and 15X for 2026, with a strong buy recommendation maintained [3].

Core Insights - The running events in China are evolving into a new marketing platform for shoe brands, with the China Athletics Association reporting 749 running events in 2024, attracting a total of 7.0486 million participants [1][3] Running Events and Market Dynamics - The upcoming Beijing Marathon has seen brands like Adidas and Li Ning actively recruiting elite runners, offering incentives such as specialized running shoes and guaranteed race entries [3] - Historical data from the 2022 Beijing Marathon shows that international brands dominated the shoe market, with Nike at 45.37% and Adidas at 28.02%, while domestic brands like Jordan and Xtep held only 6.79% each [3] - In 2024, a shift occurred with Xtep leading the shoe market among sub-three-hour finishers at 22.5%, closely followed by Adidas at 22.4%, and Hongxing Erke surpassing Nike for the first time [4] Technological Advancements in Shoe Manufacturing - The core components of running shoes, including the outsole, midsole, and carbon plate, are critical to competition, with international brands historically leading in technology [4][5] - Domestic brands have made significant technological advancements, with Peak introducing its signature technology in 2018 and Li Ning launching innovative materials in 2019 [5] Marketing Strategies and Sponsorships - Sponsorships and collaborations with running groups have become essential marketing strategies for shoe brands, with Nike and Adidas leveraging partnerships to enhance brand visibility [6] - In 2023, Xtep sponsored 24 marathons, including the prestigious Xiamen Marathon, indicating a strong commitment to the running market [6] Market Growth and Sales Performance - The running market is expanding, with brands competing for a growing base of casual runners, which is reflected in sales data [6][7] - Li Ning's footwear accounted for 55.6% of its revenue in the first half of 2025, with a 15% increase in retail sales for its running category [6] - Xtep's Saucony brand reported over 30% year-on-year growth in retail sales, highlighting the competitive landscape [6]

Core Insights - The upcoming Beijing Marathon is driving a surge in sales of sports equipment, particularly running gear, as brands like Li Ning and Xtep expand their offerings in this segment [1][2] - The running shoe market in China is projected to become a competitive focal point for sports brands, with the overall sports footwear market expected to exceed 500 billion yuan by 2025 [1] - Li Ning's financial data indicates that running, basketball, and cross-training categories accounted for 67% of its retail revenue in the first half of 2025, with running shoes alone contributing 34% and experiencing a 15% increase in retail revenue [1] Company Insights - Li Ning has introduced multiple new running shoe products and is focusing on professional sports categories to enhance brand strength and product capability [1] - Despite facing challenges in offline traffic and discount pressures, Li Ning's investments in running and professional sports are expected to yield growth opportunities, particularly with upcoming Olympic-related marketing strategies [1] - The total sales volume of professional running shoes for Li Ning surpassed 14 million pairs in the first half of 2025 [1] Industry Insights - According to a report by the Chinese Sports Economic Research Center, nearly 60% of runners' direct spending is on apparel and wearable professional equipment, with spending on running clothing and shoes projected to increase from 29.98% in 2023 to 35.02% in 2024 [2] - The report highlights that 78% of runners prefer domestic brands for running shoes, with a strong preference for shoes priced between 500 and 999 yuan [2] - The running economy is seen as a key driver for high-quality development in the sports industry, promoting consumption upgrades and urban development [2]

Core Insights - Anta Sports reported Q3 2025 operational results, with Anta brand revenue growth in low single digits, Fila brand revenue growth also in low single digits, and other brands experiencing revenue growth of 45% to 50%, overall performance in line with expectations [1][2]. Anta Brand - In Q3 2025, Anta brand revenue growth was in low single digits, indicating a healthy operational quality despite a volatile domestic consumption environment and ongoing brand adjustments [1]. - The company is optimizing its offline store structure and enhancing adjustments for franchise stores in lower-tier cities, while also restructuring its e-commerce operations, which may temporarily impact e-commerce sales [1]. - As of the end of Q3 2025, the inventory-to-sales ratio for Anta brand is slightly above 5, with stable discounts in offline stores, reflecting a healthy operational level [1]. Fila Brand - Fila brand revenue growth in Q3 2025 was also in low single digits, affected by high temperatures and fluctuations in the consumption environment impacting autumn and winter apparel sales [2]. - E-commerce sales for Fila are expected to significantly outperform offline sales, with the brand's operational capabilities in e-commerce being strong [2]. - The inventory-to-sales ratio for Fila is projected to be around 6 by the end of Q3 2025, with an increase due to preparations for the National Day holiday and major sales events [2]. - Fila is expected to leverage the Q4 sales peak to drive brand growth, with a projected revenue growth in mid-single digits for 2025 [2]. - A new tennis strategy was announced in September 2025, highlighting collaborations with notable tennis players and institutions, indicating a clear development plan for the sport [2]. Other Brands - Other brands under Anta Sports experienced a revenue growth rate of 45% to 50%, showcasing the company's strong new brand incubation capabilities [2]. - Brands like Descente and Kolon are growing rapidly due to improved product strength and store operational capabilities [2]. - Maia Active is also expected to show excellent growth performance in Q3 2025 following successful adjustments [2]. Financial Outlook - For 2025, the company anticipates a revenue growth of 10%, with a projected revenue of 78.181 billion yuan, and a net profit growth of 9% year-on-year, reaching 13 billion yuan [3]. - The outdoor brands Descente and Kolon are expected to maintain strong growth rates [3]. - The profit forecast has been adjusted, with net profits projected at 13.03 billion, 14.78 billion, and 16.74 billion yuan for 2025-2027, corresponding to a PE ratio of 17 times for 2025, maintaining a "buy" rating [3].

Core Viewpoint - Anta Sports' Q3 2025 performance was slightly below expectations due to external factors like weather, but the company continues to show growth potential through its multi-brand strategy and expansion of new retail formats [1][2][3] Group 1: Q3 Performance - Anta brand recorded low single-digit growth in retail sales for Q3 2025 [1] - FILA brand also achieved low single-digit growth in retail sales for Q3 2025 [1] - Other brands, including DESCENTE and KOLON SPORT, experienced a significant retail sales growth of 45-50% in Q3 2025, indicating a strong performance in the outdoor segment [1] Group 2: Retail Expansion - As of mid-2025, Anta's main brand operates 7,187 stores, with various new store formats contributing to growth [1] - The company has introduced multiple new retail formats, including Anta Arena and Anta Champion, which are expected to drive future growth [1] - FILA's store count remains stable, while DESCENTE and KOLON SPORT continue to expand rapidly [1] Group 3: Multi-Brand Strategy - Anta Group completed the acquisition of JACK WOLFSKIN in H1 2025 and is developing a 3-5 year revitalization plan for the brand [2] - A joint venture with South Korean fashion group MUSINSA has been established, with Anta holding a 40% stake, aimed at expanding MUSINSA's presence in the Chinese market [2] - Anta has partnered with two universities to establish a sports shoe design program, focusing on integrating design, materials, technology, and digitalization [2] Group 4: Profit Forecast - The company is expected to achieve net profits of 13.443 billion yuan, 15.453 billion yuan, and 17.626 billion yuan for 2025-2027, with year-on-year growth rates of -13.81%, 14.96%, and 14.06% respectively [3] - The multi-brand strategy is anticipated to provide operational stability and growth, particularly in the outdoor segment, while maintaining controllable costs and overseas expansion potential [3]

Core Insights - HOKA, a key brand under Deckers Brands, is experiencing a slowdown in growth despite maintaining double-digit increases in sales and net profit, attributed to market saturation and increased competition [1][2][8] Financial Performance - For Q2 of fiscal year 2026, Deckers Brands reported net sales of $1.431 billion, a year-over-year increase of 9.1%, and net profit of $268 million, up 10.74% [2] - HOKA's net sales reached $634 million in Q2, reflecting an 11% year-over-year growth, while UGG's sales were $759 million, growing by 10.1% [2] - The overall sales forecast for Deckers Brands in fiscal year 2026 is approximately $5.35 billion, with HOKA's growth expected to be in the low double digits of 10%-15% [2][3] Brand Development - HOKA's net sales grew by 23.6% in fiscal year 2025, reaching $2.233 billion, and had previously seen growth rates exceeding 55% in earlier years [3] - HOKA contributes 45% to Deckers Brands' total sales, closely following UGG, which accounts for 51% [3] Market Trends - The growth of HOKA and similar brands is driven by consumer spending upgrades and the expansion of professional sports into the mass market, appealing to a broader consumer base [4] - The running shoe market in China is rapidly expanding, with significant increases in sales and participation in running events, indicating a growing demand for specialized running shoes [6][9] Competitive Landscape - The running shoe market is becoming increasingly competitive, with both international brands like Nike and Adidas and domestic brands like Anta and Xtep intensifying their presence [9][10] - HOKA faces challenges from traditional brands launching similar products and a potential consumer fatigue regarding the "thick sole" trend [10] Strategic Recommendations - To sustain growth, HOKA needs to enhance brand positioning towards high-end consumers, focus on product innovation, and embrace digital transformation to improve customer experience [10]

Investment Rating - The report maintains a strong buy rating for Li Ning (02331.HK) with a target price not specified [2][5] Core Views - In Q3 2025, the company's overall revenue faced pressure due to warmer weather, resulting in a year-on-year decline in total revenue in the mid-single digits. Despite deeper discounts, inventory remains controllable, and the company will continue to optimize channel structure while investing in Olympic marketing and product innovation. Management maintains guidance for flat revenue and high single-digit net profit margin for 2025 [1][5] - The projected net profit for 2025-2027 is estimated at 2.4 billion, 2.71 billion, and 2.96 billion yuan, with year-on-year growth rates of -21%, 13%, and 9% respectively. The current stock price corresponds to a PE of 17X for 2025 and 15X for 2026 [1][5] Summary by Sections Revenue Performance - In Q3 2025, total revenue declined in the mid-single digits year-on-year, with a weakening trend observed month by month from July to September. Offline channels saw a high single-digit decline, while online channels experienced high single-digit growth [5][6] - The overall discount level increased in Q3 2025, with inventory levels remaining healthy and controllable, expected to be within 4-5 months by year-end [5][6] Store Expansion and Product Innovation - The number of main brand stores increased to 6,132 by the end of Q3 2025, with a net addition of 33 stores compared to the previous quarter. The company continues to push for product innovation, with new launches planned in running, basketball, and outdoor categories [5][6] Marketing and Brand Strategy - The company is actively promoting its brand through Olympic marketing initiatives, including the release of the 2026 Milan Winter Olympics Chinese sports delegation award equipment and collaborations in skiing events [5][6] Financial Projections - Revenue projections for 2025-2027 are 28.74 billion, 30.29 billion, and 31.87 billion yuan, with growth rates of 0%, 5%, and 5% respectively. Net profit projections are 2.4 billion, 2.71 billion, and 2.96 billion yuan, with growth rates of -21%, 13%, and 9% respectively [6][9]