Guosheng Securities has released a research report indicating that as of the end of 2025, the channel inventory-to-sales ratio for major sportswear brands is generally maintained at around 4-5 months, reflecting healthy inventory quality. Since 2026, with companies advancing their marketing efforts for the Spring Festival holiday and launching new products, the firm anticipates overall stable growth momentum in the first quarter. Recommended stocks include LI NING (02331), which is expected to benefit from brand enhancement during the Olympic cycle; ANTA SPORTS (02020), recognized for its superior group operational capabilities in the sportswear sector; and XTEP INT'L (01368) and 361 DEGREES (01361) as stocks to monitor.
Key viewpoints from Guosheng Securities are as follows:
**2025 Review: Solid Fundamental Growth and Ongoing Inventory Optimization** In 2025, ANTA SPORTS reported revenue/adjusted net profit attributable to shareholders (excluding one-time gains from 2024) increasing by 13.3%/13.9% year-on-year to RMB 80.22 billion/RMB 13.59 billion. LI NING's revenue grew 3.2% year-on-year to RMB 29.60 billion. XTEP INT'L saw revenue/net profit attributable to shareholders rise by 4.2%/10.8% year-on-year to RMB 14.15 billion/RMB 1.37 billion. 361 DEGREES reported revenue/net profit attributable to shareholders increasing by 10.6%/14.0% year-on-year to RMB 11.15 billion/RMB 1.31 billion, indicating generally robust performance across the sector. From an inventory perspective, the firm judges that the channel inventory-to-sales ratio for major sportswear brands was approximately 4-5 months by the end of 2025, pointing to healthy inventory quality. Regarding valuations, the sector's overall valuation level remains around the median of the past 2-3 years. ANTA SPORTS, LI NING, XTEP INT'L, and 361 DEGREES are trading at estimated 2026 P/E ratios of 12x, 17x, 9x, and 8x, respectively. With continued policy stimulus and a recovery in consumer confidence since 2026, there remains potential for valuation expansion in the sector.
**Operational Trends Analysis: Focus on Product Enhancement, Channel Improvements, and Marketing** 1) **Product Development:** Brands are focusing on running products as a core category, leveraging advanced technology platforms to drive product iteration. LI NING launched its midsole technology "Super Capsule" in 2025, while XTEP introduced its 160X 7.0 series, aiding athletes in breaking national records. Beyond running, companies are also expanding their outdoor product matrices to broaden growth drivers. 2) **Channel Operations:** While maintaining stable store counts (by end-2025: ANTA 9,855, Fila 2,040, LI NING 7,609, XTEP 7,845, 361 DEGREES 9,011 stores), brands are promoting differentiated format innovations and improving per-store operational efficiency. ANTA's Arena flagship store achieved average monthly sales exceeding RMB 3 million. 361 DEGREES has established 127 super product stores nationwide. LI NING is exploring new store formats like Dragon stores, and XTEP INT'L is strengthening its outlet channel presence. 3) **Marketing Initiatives:** Companies are deepening their involvement in core sports categories through event sponsorships while emphasizing major event marketing at the brand level. LI NING's sponsorship of the Chinese Olympic Committee is expected to continuously enhance brand influence. ANTA's provision of professional equipment for national teams underscores its technological credentials. 361 DEGREES' continued sponsorship of the Asian Games lays a foundation for overseas expansion. XTEP INT'L continues to focus on the running segment to consolidate its competitive moat.
**2026 Outlook: Sector Demand Resilience and Company Focus on Quality and Efficiency** Demand resilience in the sector is expected to persist. The core investment thesis for companies centers on improving quality and efficiency, supported by a gradual recovery in consumer confidence and the ongoing effects of policy stimulus. Furthermore, the expansion of the sports participant base is likely to sustain consumer preference for functional apparel. Considering base effects and the pace of consumption recovery, growth in 2026 is projected to follow a pattern of starting lower and accelerating later in the year. Regarding financial performance, excluding one-time gains, the firm currently forecasts ANTA SPORTS' 2026 net profit attributable to shareholders to grow 3% to RMB 14.053 billion, projects an 8.1% decline for XTEP INT'L to RMB 1.26 billion, and anticipates an 11.1% increase for 361 DEGREES to RMB 1.46 billion.
**Risk Warning:** Potential fluctuations in the consumer environment, slower-than-expected store expansion, and delays in e-commerce business development.
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