Core Viewpoint - Anta Sports has demonstrated resilience in a challenging retail environment, achieving positive growth in its core brands while other competitors face declines [1][2][4] Group 1: Company Performance - Anta and FILA brands achieved low single-digit positive growth in retail sales, while other brands (excluding those added after January 1, 2024) saw retail sales increase by 45%-50% year-on-year [1] - The company maintained stable discount rates for Anta and FILA brands, ensuring a healthy inventory turnover ratio, reflecting a focus on brand value and profitability rather than just scale [2][3] - The introduction of new products, such as the PG7 series and C202 marathon shoes, has driven sales growth in high-end performance categories, showcasing Anta's effective product strategy [3] Group 2: Market Trends - The overall retail growth in the apparel and footwear sector has slowed, with the sportswear segment facing increased competition and pressure, leading to a general market weakness [1][4] - International brands, including Nike, are experiencing revenue declines in the Greater China region, highlighting the contrasting performance of Anta in the same market [2] - The sportswear market is shifting from scale expansion to quality improvement, with Anta's multi-brand strategy proving effective in navigating market fluctuations [5] Group 3: Future Outlook - Anta's growth logic remains sustainable, with increasing penetration rates in outdoor and running categories, supported by a comprehensive multi-brand and pricing strategy [4] - The company is well-positioned to capitalize on the ongoing trends in the sportswear industry, with a focus on innovation and global brand integration [4][5] - Anta's strong performance in e-commerce platforms, particularly during the Double Eleven shopping festival, indicates robust competitive strength across its brand portfolio [5]

Core Insights - Anta Sports reported positive growth in retail sales for both Anta and FILA brands, with other brands experiencing a significant increase of 45%-50% year-on-year [1] - The sports apparel industry faced challenges in Q3 2025, with a general slowdown in retail sales growth, particularly in the clothing and footwear categories [1] - Anta Sports maintained a strong market position through a well-defined brand matrix and precise category strategies, outperforming industry averages [1][2] Industry Overview - The overall retail sales growth in Q3 2025 slowed compared to Q2, with the apparel and footwear sector showing only low single-digit growth, indicating market pressures [1] - The sports segment saw a divergence in performance, with sports apparel outperforming sports footwear, particularly in running shoes, while basketball and skate shoes faced ongoing challenges [1][2] Company Performance - Anta Sports' ability to sustain solid fundamentals in a weak consumer environment is attributed to its unique business model focused on "brand + retail" and its multi-brand management capabilities [2] - The company successfully maintained stable discount rates for Anta and FILA brands while keeping inventory levels healthy, reflecting a strategic focus on brand value and profitability [2] Product Strategy - Anta has focused on a core strategy of "mass positioning, professional breakthroughs, and brand elevation," successfully capturing market share with innovative products like the PG7 series and C202 marathon shoes [3] - FILA has shown resilience in the high-end sports fashion market, launching a tennis strategy and innovative products that have performed well despite market challenges [3] Growth Drivers - Other brand segments within Anta Sports have continued to grow rapidly, indicating successful positioning in high-end outdoor and professional sports categories [4] - The company’s growth logic remains sustainable, with increasing penetration in outdoor and running categories, supported by a comprehensive multi-brand strategy [4] Market Positioning - Anta Sports brands have demonstrated strong competitive performance in the market, with FILA leading in sales on platforms like Tmall and Douyin, and Anta also ranking highly [5] - The transition in the sports apparel industry from "scale expansion" to "quality improvement" has been effectively navigated by Anta Sports, establishing a unique competitive moat [5]

Investment Rating - The investment rating for the company is "Outperform the Market" [5][40]. Core Views - The company is expected to achieve double-digit growth in both revenue and core profit in the first half of 2025, driven by its brand matrix [1][7]. - The management remains confident in the company's development and has updated the guidance for 2025, indicating continued growth potential [3][37]. - The acquisition of JACK WOLFSKIN is expected to enhance the outdoor brand matrix and contribute positively to future growth [30]. Revenue and Profitability - In the first half of 2025, the company's revenue increased by 14.3% year-on-year to 38.54 billion RMB, while the net profit attributable to shareholders rose by 14.5% to 7.03 billion RMB [1][7]. - The revenue breakdown by brand shows Anta at 16.95 billion RMB (up 5.4%), FILA at 14.18 billion RMB (up 8.6%), and other brands at 7.41 billion RMB (up 61.1%) [2][7]. - The overall gross margin decreased by 0.7 percentage points to 63.4%, while the operating profit margin improved by 0.6 percentage points to 26.3% due to effective cost control [1][8]. Brand Performance - Anta brand's revenue growth is attributed to refined operations and a push for globalization, with a gross margin of 54.9% [25]. - FILA brand focuses on high-end sports fashion and professional breakthroughs, achieving a revenue of 14.18 billion RMB with a gross margin of 68.0% [29]. - Other brands, including DESCENTE and KOLON SPORT, saw significant growth, with a revenue increase of 61.1% and a gross margin of 73.9% [30]. Financial Forecasts - The company forecasts net profits of 13.48 billion RMB, 15.46 billion RMB, and 17.36 billion RMB for 2025, 2026, and 2027 respectively, with corresponding growth rates of 13.0%, 14.6%, and 12.3% [3][40]. - The reasonable valuation has been adjusted to 119-124 HKD, corresponding to a PE ratio of 23-24x for 2025 [3][40]. Cash Flow and Financial Health - The net cash position is reported at 31.54 billion RMB, indicating a strong financial condition [1][22]. - The company declared an interim dividend of 1.37 HKD per share, with a payout ratio of 50.2% [1][22].