Citigroup has issued a research report stating it is closing its short-term view on ANTA SPORTS (02020) and LI NING (02331) and initiating a 30-day positive catalyst watch.

The primary catalyst is the potential for ANTA and LI NING to capture market share from Nike in China, which is expected to generate positive market sentiment.

According to an announcement from TOPSPORTS (06110) and Nike's own website, Nike will terminate most of its online distribution business with Chinese retailers starting January 2027, shifting towards a direct-to-consumer online strategy.

This move is anticipated to lead to a loss of market share for Nike in China in the coming years, creating a positive impact for domestic and competing brands.

The firm reiterated its relative preference order for Chinese sportswear stocks, listing ANTA first, followed by LI NING and then TOPSPORTS.

ANTA and LI NING are also included among the bank's top 10 large-cap Chinese consumer stocks with attractive valuations.

Citigroup maintains its "Buy" ratings on both ANTA SPORTS and LI NING, with target prices of HK$108.8 and HK$22.8, respectively.