CICC has released a research report, maintaining its earnings per share forecasts for ANTA SPORTS (02020) at RMB 4.98 and RMB 5.37 for 2026 and 2027, respectively. At the current share price, this corresponds to a forward price-to-earnings ratio of 13 times for 2026 and 12 times for 2027. The firm reiterates its 'Outperform' industry rating and target price of HK$110.91, which implies 20 and 18 times the projected 2026 and 2027 earnings, suggesting a potential upside of approximately 50%.

In the second quarter of 2026, the retail sales value for the ANTA brand grew by a low single-digit percentage year-on-year, while FILA also achieved a low single-digit percentage increase. Other brands, excluding those newly added after early 2025, collectively grew by 25-30%.

Key Observations from the Report

The ANTA brand and FILA have demonstrated operational resilience, while the mid-to-high-end brand portfolio continues its rapid growth trajectory. The ANTA brand achieved steady growth against market headwinds, posting a low single-digit percentage year-on-year increase in retail sales value for Q2 2026 despite unfavorable weather conditions and intense competition. Online channels benefited from targeted 618 marketing campaigns and new product launches, recording a low double-digit percentage growth that outperformed the industry average. Regarding discounts, the offline discount for the mainline brand remained flat year-on-year at 28% off, while the online discount deepened by 2 percentage points to slightly below 50% off. The inventory-to-sales ratio for the ANTA brand stood at 5x by the end of Q2 2026, unchanged from the previous year.

FILA, focusing on product efficiency and targeted consumer segment operations, showed growth resilience with a low single-digit percentage year-on-year increase in retail sales value for Q2 2026. Amid weather and retail volatility, the FUSION line grew by a mid-single-digit percentage, primarily due to a product mix better suited to weather changes. Online sales grew by a low double-digit percentage. The offline discount for the mainline brand deepened by 1 percentage point to 27% off, while the online discount remained flat year-on-year at around 40% off. The inventory-to-sales ratio improved by 0.3x year-on-year to below 5x.

The other brands sustained a trend of high-quality, rapid growth. In Q2 2026, Descente's retail sales value grew over 20% year-on-year. Despite a high base, it maintained strong performance through a continuously enhanced professional image, product innovation, and channel upgrades. Kolon's retail sales value surged over 40%, with all-channel discounts maintained above 10% off. Maia Active's retail sales value grew over 25%, with offline sales increasing more than 35% year-on-year—surpassing online sales for the first time—driven by ongoing channel upgrades and new product releases. The integration of Jack Wolfskin is progressing positively, with management expecting new stores and products to launch in key Chinese cities in Q4 2026.

Performance Outlook for the First Half

For the first half of 2026, the group's performance is expected to continue outperforming the industry. Revenue is projected to grow by a mid-teens percentage year-on-year, with net profit attributable to shareholders increasing by a high single-digit percentage. Excluding the consolidation impact of Jack Wolfskin, revenue growth is estimated at a low double-digit percentage, with net profit growth slightly outpacing revenue growth.

Potential Risks Identified

Key risks highlighted include a potential downturn in end-consumer retail demand, intensifying industry competition, and slower-than-expected brand enhancement.