Nomura uses adidas' 2Q26 results to assess competition in China's sportswear market and continues to favor ANTA

Overview

This report uses adidas' 2Q26 results as a starting point for a read-across analysis of China's sportswear sector. adidas delivered solid overall revenue growth, but operating profit fell short of market expectations, primarily due to increased sales and brand investment; meanwhile, growth in its core footwear business slowed. Despite this, adidas achieved 15% year-on-year sales growth in Greater China, indicating continued share gains in the Chinese market. Nomura believes that, amid subdued consumer sentiment and strong competition from international brands, ANTA remains the preferred sector pick given its exposure to long-term structural growth and attractive valuation.

Core views

The core views are: first, adidas continues to improve its localized product design and channel operation capabilities in China and maintains competitive advantages in key categories such as running and sports leisure; second, share gains by international brands such as adidas have intensified competition in China's sportswear industry; third, ANTA remains more attractive as an investment because it benefits from long-term structural growth opportunities in running and outdoor activities, while its current valuation is relatively attractive.

Analysis framework

The report combines earnings read-across with channel verification: it first breaks down adidas' 2Q26 performance by revenue, profit, region, category, and channel, then incorporates expert channel research on China's sportswear industry conducted in June to assess the quality of its growth and competitive impact in China, and finally maps the findings to ANTA's investment rating, valuation, and risks.

Methodology notes

• Earnings read-acrossRead-across from adidas' 2Q26 results to China's sportswear sector

  Assessing the competitive landscape in China through the regional and category performance of global sports brands

  adidas' sales growth in Greater China, footwear growth, and DTC and wholesale channel performance are used to assess changes in international brands' market share in China and their impact on domestic leaders such as ANTA.

• Channel researchExpert channel check

  Using industry expert feedback to validate company-reported trends

  Nomura cites channel research conducted in June, stating that adidas achieved mid-to-high teens year-on-year growth in Mainland China in 2Q26, broadly consistent with the company's reported 15% growth in Greater China.

• Valuation methodologyF12M P/E multiple valuation

  Determining the target price using the forward 12-month price-to-earnings ratio

  ANTA's target price of HKD89.9 is based on 17.5x F12M P/E, reflecting the company's leading position and stable growth trajectory in China's sportswear industry.

Asset mapping & comparison

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

• ANTA Sports Products (2020 HK)

  The report's preferred pick; maintains a Buy rating with a target price of HKD89.9.

  Strengths

  Benefits from structural growth opportunities in running and outdoor activities, holds a leading position in China's sportswear industry, and has an attractive valuation.

  Weaknesses

  Operates in a market environment characterized by weak consumer sentiment and intense competition from international and domestic brands.

  Comparison

  Compared with international brands such as adidas, ANTA's investment appeal comes from its leading domestic position, long-term growth exposure, and valuation; however, adidas' improving localization and channel execution in China provide a competitive reference.

  Risks

  Intensifying competition, sales growth below expectations, and weaker-than-expected macroeconomic momentum.

• adidas (ADS GR)

  Earnings read-across subject; unrated.

  Strengths

  Still achieved 15% year-on-year growth in Greater China in 2Q26, has competitive advantages in key categories such as running and sports leisure, and has improved its localized product design and channel operations.

  Weaknesses

  2Q26 operating profit was below expectations, operating margin was weighed down by brand and sales investment, and core footwear growth slowed.

  Comparison

  adidas' continued share gains in China create competitive pressure for Chinese sportswear brands such as ANTA.

  Risks

  Weak Chinese consumer sentiment, slowing footwear growth, and uncertainty over the effectiveness of channel strategy adjustments.

• Nike (NKE US)

  Competitive reference; unrated.

  Strengths

  Strong global sports brand influence.

  Weaknesses

  Recently adjusted its online DTC strategy in China, while management believes that adjustments to the wholesale channel will take more time to yield results.

  Comparison

  adidas management believes the short-term impact of Nike's channel adjustments in China remains uncertain.

  Risks

  Uncertainty over the effectiveness of adjustments to online DTC and wholesale channels.

Key data

• adidas 2Q26 revenueEUR6.7bn, +14% year on yearSlightly above the Bloomberg consensus of EUR6.6bn.
• adidas 2Q26 operating profitEUR574mn, +5% year on yearBelow the Bloomberg consensus of EUR616mn; operating margin fell 0.7 percentage points year on year to 8.5%.
• adidas Greater China 2Q26 sales growth+15% year on yearSlightly slower than the +17% growth in 1Q26 and below the Bloomberg consensus of approximately 15.8%.
• adidas 2Q26 category growthFootwear +1%, apparel +35%, accessories +20%Footwear growth slowed further from +4% in 1Q26.
• adidas 2Q26 channel growthOffline DTC retail +23%, online +27%, wholesale +6%DTC channel growth was significantly faster than wholesale channel growth.
• adidas FY2026E revenue guidance+9% to +10% year on yearRaised from the previous guidance for high-single-digit growth.
• ANTA target price and ratingBuy, target price HKD89.9Based on 17.5x F12M P/E; current price HKD78.95.

Impact & implications

In terms of investment implications, adidas' continued share gains in China indicate that competition from international brands remains strong, creating ongoing pressure on domestic sportswear companies at the brand, product, and channel levels. However, Nomura believes ANTA's exposure to long-term structural growth, leading position, and valuation continue to support the Buy thesis. In the near term, investors should monitor consumer sentiment, intensifying competition, and the delivery of sales growth.

Risks

• Competition from domestic and global sports brands intensifies further.
• ANTA's sales growth falls short of expectations.
• China's macroeconomy and consumer sentiment are weaker than expected.
• International brands such as adidas continue to gain market share in China, potentially constraining the growth space of domestic brands.
• Slowing footwear category growth may reflect weakness in some core sports demand.

What to watch

• Whether adidas' Greater China sales growth continues to slow or maintains double-digit growth in subsequent quarters.
• The delivery of growth in ANTA's running, outdoor, and sports leisure categories.
• Changes in promotions, inventory, and channel discounts in China's sportswear industry.
• The actual effects of Nike's online DTC and wholesale channel adjustments in China.
• Whether ANTA's valuation multiple remains near Nomura's target assumption of 17.5x F12M P/E.