09-05-2018

One of the key messages released from China’s 19th National Congress about the target of future China’s economic growth is the structural reform from quantity growth-focused to quality growth-focused. With rising per-capita income, the consumption style of Chinese consumer has changed and they are spending more to improve their living quality. Consumption upgrade has become the new engine of China’s growth. China’s State Council has approved the new National Fitness Plan in 2014 which has ambitious targets for national fitness levels and increased sports participation, setting up a goal to increase the output of the sports sector to more than 5 trillion yuan by 2025. China’s sports and fitness market is getting more popular after the implementation of the plan, which also brought huge investment opportunities to the sporting goods industry. The value of China’s sporting goods industry (manufacturing and sales of sportswear and related sports products) reached 307.7 billion yuan in 2016, with a growth rate of 11.65%. The industry maintains double-digit growth for consecutive three years. 2018 is another great year for sports games. We had Pyeong Chang 2018 Olympic Winter in February and will have June’s World Cup in Russia and August’s Asian Games in Indonesia fast approaching. We are in another golden age for sporting goods industry right now, its subsectors including sporting goods retailers and the OEMs are expected to record significant earnings growth in the coming years.

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