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<Research>BOCI Still Confident in SHENZHOU INTL's Earnings; ANTA SPORTS May Benefit Indirectly from Nike's Troubles; TOPSPORTS Downgraded to Hold
Recommend 7 Positive 19 Negative 11 |
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BOCI wrote in its recent report that Nike (NKE.US)'s issues are believed to be more severe than expected since it lowered its earnings guidance in June. On one hand, the brand is expected to face demand challenges in both the West and China, which will require one to two years for readjustment; on the other hand, this will bring uncertainty to orders for the company's suppliers. Considering the resilience of upstream leaders in adjusting orders, BOCI maintained a positive outlook on these companies. As a result, it remains confident in SHENZHOU INTL (02313.HK)'s earnings. On the downstream side, BOCI expected ANTA SPORTS (02020.HK) to be an indirect beneficiary of Nike's troubles. However, given the challenging retail environment in China, the broker has become more cautious about the stock in the short term. BOCI also downgraded the rating on TOPSPORTS (06110.HK) from Buy to Hold and axed the TP from $7.5 to $2.5 in light of the company's low earnings visibility. BOCI's ratings and TPs for Chinese sportswear stocks are listed below: Stock | Rating | TP ANTA SPORTS (02020.HK)｜Buy｜$94.8 LI NING (02331.HK)｜Hold｜$13.1 SHENZHOU INTL (02313.HK)｜Buy｜$93 TOPSPORTS (06110.HK)｜Buy->Hold｜$7.5->$2.5 XTEP INT'L (01368.HK)｜Buy｜$6.2 AAStocks Financial News |
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