Industry Overview - The sports industry in China has shown an average annual growth rate of over 10% in the past five years, contributing to national economic growth and local economic transformation [1] - In July, retail sales of sports and entertainment products increased by 13.7%, indicating a strong consumer interest in sports [1] Company Performance - Li Ning reported a total revenue of 14.82 billion yuan for the first half of 2025, a slight increase of 3.3% year-on-year, while net profit attributable to shareholders decreased by 11% to 1.74 billion yuan [3] - Amer Sports achieved a revenue growth of 23% to 1.236 billion USD in the second quarter of 2025, turning a profit of 18 million USD compared to a loss of 4 million USD in the previous year [3] - 361 Degrees reported a revenue of 5.705 billion yuan for the first half of 2025, an increase of 11%, with net profit rising by 8.6% to 858 million yuan [3] Product Segmentation - Footwear accounts for 56% of Li Ning's total revenue, with the running category experiencing a compound annual growth rate of approximately 9.5% over the past three years, and Li Ning's running category growing over 20% [4] - Amer Sports' brand Arc'teryx has seen significant growth in footwear, with a three-digit growth rate last year, and plans to launch a series of new footwear products in the second half of 2025 [4] - The badminton segment has become a key growth area for Li Ning, with badminton products now accounting for 7% of the company's revenue, and high-end rackets seeing monthly sales of 100,000 units [6] Market Trends - The trend towards professionalization and scene segmentation in sports consumption is evident, with brands increasingly focusing on footwear and outdoor activities like marathons and hiking [5] - 361 Degrees is also developing a women's tennis product line, which is expected to enhance product synergy and optimize customer structure [7] - Wilson, a brand under Amer Sports, has experienced strong growth in its tennis apparel and footwear business, with plans to open approximately 50 new tennis stores in China this year [9]

Core Insights - The tennis footwear and apparel sector shows significant growth potential and opportunities, driven by the recovery of discretionary consumption and supportive government policies [1][2] - The global tennis participation is increasing, with over 106 million participants expected by 2024, a 21.6% increase from 2021, and the number of tennis courts growing by 20.8% to approximately 698,000 [1] - The Chinese tennis market is projected to reach 36.75 billion yuan by 2024 and 62.49 billion yuan by 2029, with participation expected to grow from 23.61 million in 2024 to over 30 million by 2029 [2] Industry Growth - The tennis industry in China is experiencing robust growth due to government support, including policy backing and financial investment, fostering the development of training, events, and venue construction [2] - The competitive landscape in China's tennis footwear and apparel market is evolving, with international brands like NIKE and ADIDAS entering, while local brands innovate and target the high-end market [3] - In 2023, the sales revenue of tennis apparel (including footwear) in China reached approximately 1.51 billion yuan, accounting for 56% of the overall tennis product market, driven by strong consumer demand for sportswear [3]

Investment Rating - The industry investment rating is "Strong Buy" with an expectation that the stock price will outperform the market by over 20% within six months [64]. Core Insights - The sports and outdoor industry presents significant investment opportunities, particularly in the tennis sector, driven by increasing popularity and government support [2][3]. - The tennis market is expanding from traditional regions like Europe and North America to emerging markets such as China, with global tennis participants expected to exceed 106 million by 2024, a 21.6% increase from 2021 [3][9]. - China's tennis market is projected to reach 36.75 billion yuan in 2024 and grow to 62.49 billion yuan by 2029, with participant numbers expected to rise from 23.61 million in 2024 to over 30 million by 2029 [15][56]. Summary by Sections Global Tennis Market Restructuring - The global tennis market is witnessing a surge in participation, with China ranking second in participant numbers and court availability [9][15]. - Major tennis events are well-established, managed by organizations like ITF, WTA, and ATP, contributing to the sport's growth [14]. Tennis Footwear and Apparel Market - The competition landscape in China's tennis footwear and apparel market is evolving, with international brands like NIKE and ADIDAS entering, alongside local brands innovating to capture market share [31][33]. - In 2023, sales of tennis apparel (including footwear) in China reached approximately 1.51 billion yuan, accounting for 56% of the overall tennis product market [33]. Investment Recommendations - The analysis suggests focusing on high-potential tennis footwear brands and related sectors, including manufacturing, sales, media, and training services, which are all experiencing rapid growth [56]. - Key investment targets include Anta Sports and Amer Sports, which are well-positioned to benefit from the expanding market [57][58].