CICC has reiterated its Outperform rating on ANTA SPORTS (02020) with an unchanged target price of HK$110.91. The firm's earnings per share (EPS) forecasts for 2026 and 2027 remain at RMB 4.99 and RMB 5.38, respectively. At the current share price, this implies a price-to-earnings (P/E) ratio of 15 times for 2026 and 14 times for 2027. The target price corresponds to P/E multiples of 20 times for 2026 and 18 times for 2027, suggesting a potential upside of 34%.

Key points from the report are as follows:

ANTA's first-quarter 2026 performance exceeded market expectations. Benefiting from positive seasonal effects during the Chinese New Year period, the group leveraged its multi-brand strategy and strong operational capabilities, with all brands delivering growth that surpassed expectations.

The FILA brand, focusing on product efficiency, event marketing, and channel enhancements, achieved low-teens percentage growth in sell-through during Q1 2026, despite a high base of comparison. This marks a return to double-digit growth since 2024. Offline core products saw mid-single-digit growth, while FILA KIDS and FUSION achieved low-teens growth. Online channels also recorded low-teens growth. Under the ONE FILA strategy, operational efficiency continued to improve, with discounts remaining stable year-on-year and the inventory-to-sales ratio declining by 0.5 times to below 5 times.

The ANTA brand demonstrated operational resilience amid intense industry competition. Sell-through for the brand increased by a high-single-digit percentage during the quarter, reversing the decline seen in the previous quarter. Offline core products and children's wear grew by mid-to-high single digits, while online sales rose by mid-teens. Alongside the recovery in growth momentum, ANTA maintained high-quality growth, with both offline and online discounts stable year-on-year and the inventory-to-sales ratio remaining below 5 times.

Other brands, represented by DESCENTE and KOLON, continued their rapid growth. DESCENTE's sell-through increased by over 30%, exceeding management's expectations, while KOLON achieved approximately 50% growth on a base exceeding RMB 6 billion. Both brands maintained retail discounts at over 90% of the original price across online and offline channels, with inventory-to-sales ratios of 5 times and below 4 times, respectively, indicating high operational quality. Additionally, MAIA ACTIVITY reported sell-through growth of 30-35%.

The group has ample global talent resources and effective resource allocation. In mid-January, the group appointed Sven Radtke, who has over 13 years of experience at Amer Sports, as Chief Commercial Officer of Jack Wolfskin. This reflects the group's strong capability in management resource allocation and brand support. It is believed that Jack Wolfskin will continue to benefit from the group's high-quality channel and brand operational resources, enabling rapid expansion in prime locations and strengthening consumer recognition.

Potential risks include a weaker-than-expected retail environment, increased industry competition, and fluctuations in raw material prices.