Jefferies: Mainland sportswear demand continues to weaken, industry focus shifts to market share restructuring

The Zhitong Finance App learned that Jefferies released a research report saying that demand for sporting goods in China is still weak, but market share redistribution is becoming a more important focus of discussion. Nike's weakness is more of a brand-specific issue, while Adidas continues to seize share, while Li Ning (02331)'s performance is superior to market concerns. The bank currently offers Anta Sports (02020) and Li Ning target prices of HK$88 and HK$40, with ratings of “hold” and “buy” respectively.

The bank said that, driven by the Mid-Autumn Festival, sales are estimated to have increased by about 80 to 120 basis points in September, masking some of the weaker basic demand. In terms of Golden Week, the bank's channel survey showed that the performance was slightly lower than the internal target, and this year's base was unfavorable. The vacation was one day less than last year. As a result, while apparently stable, recent data fails to support the argument that demand has improved markedly.

In addition, Nike recently requested dealers to step up price reduction promotions to speed up e-commerce inventory clean-up. The bank expects Nike's retail sales growth and price reduction trend in September to worsen compared to August, reflecting that promotions did not actually boost demand. However, although the overall price reduction situation in the industry remains high, it is still manageable, and there is no sign of a widespread price war.

The report mentioned that the survey showed that Adidas's overall sales remained strong in the third quarter. Retail sales in the mainland market increased by about 16% to 17% year on year, respectively, from July to September, which is slightly faster than the next quarter. Moreover, dealers remain cautious about Nike while increasing investment in Adidas and ASICS. The order performance of Adidas dealers in China in the first half of fiscal year 2027 indicates further acceleration, reflecting the continued shift in market share from Nike.