While Anta’s 2025 earnings (core NP +14% YoY) were slightly ahead of market expectations, we believe investors would stay cautious in the near term, as management has taken a rather cautious view on the overall market and the growth outlook in 2026, especially for core Anta brand. In the meantime, Anta also reaffirmed its ambitious plan of expanding globally through mergers and acquisitions, which could not only drag near-term profitability, but also dividends and buybacks when the acquisition of Puma is not yet settled. This could sound underwhelming in the near term, but we reiterate our view that Anta may take some time for demonstrating its resiliency through its multibrand strategy, and current valuation is undemanding for patient investors.
Key Factors for Rating
2025 full-year result slightly beat thanks to Fila uptick of OPM. Anta’s revenue and NP are 2% above market consensus, as they reach RM80.2bn and RMB13.6bn respectively. Excluding the one-off gain related to Amer Sports (AS US, NR), Anta’s core NP is up 14% YoY. Apart from the fast-growing Descente and Kolon which had already reported strong figures in 2025, we see the key highlight is mostly on Fila, as it managed to achieve a 0.8ppt YoY OPM expansion to 26.1%, which helped company-wide OPM to expand 0.4ppt YoY to 23.8%. This suggested that the new mgmt. leading Fila has been able to achieve strong cost and discount control on the brand through a more dedicated focus on sports such as golf and tennis.
2026 guidance reflects a cautious view on China, especially mass market. For 2026, mgmt. targeted to achieve retail sales value (RSV) growth of LSD/MSD/>20%, while OPM to be c.20%/c.25%/>25% for Anta/Fila/other brands (excluding Jack Wolfskin), respectively. We note that mgmt. has sounded more conservative than before, citing reasons such as higher base and mass market being more challenging under the current macro environment. While mgmt. emphasised that they would also aim to grab more market share and outperform peers, we believe this could sound underwhelming when compared to Li Ning (2331 HK, BUY) when LN targeted a HSD YoY growth.
Near-term drag from M&A strategy. When considering the impact of Jack Wolfskin, which was acquired and consolidated since May 2025, we believe this would also imply overall 2026 NP would be even slower, as Anta will dedicate more resources on the brand and expect the loss may widen. In the meantime, as the deal to acquire the minority stake of Puma (PUM GY, NR) is still subject to be completed but expected to use up cash outside mainland China, Anta also expected it will halt its share buybacks, and fix its payout ratio to 50% only.