Citi has issued a research report noting that Nike recently held its first-quarter earnings call for fiscal year 2027.
The company expects to conduct a large-scale buyback of China channel inventory over the next three quarters, with year-on-year sales declines in the China market projected to widen from September this year through May next year, compared to a 26% drop in July and August this year.
Nike also announced the merger of its Greater China and Asia-Pacific businesses into a new operating region called APGC, signaling a strategy of downplaying its China market operating structure, which may help ease investor concerns that Nike will drive the industry to launch aggressive price wars during Singles' Day.
Citi expects that ANTA Sports Products Ltd. (ANTA SPORTS) (02020) and Li Ning Co., Ltd. (LI NING) (02331) will be able to capture market share from Nike, and holds a positive view on ANTA's potential integration of Puma's China retail and distribution business in 2027.
Citi maintains a "Buy" rating on both ANTA and Li Ning, with a preference for ANTA.