The sporting goods market will maintain steady growth for a long time. Health, self-esteem and quality of life are becoming the core demands of consumers in China. From the experience of developed countries, these demands will support the long-term stable growth of domestic sporting goods industry. According to Euromonitor data, from 202/kloc-0 to 2026, the size of the sporting goods market in China is expected to achieve a compound annual growth rate of 12.3%.
We maintain the rating of "outperforming the market" in the clothing industry. As we expect that the economic growth rate of China will be slightly weakened in 2022, we believe that the high growth rate and high growth certainty of the sporting goods industry in China will still be attractive to the market. Our preferred stock in the industry is Li Ning (0233 1 HK), and the company has shown strong competitiveness in terms of product strength and operational efficiency. We predict that Li Ning's earnings per share will record a compound annual growth rate of 43.4% from 2020 to 2023. We give Li a target price of HK$ 106.00 and give him a "buy" investment rating.