CICC released a research report maintaining its EPS forecasts for ANTA SPORTS (02020) at RMB4.82/5.47 for FY2025/26. The current share price corresponds to 19x/17x P/E ratios for FY2025/26. The firm maintains its Outperform rating and target price of HK$120.92, representing 23x/20x P/E ratios for FY2025/26, with 19% upside potential.

CICC's main viewpoints are as follows:

**1H FY25 Results Exceeded Expectations**

The company reported 1H FY25 results with revenue growing 14% year-on-year to RMB38.5 billion. Profit attributable to shareholders (excluding Amer listing gains) increased 14.5% year-on-year to RMB7.03 billion, outperforming expectations mainly due to strong growth from other brands and increased government subsidies. The company declared an interim dividend of HK$1.37 per share, representing approximately 50% payout ratio.

**FILA and Other Brands Delivered Strong Performance**

In 1H FY25, ANTA's main brand continued focusing on mass professional sports, with revenue growing 5.4% year-on-year. ANTA's professional product IP matrix performed excellently, with PG7 series sales exceeding 2 million pairs in 1H FY25. In terms of channels, ANTA's Champion stores, flagship stores, and Super ANTA formats all performed well in 1H FY25.

FILA revenue grew 8.6% year-on-year against market trends in 1H FY25, strategically focusing on premium sports fashion positioning and carefully exploring growth opportunities in sub-categories, with golf and tennis categories performing exceptionally. FILA also excelled in online channels with double-digit growth in 1H FY25, becoming an important driver of brand growth.

Other brands revenue surged 61.1% year-on-year, with Descente and KOLON continuing to excel in their respective niche vertical segments.

**Excellent Operational Efficiency with Continued Operating Margin Improvement**

On the expense side, 1H FY24's Olympic-related expenses created a high base, leading to a 0.9 percentage point year-on-year decrease in advertising expense ratio to 6.6% in 1H FY25. Meanwhile, the company increased terminal retail staff compensation budgets, with employee cost ratio rising 0.2 percentage points year-on-year to 15.7%. R&D expense ratio remained stable. Due to effective expense management and increased government subsidies received in 1H FY25, the company's operating margin improved 0.6 percentage points year-on-year to 26.3%.

**Amer Achieved Significant Turnaround**

During the period, the company's consolidation of Amer shifted from a loss of RMB20 million in 1H FY24 to contributing RMB430 million in profit. Arc'teryx continued its high growth globally, while the strong growth of Salomon and Wilson once again demonstrated ANTA Group's brand-building capabilities.

**Development Outlook**

Due to continued volatility in the retail environment, the company adjusted its full-year guidance for ANTA brand to mid-single-digit growth. Given the strong momentum of other brands, the company raised its full-year growth guidance for other brands from 30% to 40%. FILA maintains its full-year mid-single-digit growth guidance.

Additionally, the company announced the establishment of a joint venture with South Korea's largest fashion platform MUSINSA in China and Hong Kong/Macau regions, with the company holding a 40% stake in the joint venture. This is viewed as a beneficial attempt to explore the integration of sports and fashion.