Nike'S Low Price Hits Chinese Sports Apparel Stocks

In recent years, PEAK Sports has actively established its brand value by signing contracts with NBA players. On Wednesday, PEAK Sports invited five NBA spokesmen to hold the opening ceremony of its China tour in Beijing to display new sneakers. The five players will visit 18 cities in the mainland in the next month to promote the group brand. Peter's CEO Xu Zhihua pointed out that Chinese people love watching basketball, especially NBA At the same time, there are 3.6 pairs of sports shoes per capita in the United States, but less than one pair per capita in China, so the growth potential is great.

Xu Zhihua stressed that the signing of NBA spokesperson is to attract people to buy various products of its brand by improving the brand level. In fact, the sales of leisure products of the group are more than basketball products.

Nike's low price strategy will do more harm than good

It is rumored that Nike will launch low-cost sports shoes to attack the second and third tier cities in mainland China. Xu Zhihua believes that if Nike changes its brand positioning, it will do more harm than good, and it is unlikely that it will do so. Instead, it may launch individual styles. He also stressed that Nike lowered the price last year, but it did not affect the sales of PEAK.

At present, PEAK's P/E ratio is about 12 times, which Xu Zhihua believes is inconsistent with the growth. The actual P/E ratio should be 17 to 18 times, or even 20 times. At present, the market share of the Group is 5% in terms of sales. He said he expected the group's growth rate to be higher than the market average of 15% to 20% per year.

Nike's Low Price Hits Chinese Sports Apparel Stocks

In late June, it was reported that Nike planned to enter the second and third tier markets in mainland China with low-cost products. UBS predicted that Nike would launch low-cost shoes in China from the second quarter of 2011, which was earlier than the second half of 2011 as originally predicted by the bank. Influenced by this news, from June 22 to July 6, several seed sportswear companies such as Li Ning, Anta and China Dongxiang fell by more than 10% in two weeks.