Daiwa has released a research report, upgrading its rating on ANTA SPORTS (02020) from "Outperform" to "Buy." The target price has been raised from HK$88 to HK$92, with the firm designating it as the top pick in China's sportswear sector. Daiwa believes the valuation pullback and temporary profit decline present a favorable entry opportunity.

The report notes that the Chinese sportswear industry faced challenges in the second quarter of 2026, with consumer demand cooling after the Lunar New Year, unfavorable weather conditions, and a tepid performance during the 618 shopping festival. This led to a slowdown in industry retail sales compared to the first quarter, with visibility remaining low for the second half.

However, Daiwa also points out that ANTA has demonstrated robust execution capabilities. Its multi-brand portfolio continues to gain market share across mass to premium segments, and its global expansion is still in its early stages.

Daiwa forecasts ANTA's sales to grow by 9% in 2026, with the ANTA brand, FILA, and other brands expected to grow by 3%, 6%, and 25%, respectively. Gross margin is predicted to remain largely stable, as pressure from raw material costs and discounts is offset by faster growth from higher-margin brands. Full-year net profit is projected to increase by 4%, with the growth rate potentially accelerating to 14% in 2027.