CICC has published a research report reaffirming its Outperform rating on ANTA Sports (02020), citing the company's record-breaking first-half 2026 results. The firm maintains its target price of HK$110.91, which corresponds to 18x and 17x 2026/27 non-GAAP price-to-earnings ratios and implies approximately 41% upside from current levels.

Given expectations for improved profitability, CICC has raised its 2026/27 non-GAAP EPS forecasts by 4% and 5% to RMB 5.19 and RMB 5.62, respectively. The brokerage highlighted the company's better-than-expected earnings performance, driven primarily by stronger profitability across FILA and other brands.

Key takeaways from the results

During the first half of 2026, ANTA Sports generated revenue of RMB 43.5 billion, up 13% year-over-year and setting a new historical high. Excluding gains from the Amer Sports placement, net profit attributable to shareholders rose 13% year-over-year to RMB 7.9 billion, surpassing the firm's expectations. The company declared an interim dividend of HK$1.51 per share, representing a payout ratio of approximately 50%.

Operating cash flow for 1H26 increased 20% year-over-year to RMB 13.1 billion, underscoring the company's robust cash generation capabilities. Inventory turnover days improved by 6 days year-over-year to 130 days, reflecting more efficient inventory management.

Comprehensive upgrades across brands, products, and channels drive higher-quality growth

The flagship ANTA brand delivered revenue of RMB 17.8 billion in 1H26, up 5% year-over-year, with a focused product strategy driving over 30% growth in its running matrix and core apparel IP. FILA recorded revenue of RMB 15 billion, up 6% year-over-year, with high-single-digit growth in apparel and low-double-digit growth in its two core categories of tennis and golf.

Other brands achieved revenue of RMB 10.7 billion, up 44% year-over-year, with Descente and Kolon Sport seeing 25% and 45% revenue growth respectively. The consolidation of Jack Wolfskin also contributed to overall performance. Across channels, all brands saw improved brick-and-mortar store efficiency, while group e-commerce revenue grew 16% year-over-year and increased its revenue share to 36%.

Operational efficiency drives continued profitability enhancement

Gross margin expanded by 0.5 percentage points year-over-year to 63.9% in 1H26, benefiting from the increased revenue mix of higher-margin other brands. Operating margin improved by 0.7 percentage points year-over-year to 27.0%, supported by efficient operations. The ANTA brand achieved an operating margin of 22.5%, while FILA's operating margin increased by 1.0 percentage point to 28.7%, primarily reflecting enhanced retail operational quality. Operating margins improved across all brands.

Additionally, investment income from Amer Sports rose significantly to RMB 700 million, up from RMB 400 million in 1H25. On a consolidated basis, net profit attributable to shareholders, excluding the Amer Sports placement gain, grew 13% year-over-year to RMB 7.9 billion.

Second-half outlook remains ahead of industry, highlighting multi-brand empowerment capabilities

The company's guidance for the second half of 2026 continues to indicate performance ahead of the industry, which CICC believes once again demonstrates ANTA Sports' ability to empower its diverse brand portfolio. The brokerage remains firmly optimistic about the group's strategy of single-focus, multi-brand, and globalization, and looks forward to overseas business expansion along with Jack Wolfskin and Puma emerging as new growth engines.

Key risks

Potential downside risks include weaker-than-expected terminal retail environment, intensified industry competition, and slower-than-expected brand enhancement progress.