Anta Sports Products (2020.HK): Earlier-than-expected completion of Puma acquisition

After market close today (Oct 7), Anta announced its completion of acquiring 29% stake in Puma. The deal completion is about one month earlier than our expectation. We expect Anta management to give qualitative color on its playbook for future Puma China business on its 3Q26 retail sales announcement call in late Oct. In the complicated context of Nike's distribution strategy pivot in China and a generally weak China retail environment in 3Q26, we are positive on Anta's possible consolidation of Puma China's retail/distribution biz after its completion of Puma transaction. Citi's unchanged relative sector preference: Anta (Buy)>Li Ning (Buy)>Topsports (Buy). In the short term, Anta will have to book Puma's attributable loss in 4Q26 (which we estimate to amount to ~Rmb300m) in its "associate" line. We estimate the 4Q26 associate loss from Puma to negatively impact Anta's 2026E net profit by ~2%, despite minimum earnings impact in 2027E. Historically, Anta company has three operating mod