Citigroup is optimistic about ANTA's potential acquisition of Puma, with a target price of 107 yuan

Citi published a research report stating that since Anta (02020.HK) announced the acquisition of Puma, investors' concerns have mainly focused on whether this acquisition will boost or hinder Anta's business in China. Referring to Anta's different acquisition models in the past and discussions with Chinese retailers, the bank expects that, in addition to the potentially rapidly growing brand revenue from reshaping Puma's business in China, Anta may consolidate Puma's retail/distribution business in China, even though Anta only holds a 29% stake in Puma, which will bring surprising upside potential.

Considering Anta's strong retail expertise in China, it is expected that Puma's distribution/retail business in China will grow rapidly. Citi believes that investors may underestimate the positive impact of Puma's business in China on Anta after the transaction is completed.

Citi maintains its recommendation order for the Chinese sportswear sector as Anta, with a target price of 107 yuan, followed by Tmall (06110.HK) and Li Ning (02331.HK), all rated as buy