Goldman Sachs: Mainland sporting goods stocks outperformed expectations in the first half of the year to guide trend differentiation preferences for Anta Sports (02020)

The Zhitong Finance App learned that Goldman Sachs released a research report saying that the first-half results announced by the sporting goods brands and distributors covered were better than the market's concerns. Industry demand was divided, profit margins were under pressure, and there were mixed trends in the second half of the year. Anta Sports (02020) core net profit beat expectations and maintained full-year guidance; Li Ning (02331) net profit was better than market expectations; Tep International (01368)'s net profit slightly beat expectations, but sales guidance for the whole year was lowered. The bank also met with Li Ning, Anta, TEP, Baosheng International (03813) and Asics management during the Asian Leaders Meeting from August 31 to September 2 to summarize the performance period and meeting highlights.

The bank expects that in the context of rapidly changing consumer environments, demand for sportswear in China will continue to grow in the second half of the year, but fluctuate greatly. Industry growth is increasingly fragmented, with high-end and specialty brands leading the way, but market concerns about the slowdown are increasing. In terms of channels, online sales continue to outperform, and offline traffic is shifting from traditional street stores to shopping malls and outlets (special price markets), driving brands to strengthen online operations and optimize offline store portfolios to more efficient positions. Discounting pressure is expected to continue, and Nike may clean up channels or deepen industry discounts in the short term, especially during the Double Eleven period, due to weak sales trends since the third quarter; however, its long-term high-end strategy may help restore industry pricing discipline. Although overseas expansion has been highlighted by leading domestic brands, short-term contributions are expected to be limited. In terms of cost, discount pressure varies depending on category positioning and channel strategy. Under procurement lockdown and supply chain mitigation measures, the impact of raw material cost inflation on FY2026 is limited. FY2027 cost pressure is still worth paying attention to but should be manageable. In terms of operating expenses, the bank believes that due to continued investment in the Chinese Olympic Committee and cooperation with Stephen Curry, advertising and promotion expenses are expected to remain high, while Anta and TEP are relatively self-regulated; however, if revenue recovery falls short of expectations, operating deleveraging will be a risk for brands that are growing slowly.

The industry expects China's sportswear consumption to increase in units between 2026 and 28. The bank continues to prefer Anta, which gives it a “buy” rating due to its multi-brand strategy, differentiated category positioning and steady execution. Despite this, Li Ning may have catalysts in the short term, including Stephen Curry's trip to China (September 9 to 14) and the Asian Games (September 19 to October 4), which may help drive the brand's momentum. In the sporting goods/apparel value chain, the bank continues to prefer sports brands over OEMs and distributors.