Maintain Overweight on Anta Sports; still the top pick in China's sportswear sector

Overview

This is a J.P. Morgan conference takeaways report on Anta Sports (2020.HK) following the Global China Summit 2026. The core view is that Anta management has kept its 2026 operating guidance unchanged; despite a cautious 2Q outlook, its brand matrix, inventory and discount discipline, overseas expansion, and M&A integration capabilities continue to support its status as a top pick in China's sportswear sector.

Core views

The report maintains an Overweight rating on Anta Sports and a Dec-26 target price of HK$130. J.P. Morgan believes Anta is China's largest domestic sportswear company, with about 22% market share in 2025; against intensifying competition, its multi-brand portfolio has executed well, and its overseas expansion potential is superior to peers. In the short term, retail uncertainty remains in 2Q, but signs of recovery have appeared since May; in the medium term, key growth drivers include core Anta's channel reform, Fila's stable margins, high growth at Descente/Kolon, Jack Wolfskin's revival, and potential cooperation with Puma.

Analysis framework

The report forms its investment view based on management meeting feedback, brand operating guidance, retail sales performance, channel and inventory conditions, overseas expansion plans, and a DCF valuation framework. The valuation section uses a DCF method to derive a Dec-26 target price of HK$130, with about 23x 12-month forward P/E used as a cross-check.

Methodology notes

• Valuation MethodDCF

  Discounted cash flow valuation

  The report uses DCF to derive a Dec-26 target price of HK$130, assuming WACC of 11.8%, a risk-free rate of 4.9%, a risk premium of 7.0%, cost of equity of 14.6%, and a terminal growth rate of 3.0%.

• Fundamental ResearchManagement Meeting Takeaways

  Global China Summit management communication

  The report is mainly based on communication with Anta management at the Global China Summit, focusing on validating 2026 guidance, 2Q retail trends, brand strategy, channel reform, overseas expansion, and M&A progress.

• Operating AnalysisMulti-brand Portfolio Analysis

  Brand matrix and tiered growth

  The report separately assesses growth, margins, channel expansion, and integration risks for core Anta, Fila, Descente/Kolon, Jack Wolfskin, and the potential Puma acquisition.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Anta Sports Products Ltd (2020.HK)

  Coverage target / Hong Kong-listed equity

  Strengths

  China's largest domestic sportswear company, with about 22% market share in 2025; strong execution of its multi-brand portfolio, maintained 2026 guidance, and overseas expansion potential superior to peers.

  Weaknesses

  2Q expectations are relatively cautious, core Anta was below internal targets in April, and intensified competition, M&A integration, and rising raw material costs may still affect profit delivery.

  Comparison

  The core Anta brand had about 11% China market share in 2025, below Nike's 13%; its long-term goal is to become China's No.1 sportswear brand.

  Risks

  Fila growth below expectations, a downturn in the retail environment, intensified competition, failure to integrate acquired businesses, and raw material costs above expectations.

• Fila

  Core brand

  Strengths

  April retail performance met expectations, with 2026 retail sales growth targeted at mid-single digits and OPM at about 25%.

  Weaknesses

  The report lists underperformance in Fila as one of the main downside risks, indicating its profit contribution and growth stability are important to group valuation.

  Comparison

  Compared with newer high-growth brands, Fila is more of a mature profit core, with a margin target higher than core Anta.

  Risks

  Weaker consumer sentiment or an unfavorable product cycle could cause Fila to underperform expectations.

• Descente/Kolon

  High-growth brand portfolio

  Strengths

  April performance beat expectations, with Kolon online GMV at about +50%; 2026 retail sales growth is targeted at over 20%, driven mainly by same-store sales growth.

  Weaknesses

  Store expansion is limited and mainly concentrated in core malls in top-tier cities, so growth depends more on same-store performance and category expansion.

  Comparison

  Compared with core Anta and Fila, Descente/Kolon has a higher growth target, but scale and channel coverage are still in the expansion stage.

  Risks

  A slowdown in same-store growth, limited room for expansion in core malls, or weaker-than-expected new category expansion.

• Jack Wolfskin

  Brand revival plan

  Strengths

  The five-year brand revival plan is progressing as scheduled, logistics costs in China are down 40%-45%, and the company plans to open new flagship stores in Beijing, Xi'an, and Changchun, while launching a new brand image and new products.

  Weaknesses

  It is still in the early stage of revival and is expected to remain loss-making in 2026, although the impact at the group level is limited.

  Comparison

  The China market is expected to contribute profit in 2027, while the Europe market is expected to contribute profit in 2028, implying a slower recovery pace than mature brands.

  Risks

  Slower-than-expected progress in new stores, new products, and a return to multi-brand stores in Europe could delay the turnaround.

• Puma

  Proposed acquisition / partner brand

  Strengths

  If the deal closes in 4Q26, Anta can use its supply chain, channels, and multi-brand operating capabilities to drive Puma's brand repositioning, starting with the China market as the basis for cooperation.

  Weaknesses

  Puma's market share in China is below 2%, brand revival will take time, and the deal still requires regulatory approval.

  Comparison

  Compared with Anta's existing brands, Puma has a low base in the China market but greater potential for recovery.

  Risks

  There is uncertainty around regulatory approval, deal timing, brand integration, and delivery of synergies.

Key data

• Current share priceHK$75.15 (22 May 26)2020.HK price disclosed on the report front page.
• Target priceHK$130.00 (Dec-26)Based on DCF valuation, implying about 23x 12-month forward P/E.
• Implied upsideabout 73%Estimated based on the HK$130 target price versus the current price of HK$75.15.
• Core Anta 2026 guidanceLow single-digit retail sales growth, OPM about 20%Management maintained full-year guidance.
• Fila 2026 guidanceMid-single-digit retail sales growth, OPM about 25%April performance was in line with expectations.
• Other brands 2026 guidanceRetail sales growth of more than 20%, OPM above 25%Mainly includes brands such as Descente and Kolon.
• Anta Group China market shareabout 22% in 2025The report cites Euromonitor, calling Anta the largest domestic sportswear company in China.
• Core Anta brand market shareabout 11% in 2025, versus Nike at about 13%Core Anta's long-term goal is to become the No.1 sportswear brand in China.
• Southeast Asia POS targetabout 1,000 by 2028, versus about 500 currentlyPart of core Anta's overseas expansion plan.
• Kolon online GMVabout +50% in AprilThe report says Descente/Kolon outperformed expectations in April.
• Jack Wolfskin efficiency improvementLogistics costs down 40%-45%Operating efficiency in the China market improved, with further progress expected to show in 4Q26.
• Raw material cost pressureIf prices stay elevated, footwear COGS may rise 3%-5% in 2027Anta believes the impact can be managed through supply chain sharing, strategic pricing, and higher gross margins.

Impact & implications

The investment implication is positive overall: in the short term, Anta needs to digest 2Q retail uncertainty and expected cost inflation, but its brand matrix and channel reform provide high visibility on earnings delivery; in the medium term, if overseas expansion, Jack Wolfskin's turnaround, and potential Puma integration progress smoothly, they may strengthen its growth and valuation premium relative to peers.

Risks

• Fila business growth is slower than expected.
• Competition in China's sportswear sector intensifies further.
• Integration of acquired brands or the potential Puma transaction is unsuccessful.
• The retail environment deteriorates significantly, affecting foot traffic, conversion rates, and same-store sales.
• Raw material costs are higher than expected, especially as footwear COGS may rise 3%-5% in 2027.
• Jack Wolfskin's revival plan or profitability improvement at emerging brands is later than expected.
• The Puma transaction requires regulatory approval, and there is uncertainty around completion timing and synergy delivery.

What to watch

• Whether 2Q retail performance continues to recover from the divergence seen in April, especially foot traffic and conversion rates at core Anta.
• Delivery of full-year 2026 guidance, including sales growth and OPM for core Anta, Fila, and other brands.
• Whether discount discipline and inventory health are maintained.
• Progress of core Anta's Lighthouse project, online channels, and franchise channel reform.
• The execution pace of expanding Southeast Asia POS from about 500 currently to about 1,000 by 2028, as well as exploration of new markets such as Australia, New Zealand, and India.
• Expansion in Descente women's wear, footwear, and kidswear, as well as performance of Kolon's spring/summer and hard-core outdoor collections.
• Progress of Jack Wolfskin's new flagship stores, new brand image, and new product launches in 4Q26, as well as the profitability inflection point in the China market in 2027.
• Approval of the Puma transaction, progress toward 4Q26 completion, and the cooperation plan for the China market.
• Raw material price trends in 2027, and Anta's ability to absorb cost pressure through supply chain sharing, pricing, and gross margin management.
• The impact of no buyback plan in 2026 and a 50% payout ratio on capital allocation and investor expectations.