Lyon: China's premium lifestyle brands bucked the trend and preferred Anta Sports (02020) and Jiangnan Cloth (03306)

The Zhitong Finance App learned that after visiting the five cities of Shenzhen, Foshan, Hangzhou, Shanghai and Chengdu from September 14 to 18, it was observed that Chinese consumption showed K-shaped differentiation, which supported the bank's view on the rise of high-quality domestic lifestyle brands, but also faced headwinds such as prudent consumer sentiment, population structure, employment, and even bad weather. The bank chose Anta Sports (02020) and Gangnam Puyi (03306), both rated “outperforming the market”.

The bank still believes that Chinese quality lifestyle brands have an opportunity to grow under macroeconomic headwinds. Brands that have high-quality products, in-depth consumer experiences, and can continue to convey unique cultural value narratives can maintain a pricing structure.

The bank pointed out that overall demand for non-essential consumers is still under pressure, but there are also highlights: macro-wealth effects have gradually improved since 2025, real estate and stock markets have picked up, and household leverage ratios have declined since 2025. However, demand for non-essential consumption has continued to be dragged down by rising investment costs, deleveraging, and defensive savings sentiment since this year. China's wealthy population is generally stable. According to Hurun data, the number of wealthy households with net assets of over RMB 6 million in Greater China/Mainland China remained above 5 million/4 million households respectively from 2020 to 2025. Despite the trend of downgrading consumption, consumers will still selectively upgrade when they perceive clear benefits. The outdoor category has performed well in the past few years, and high-end beauty and personal care have also seen a recovery since 2025; the K-shaped consumption pattern has taken shape, the one-size-fits-all strategy is no longer effective, and sportswear and other industries are also being decentralized.

The bank believes that leading high-end brands show strong loyalty and a high concentration of consumer groups. For example, about 60% of Jiangnan clothing's offline retail sales come from the top 3% customers, Fila estimates that about 20% to 30% of sales come from the top 1% of customers, and Mao Geping (01318) and some Chow Tai Fu (01929) flagship stores about 80% of offline retail sales come from the top 10% of customers. The pricing structure is the ultimate test for the brand. Fila standard offline stores, Yamashita Arimatsu, and Mogo maintain strict discount control. Inbound consumption can be an engine of growth. Investors prefer company management that can clearly communicate a three- to five-year blueprint and 6-12 month short-term action plan, strong brand identity and star products, strict inventory and price controls, and healthy cash flow and shareholder returns.