Core Viewpoint - Anta is actively pursuing growth through strategic acquisitions, even amidst a general slowdown in investment and mergers within the internet sector. The company aims to enhance its multi-brand portfolio to drive sustainable growth and maintain its market leadership in China [5][6]. Financial Performance - Anta Sports reported a revenue increase of 14.3% year-on-year to 38.54 billion yuan for the first half of 2025, marking a historical high. Adjusted net profit rose by 7.1% to 6.597 billion yuan [8][10]. - All brands under Anta experienced revenue growth, with the Anta brand itself growing by 5.4% to 16.95 billion yuan, while FILA grew by 8.6% to 14.18 billion yuan. Other brands collectively surged by 61.1% to 7.41 billion yuan [10][11]. Brand Performance - The Anta brand, accounting for 44% of total revenue, showed a modest growth of 5.4%, which was slightly below market expectations. This was attributed to strategic adjustments and external pressures [10][11]. - FILA, recognized as a "profit cow" for the group, demonstrated resilience with a revenue of 14.182 billion yuan and a significant operating profit margin [11][13]. - Other brands, primarily Descente and KOLON, achieved remarkable growth rates exceeding 30%, indicating a successful diversification strategy [13][19]. Acquisition Strategy - Anta's acquisition strategy is underscored by its successful integration of FILA, which transformed from a struggling brand into a major revenue driver. The company has committed to a "buy and operate" methodology to replicate this success across multiple brands [20][23]. - Recent acquisitions include a joint venture with the Korean fashion platform MUSINSA and the full acquisition of the outdoor brand Jack Wolfskin for $290 million, reflecting Anta's commitment to expanding its brand matrix [16][27]. - The company has established a clear focus on acquiring brands with strong market potential and aligning them with its operational capabilities to enhance overall performance [26][28]. Market Position - Anta's revenue for the first half of 2025 is comparable to the combined revenues of Nike and Adidas in the Greater China region, highlighting its significant market presence [13][14]. - The company has positioned itself as a leader in the Chinese sportswear market, with a strategy that emphasizes both domestic dominance and global expansion [25][31].

Investment Rating - The report maintains a "Buy" rating for the company [5][10]. Core Views - The company has shown strong performance in the first half of the year, achieving a revenue growth of 14.3% despite a relatively weak domestic consumption environment [9]. - The operating profit margin has improved by 0.6 percentage points year-on-year, attributed to refined operations and increased contributions from high-margin brands [9]. - The main brands, Anta and Fila, are expected to maintain steady growth, while other brands like Descente and Kolon are projected to grow rapidly, contributing significantly to overall revenue [9]. Financial Forecast and Investment Recommendations - The earnings per share (EPS) forecasts for 2025-2027 are adjusted to 4.80, 5.54, and 6.21 RMB respectively, with a target price of 135.86 HKD based on a 26x PE valuation for 2025 [4][10]. - Revenue projections for the company are as follows: 62,356 million RMB in 2023, growing to 97,528 million RMB by 2027, with a compound annual growth rate (CAGR) of approximately 10.7% [4][12]. - The net profit attributable to the parent company is expected to reach 10,236 million RMB in 2023, with a forecasted increase to 17,427 million RMB by 2027 [4][12]. Company Performance Metrics - The company achieved a gross margin of 62.6% in 2023, with projections indicating a slight decline to 62.5% by 2027 [4][12]. - The net profit margin is expected to fluctuate from 16.4% in 2023 to 17.9% in 2027, reflecting stable profitability [4][12]. - Return on equity (ROE) is projected to decrease from 18.3% in 2023 to 17.3% in 2027, indicating a slight reduction in efficiency over the forecast period [4][12].

Core Viewpoint - Anta Group has managed to maintain its position in a changing market, achieving a revenue growth of 14.3% year-on-year to 38.544 billion RMB in the first half of 2025, despite a decline in net profit attributable to shareholders by 8.9% to 7.031 billion RMB [1][3][4]. Financial Performance - Anta's revenue growth is notable compared to competitors, with Li Ning's revenue growing by only 3.3% to 14.82 billion RMB and Adidas China achieving a 13% increase to approximately 15 billion RMB [3][4]. - The company's gross profit margin decreased by 0.7 percentage points to 63.4%, with the main brands, Anta and FILA, experiencing declines in their gross margins [11][12]. - Operating profit margin improved by 0.6 percentage points to 26.3% due to refined operations and resource optimization [15]. Brand Performance - Anta's brand revenue grew by 5.4% to 16.95 billion RMB, while FILA's revenue increased by 8.6% to 14.182 billion RMB. Other brands, including Descente and Kolon, saw a significant revenue increase of 61.1% [8][9]. - The performance of the outdoor brand Jack Wolfskin, acquired by Anta, is expected to enhance the company's market position in the mid-range outdoor segment [16]. Market Environment - The domestic market is currently experiencing fluctuations, with a 5.0% year-on-year growth in retail sales of consumer goods, and a 3.1% increase in clothing and footwear sales [7]. - Consumer confidence remains cautious, impacting overall market dynamics and contributing to the revenue decline of competitors like Nike in the Greater China region [7][8]. Strategic Initiatives - Anta is focusing on enhancing profitability through investments in innovation, digitalization, and retail transformation, while also seeking high-quality acquisition opportunities to strengthen its multi-brand strategy [10][17]. - The company has established a joint venture with South Korean fashion group MUSINSA to tap into the young consumer trend and explore the integration of fashion and sports industries [16][18].

Core Viewpoint - Anta Group has managed to maintain its position in a changing market, achieving a revenue growth of 14.3% year-on-year to 38.544 billion RMB in the first half of 2025, despite a decline in net profit attributable to shareholders by 8.9% to 7.031 billion RMB [1][3][4] Financial Performance - Anta's revenue growth is notable compared to competitors, with Li Ning's revenue growing by 3.3% to 14.82 billion RMB and Adidas China growing by 13% to approximately 15 billion RMB [3][7] - The company's gross profit margin decreased by 0.7 percentage points to 63.4%, with the main brands, Anta and FILA, experiencing declines in their gross margins [11][12] - Operating profit margin increased by 0.6 percentage points to 26.3%, indicating effective cost management despite market pressures [15][14] Brand Performance - Anta brand revenue grew by 5.4% to 16.95 billion RMB, while FILA's revenue increased by 8.6% to 14.182 billion RMB, and other brands saw a significant growth of 61.1% to 7.412 billion RMB [8][6] - The performance of specific brands like Descente and KOLON has been strong, with Descente's store efficiency improving significantly [9][8] Market Context - The domestic market is experiencing fluctuations, with retail sales of clothing and footwear growing by only 3.1% [7] - Consumer confidence remains cautious, impacting overall market dynamics and contributing to the revenue decline of competitors like Nike in the Greater China region [7][3] Strategic Focus - Anta is prioritizing profit enhancement through investments in innovation, digitalization, and retail transformation, while also seeking high-quality acquisition opportunities [10][16] - The company has completed the acquisition of Jack Wolfskin and established a joint venture with Korean fashion group MUSINSA to tap into the young consumer market [16][17] Future Outlook - Anta's strategy remains focused on "single focus, multi-brand, globalization," aiming to meet diverse consumer needs and explore new markets [16][18] - The company is balancing expansion with profit protection, which will test management capabilities in a volatile market [19][18]

Core Viewpoint - The company reported its Q2 2025 operational data, showing performance in line with expectations, with a double-digit revenue growth overall, while the main brand Anta experienced low single-digit growth [1][2]. Group 1: Anta Brand Performance - In Q2 2025, Anta's brand revenue growth was low single-digit, while the first half of the year showed mid single-digit growth, which was below internal expectations due to several factors [2]. - The company accelerated store upgrades in lower-tier cities, impacting short-term sales but laying a foundation for future growth [2]. - The competitive landscape during the online 618 shopping festival led to a cautious approach on discounts to maintain brand health [2]. - A new e-commerce head was appointed to enhance product differentiation across platforms, with expectations for improved sales performance in the second half of the year [2]. Group 2: New Retail Formats and Other Brands - Anta's new retail formats, such as champion stores and SV collection stores, have shown significant effectiveness, with champion stores achieving 80% higher sales efficiency than regular stores [3]. - FILA continued its steady growth with mid single-digit revenue growth in Q2, driven by a recovery in main products and strong e-commerce performance [3]. - New brands like Descente, KOLON, and Maia Active showed exceptional growth, with Descente exceeding 40% and KOLON over 70% in Q2 [3]. Group 3: Inventory and Financial Outlook - Inventory levels remained healthy, with a stock-to-sales ratio of around five months for Anta and FILA [4]. - The company maintained effective cost control, which is beneficial for stabilizing overall operating profit margins [4]. - The multi-brand matrix is seen as a valuable asset, with expectations for continued growth potential, maintaining a "buy" rating and profit forecasts for 2025-2027 [4].

Group 1: Anta Sports Products (2020 HK) - The second quarter revenue met expectations, with management reaffirming the annual guidance for 2025, indicating low single-digit, mid single-digit, and 50-55% year-on-year revenue growth for Anta, FILA, and other brands respectively [3] - Despite intense industry competition, management maintains growth guidance for all brands, expecting high single-digit, mid single-digit, and over 30% year-on-year growth for Anta, FILA, and other brands respectively [3] - The forecast for net profit from 2025 to 2027 is projected to be between RMB 13.41 billion and RMB 16.54 billion, with a target price of HKD 110.20 based on a 20x P/E ratio for 2026, maintaining a buy rating [3][4] Group 2: Junda Co., Ltd. (002865 CH) - The company expects a loss of RMB 0.94 billion to RMB 1.94 billion in Q2 2025, which is an increase from the loss of RMB 1.06 billion in Q1 2025, primarily due to a decline in battery prices following a surge in installations in mainland China [5] - Junda has signed a strategic cooperation agreement with Turkey and Europe's largest photovoltaic module manufacturer to jointly build a solar cell production base with a capacity of up to 5GW [5] - The outlook remains positive for the company, anticipating a turnaround in performance in 2026 driven by the commencement of production in Oman and supply-side reforms [5] Group 3: E-commerce Industry - In Q2 2025, adjusted year-on-year growth for physical e-commerce retail sales was 6.3%, with categories like home appliances and cosmetics experiencing a decline in growth [7] - E-commerce platforms are increasing investments in instant retail to drive cross-selling with traditional shelf e-commerce, enhancing user engagement [7] - Major players like Alibaba and JD.com are expected to maintain double-digit year-on-year growth, although profitability may be pressured due to increased investments in flash sales and delivery services [8] Group 4: Economic Data Insights - The consumer price index for June is expected to show a month-on-month increase of 0.30% in both the US and China, with the previous data being 0.10% [9] - The industrial product factory price index is anticipated to rise by 0.20% year-on-year in the US for June [9]

Investment Rating - The investment rating for Anta Sports is "Buy" (maintained) [2] Core Views - The company reported better-than-expected retail performance for Q1 2025, with overall revenue growth in double digits, particularly strong growth from Anta and FILA brands [7] - The acquisition of Jack Wolfskin for $290 million enhances Anta's multi-brand strategy and global presence in the outdoor apparel market [7] - The company maintains a healthy inventory level with a slight increase in discount rates, indicating stable demand [7] - The financial forecasts for net profit are projected at RMB 134.1 billion, RMB 147.0 billion, and RMB 160.1 billion for 2025, 2026, and 2027 respectively, with corresponding PE ratios of 16, 14, and 13 [7] Financial Data and Earnings Forecast - Revenue projections are as follows: - FY2023: RMB 623.6 billion - FY2024: RMB 708.3 billion - FY2025E: RMB 779.5 billion - FY2026E: RMB 839.2 billion - FY2027E: RMB 900.7 billion - Year-on-year growth rates for revenue are expected to be 16%, 14%, 10%, 8%, and 7% respectively [6] - Net profit forecasts are as follows: - FY2023: RMB 102.4 billion - FY2024: RMB 156.0 billion - FY2025E: RMB 134.1 billion - FY2026E: RMB 147.0 billion - FY2027E: RMB 160.1 billion - Year-on-year growth rates for net profit are expected to be 35%, 52%, -14%, 10%, and 9% respectively [6] - The gross margin is projected to be around 62% for the next few years, with slight fluctuations [6]