Company Dynamics - The company reported third-quarter operating results, with Anta brand retail sales increasing by a low single-digit percentage year-on-year, FILA brand retail sales also increasing by a low single-digit percentage, while other brands (excluding new brands added after January 1, 2024) saw retail sales growth of 45-50% [1] - Despite overall retail environment fluctuations and industry destocking pressures in Q3 2025, Anta Sports' brands outperformed the industry, with Anta brand retail sales showing slight improvement compared to Q2 2025 [1] - Online channels faced challenges, but performance improved sequentially from Q2 2025 after team restructuring; offline channels, including new store formats like Arena/Palace/Champion, performed well, and the franchisee lighthouse store project progressed smoothly, indicating Anta's efforts in refined offline operations [1] FILA Brand Performance - FILA brand retail sales in Q3 2025 increased by a low single-digit percentage, with stable growth in FILA's bulk sales, while FILA Kids and FUSION faced some pressure [2] - Looking long-term, FILA aims to maintain healthy growth trends following the launch of a new tennis strategy at the end of September, leveraging top tennis resources and new product development amid the ongoing popularity of tennis [2] Other Brands Performance - Other brands experienced retail sales growth of 45-50% in Q3 2025, continuing a high growth trend, with Kolon and Descente growing approximately 70% and 30% respectively, maintaining high growth while keeping discounts shallow and opening high-quality flagship stores [2] - Operational improvements for other brands like MaiaActive and Jack Wolfskin are ongoing [2] Management Outlook - Considering the macroeconomic environment in Q4 2025, management has lowered the full-year retail sales guidance for Anta to low single-digit growth, while maintaining the growth guidance for FILA in the mid-single digits and over 40% for other brands [2] - Despite short-term pressures, confidence remains in Anta Group's multi-brand strategy and efficient management capabilities [2] Earnings Forecast and Valuation - Due to the challenging retail environment, the EPS forecasts for 2025 and 2026 have been reduced by 3% and 4% to 4.67 and 5.24 yuan respectively, with the current stock price corresponding to 17/15 times the earnings ratio [2] - The target price has been lowered by 4% to 116.11 yuan, corresponding to 23/20 times the earnings ratio for 2025/2026, indicating a 32% upside potential [2]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 117.98 [7][8]. Core Views - The company achieved a revenue of RMB 70.83 billion in 2024, representing a year-on-year growth of 13.6%, and a net profit of RMB 15.60 billion, which is a 52.4% increase year-on-year. Excluding one-time gains from AS listing and placement, the profit was RMB 11.93 billion, up 16.5% year-on-year, slightly above Bloomberg consensus expectations [1]. - The company's market share in the Chinese sports footwear and apparel market increased to 23% in 2024, maintaining its leading position in the industry. The main brands continue to perform well, and the outdoor brand has sustained high growth [1][2]. - The company has initiated a share buyback program, repurchasing a total of HKD 1.97 billion worth of shares since August 2024 [1]. Summary by Sections Revenue and Profitability - In 2024, the main brand revenue increased by 10.6% to RMB 33.52 billion, while FILA's revenue grew by 6.1% to RMB 26.63 billion. Other brands saw a significant increase of 53.7% to RMB 10.68 billion. Online revenue rose by 21.8%, accounting for 35.1% of total revenue [2]. - The gross profit margin decreased by 0.4 percentage points to 62.2%, attributed to a higher proportion of lower-margin footwear products and e-commerce business [3]. Expenses and Operational Efficiency - Advertising expenses increased by 0.8 percentage points to 9.0%, driven by increased spending on advertising, sponsorships, and store upgrades. R&D expenses rose by 0.2 percentage points to 2.8% as the company continues to invest in innovation [3]. - The company maintained a healthy inventory turnover of 123 days, with a cash flow generation capacity of RMB 13.2 billion [3]. Profit Forecast and Valuation - The net profit estimates for 2025 and 2026 have been adjusted downwards by 3.4% and 3.8% to RMB 13.36 billion and RMB 15.01 billion, respectively. A new estimate for 2027 net profit is set at RMB 16.79 billion [4]. - The target price is based on a PE ratio of 23x for 2025, reflecting the company's significant market share and multi-brand operational capabilities [4].

Investment Rating - The report maintains a "Buy" rating for Anta Sports (2020.HK) and raises the target price to HKD 118.8, indicating a potential upside of 21.3% from the current price of HKD 97.9 [2][5]. Core Insights - Despite facing significant pressure on profit margins in the short term, Anta's revenue from its main brand is expected to steadily expand, with other brands maintaining rapid growth. The contribution from Amer Sports is projected to significantly increase, supporting a high growth rate in core net profit by 2025. The multi-brand strategy is anticipated to continue driving overall revenue expansion for the company [1][7][8]. Financial Projections - Revenue is forecasted to grow from RMB 62,356 million in 2023 to RMB 78,838 million in 2025, reflecting a compound annual growth rate (CAGR) of 11.3% [9][13]. - The net profit attributable to shareholders is expected to decrease from RMB 15,596 million in 2024 to RMB 13,965 million in 2025, indicating a decline of 10.5% [9][13]. - The gross margin is projected to remain stable around 62.5% in 2025, with operating profit margin slightly declining to 23.2% [11][12]. Brand Performance - Anta's brand revenue is expected to grow at a high single-digit percentage in 2025, while Fila is projected to grow in the mid-single digits. Other brands like Descente and Kolon are anticipated to exceed 30% growth [7][8]. - The online sales channel is expected to continue to grow, contributing to the overall revenue but also leading to increased discounting pressures on margins [7][8]. Market Strategy - Anta plans to increase market investments in 2025, focusing on expanding the new retail formats, enhancing overseas market presence, and increasing product launches. The company aims for overseas revenue to account for 15% within five years [7][8]. - The multi-brand strategy is expected to be a key driver for long-term revenue growth, with Descente and Kolon brands showing strong growth momentum [7][8].

Investment Rating - The report maintains a "Buy" rating for Anta Sports (2020.HK) and raises the target price to HKD 118.8, indicating a potential upside of 21.3% from the current price of HKD 97.9 [1][2]. Core Views - Despite facing significant pressure on profit margins in the short term, Anta's revenue from its main brand is expected to steadily expand, with other brands maintaining rapid growth. The contribution from Amer Sports is anticipated to significantly increase, supporting a high growth rate in core net profit by 2025. The multi-brand strategy is expected to continue driving overall revenue expansion for the company [1][7]. Financial Projections - Revenue is projected to grow from RMB 62,356 million in 2023 to RMB 78,838 million in 2025, reflecting a compound annual growth rate (CAGR) of 11.3% [9][13]. - The net profit attributable to shareholders is expected to decrease from RMB 15,596 million in 2024 to RMB 13,965 million in 2025, indicating a decline of 10.5% [9][13]. - The gross margin is projected to remain stable around 62.5% in 2025, with operating profit margin slightly declining to 23.2% [11][13]. Brand Performance - The management anticipates that the Anta brand's revenue will grow at a high single-digit percentage in 2025, while Fila is expected to see mid-single-digit growth. Other brands like Descente and Kolon are projected to exceed 30% growth [7][15]. - The online sales channel is expected to continue driving revenue growth for Fila, which is projected to contribute 40% of its revenue in 2024, up from 35% in 2023 [7][11]. Market Strategy - Anta plans to increase market investments in 2025, focusing on expanding the new retail format (Super Anta stores), enhancing overseas market presence, and increasing sponsorship for domestic events [7][11]. - The multi-brand strategy is expected to be a key driver for long-term revenue growth, with Descente and Kolon brands contributing 15% of the group's revenue in 2024 [7][11].