Ping An Securities: Sports and Outdoor Activities Are New Consumer Value Tracks, Pay Attention to Golf-Related Investments.

Ping An Securities issued a research report stating that the sports and outdoor industry in the new consumer market is a track with a lot of investment opportunities and value. With the return of golf to the Olympics and strong support from national policies, the company closely monitors the segmentation of the sports and outdoor industry. It is particularly focused on researching the upstream and downstream of the outdoor sports industry chain to find relevant investment targets in the golf industry. Key points from Ping An Securities include: Global golf equipment (including apparel) industry continues to grow According to Market Research Future, the global golf equipment market is projected to reach $13.26 billion in 2024 and is expected to increase to $18.66 billion by 2032, with a CAGR of approximately 4.36% from 2024 to 2032. As different countries and regions recognize the economic value of the golf industry chain, they actively implement policies and measures to promote golf sports, leading to the continuous expansion of the golf equipment market. The golf industry chain in China is growing rapidly According to the China Economic Industry Research Institute's "Analysis of the Current Situation and Development Trend of the Chinese Golf Industry in 2023," the total scale of China's golf industry increased from 8.64 billion RMB to 9.83 billion RMB from 2016 to 2019, with the total number of golfers continuing to grow. The China Economic Industry Research Institute estimates that by 2022, there are approximately 975,000 golfers in China. The company believes that golf in China is gradually moving towards massification and youthfulness. Compared to Europe and the United States, the development of the golf apparel and footwear industry in China is unique. In China, golf apparel and footwear spread the unique cultural connotations of golf sports through a "healthy and slow lifestyle" approach. The wearing scenarios for golf apparel and footwear are not only suitable for golf courses but also for business and leisure occasions. Therefore, golf apparel and footwear are derived from golf sports but go beyond golf itself. Due to the diversified wearing scenarios of golf apparel, the market space for golf apparel continues to expand. In the Chinese golf apparel and footwear market, the main categories are t-shirts, sweaters, jackets, and casual trousers, gradually becoming the attire choice for middle to high-end consumers. The company believes that with the development of golf apparel in China and the characteristics of the Chinese golf apparel and footwear industry, the Chinese golf apparel and footwear industry is gradually evolving into four main elements: height, depth, width, and brightness. These four elements align with the market positioning of golf apparel: height - high-end, depth - professionalism, width - diversity, brightness - fashion. The market positioning and price positioning of Chinese golf apparel and footwear brands are closely related to these four elements. Investment recommendations and recommended targets Based on the analysis of the golf sports industry chain, the company believes that the footwear and apparel brands in the downstream of the golf sports industry chain have good growth potential and opportunities. Specifically, the production of raw materials in the upstream, the development of golf clubs and shoes in the midstream and downstream, and training programs all show a trend of rapid development. With discretionary spending gradually improving and the consumption environment gradually improving, this may help the recovery of the golf sports industry chain. Based on the logic of discretionary spending improvement, the company believes that with the support of national policies for golf sports and the return of golf to the Olympic Games, the golf sports industry is gradually becoming more popular and youthful. The golf sports industry may usher in a new development opportunity. The company recommends investing in high-quality core assets in the golf sports field, especially targets with strong performance certainty and cost-effective valuation. In particular, it recommends paying close attention to golf apparel brands with high market share and marginal improvements. Key recommended targets include Biem.L.Fdlkk Garment and ANTA SPORTS. Risk warnings: 1) Risks of changes in consumer preferences, 2) Uncertainties in the continuous increase in the penetration rate of golf sports, 3) Risks of intensified competition in the segmented sports and outdoor market.