Company Performance - Anta brand's retail revenue decreased slightly in low single digits year-on-year in Q4 2025, while FILA brand's revenue increased in low single digits [1] - Other brands (excluding new brands added after early 2024) achieved a revenue growth of 35-40% year-on-year in Q4 2025, demonstrating strong performance [2] - The company maintained a stable offline discount rate at 71% and an online discount rate reduced by 2 percentage points to 50% year-on-year, with a slight increase in inventory turnover ratio above 5x at the end of the quarter [1] Brand Insights - FILA brand focused on experience upgrades and brand expression, with retail revenue growth in low single digits in Q4 2025, and significant online performance in categories like down jackets and dad shoes [1] - Descente brand achieved a revenue growth of 25-30% year-on-year, becoming the third brand in the group to reach a revenue of 10 billion [2] - Kolon Sport brand saw a revenue increase of 50-55%, indicating continued brand momentum [2] Future Outlook - The company aims for high-quality growth and healthy inventory and discount management in 2026, with several major events planned [2] - The management plans to continue investing in long-term brand development, although short-term operating profit margin may face some pressure [2] Earnings Forecast and Valuation - The EPS forecast for 2025 is maintained at 4.71 yuan, while the 2026 forecast is adjusted down by 4.5% to 5.03 yuan, with a new forecast for 2027 at 5.45 yuan [2] - The target price is adjusted down by 4% to 110.91 HKD, corresponding to a 20x P/E for 2026, indicating a potential upside of 34% [2]

Investment Rating - The report maintains an "Outperform" rating for ANTA Sports [2][5] Core Insights - ANTA Brand experienced its first low-single-digit negative sell-through growth in 4Q25 after 11 consecutive quarters of positive growth, with offline sales declining and the children's category being a significant drag, although it still achieved a full-year low-single-digit growth target [3][10] - FILA Brand achieved mid-single-digit sell-through growth in both 4Q25 and for the full year 2025, with discounts deepening year-on-year and quarter-on-quarter [3][10] - Management is cautious about 2026, planning increased investment in brand and marketing due to major sporting events such as the Milan Winter Olympics, World Cup, and Asian Games [3][10] Financial Summary - Revenue projections for ANTA Sports from 2025 to 2027 are RMB 78.26 billion, RMB 85.00 billion, and RMB 92.04 billion, representing year-on-year growth of 10.5%, 8.6%, and 8.3% respectively [5][12] - Net profit attributable to parent shareholders is projected at RMB 12.98 billion, RMB 14.34 billion, and RMB 16.24 billion for the same years, with year-on-year changes of -13.1%, 14.6%, and 13.8% respectively [5][12] - The corresponding P/E ratios for 2025 to 2027 are 16.0x, 14.5x, and 12.8x [5][12] Brand Strategy - ANTA Brand will focus on core positioning in running, training, and basketball, with continuous technology iterations for its running series [4][11] - FILA continues to emphasize product quality, achieving top sales in categories like down jackets and dad shoes during major sales events [4][11] - Descente has entered a steady growth phase, with over 240 stores and a stable store network, while KOLON's growth is driven by core stores and community activities [4][11]