HSBC Research lowers Anta's net profit forecast for the next two years due to weak demand for sports apparel in the mainland and intensified competition

HSBC Global Research published a report indicating that ANTA SPORTS (02020.HK) announced its operational data for the fourth quarter of 2025 last week. Although the performance generally aligns with the management's latest guidance, the slowdown in growth trends for the ANTA main brand and the Descent brand has raised market concerns about the company's growth prospects this year; the target price has been lowered from HKD 118.3 to HKD 110.4; maintaining a "Buy" rating.

The research indicates that it largely maintains the profit expectations for ANTA SPORTS from last year, expecting last year's net profit to be RMB 12.991 billion (the same below), with a year-on-year revenue growth of 14%. Considering the weak demand for sports apparel in mainland China and intensified competition, the net profit forecasts for 2026 and 2027 have been lowered by 5.9% and 5.7%, respectively; the group's compound annual growth rate for revenue from 2025 to 2027 has been revised down from the previous estimate of 10.5% to 8.4%.

The research also lowered the group's net profit forecasts for 2025 to 2027 by 1% to 6%; for 2026, the revenue forecast has been reduced by 1.5% to a year-on-year growth of 8.4%; the net profit expectation for 2026 has been lowered by 5.9%, and the revenue forecast has been reduced by 1.5%, while the group's operating profit margin has been adjusted down from the previous 23.8% to 23%.

During the period from 2025 to 2027, the research has revised the group's compound annual growth rates for net profit and revenue down from the previous 13.2% and 10.5% to 10.5% and 8.4%, respectively. Based on the above adjustments, the net profit forecast for 2027 has currently been lowered by 5.7%, and the revenue forecast has been reduced by 2.9%