Is it time for ANTA to try spinning off?

There is no one-size-fits-all value management model. Enterprises that can survive market cycles often find a timely value management methodology based on their development stages and market environment.

ANTA's past success relied on mergers and acquisitions. With the strategy of bottom-fishing for "high-profile brands in operational distress", ANTA has evolved from a company that simply sells footwear and apparel into a brand management group similar to LVMH.

This multi-brand operation has completely widened the gap with its peers. Today, ANTA's revenue is 2.7 times that of Li-Ning, and its market value is even 6 times that of Li-Ning.

Although ANTA has an extremely high M&A success rate and has achieved the expected results, it can still continue to expand its territory through bottom-fishing if there are high-quality targets in the future. However, any large-scale continuous M&A is inevitably accompanied by unavoidable side effects:

Continuous M&A has led to a rise in the debt ratio, and the increase in management difficulty has more or less caused management problems such as the public opinion crisis of Arc'teryx and the failure of Xu Yang's reform.

Against this backdrop, ANTA may carry out more "Amer Sports" attempts.

After ANTA pushed its controlled Amer Sports to be listed independently, Amer Sports delivered impressive performance in both operating results and market value. Its stock price has risen by more than 1.2 times since listing, and its valuation level of 38 times PE is far higher than that of ANTA itself (12 times PE).

In the future, spinning off new brands that have been transformed by ANTA and achieved excellent results for independent listing will still be a viable option for ANTA. For one thing, from the operational perspective, spin-off is an important means to avoid resource dispersion and management out of control.

Furthermore, if high-growth brands are bundled with mature brands, the capital market tends to only give a conservative total valuation.

Today, the business of other brands under ANTA consisting of Descente, Kolon Sport, Jack Wolfskin and MAIA ACTIVE has a growth rate as high as 44.2%, far exceeding that of traditional sports brands such as Li-Ning. However, ANTA, which owns these high-growth assets, does not have a significant valuation premium, and its 12 times PE is basically at the same level as Li-Ning.

Under various factors, ANTA may try spin-offs.

/ 01 / Build an apparel version of LVMH through M&A, widening the market value gap with Li-Ning

In 2009, ANTA's boss Ding Shizhong once asked the leadership of the General Administration of Sport of China to make connections, hoping to discuss transformation issues with the senior management of Li-Ning, but was rejected by Li-Ning.

This is exactly a portrayal of the sports brand pattern at that time. Back then, Li-Ning was the well-deserved leader in China's sports brand industry, with revenue 1.43 times that of ANTA and market value nearly 3 times that of ANTA.

But everyone knows the current story: ANTA's revenue is 2.7 times that of Li-Ning, and its market value has widened to 6 times that of Li-Ning.

ANTA's catching up later has made Li-Ning brood over it. He asked at the regular meeting of senior executives: Why can Jinjiang brands catch up with us in just two or three years?

From a retrospective perspective, the core of ANTA's catching up later lies in creating a benchmark case of industrial operation through M&A, and leveraging long-term value growth.

After 2009, ANTA successively acquired brands including FILA, Descente (Chinese operating rights), Amer Sports (including brands such as Arc'teryx, Salomon and Wilson) and Kolon Sport, building a huge ANTA ecosystem empire.

After successfully acquiring multiple brands and achieving operational breakthroughs, ANTA is no longer a company that simply sells footwear and apparel, but a brand management group closer to LVMH. This positioning upgrade has also opened up greater growth space for it:

A single brand will easily encounter bottlenecks in price and covered groups, while multi-brand operation can not only achieve full coverage of high, medium and low end markets, but also continuously tap incremental opportunities in segmented tracks such as outdoor and mountaineering. Since the launch of multi-brand acquisitions, ANTA's revenue has grown to 13 times that of 2009.

Of course, M&A actions are easy to implement, but it is difficult to achieve ideal results.

Whether it is Nike shrinking its multi-brand line and refocusing on the two core brands of Nike and Converse, or a large number of domestic sports brands "catching a falling knife" in acquisitions, it shows that the key to achieving good results through M&A lies entirely in the subsequent operational capabilities.

The core reason why ANTA's M&A can succeed repeatedly lies in its mature methodology:

First, bottom-fishing high-profile brands that encounter operational difficulties. The logic is that short-term operational deterioration will not be quickly reflected in long-term brand awareness. On the contrary, the company's valuation will be pulled down by the operating situation, which creates a bottom-fishing space for ANTA.

Second, reshape operations with the DTC model. Most brands in distress are facing the problem of overstocked inventory. Therefore, after the acquisition, ANTA usually clears inventory, takes back agency rights and shifts to direct sales to ensure the brand's control over terminal channels.

Finally, achieve high-end breakthrough to reach broader consumer groups. Most of the brands acquired by ANTA have a certain popularity in their vertical fields. After the acquisition, ANTA will expand the influence of these well-known vertical brands through large-scale brand marketing and store upgrading, striving to break through the original consumer group boundaries.

In this way, ANTA's multi-brand M&A has become a benchmark case in China for leveraging performance and market value growth. But this does not mean that the model remains unchanged forever.

/ 02 / Enter a new stage of value management through spin-offs

In 2024, ANTA pushed its controlled Amer Sports (which operates brands including Arc'teryx and Salomon under its banner) to be independently listed on the New York Stock Exchange.

After the independent listing, Amer Sports delivered impressive results in both operating performance and market value. In terms of performance, Amer Sports' revenue increased by 27% year-on-year in 2025, and its operating profit increased by 49% year-on-year; in terms of market value, Amer Sports' stock price has risen by more than 1.2 times since listing, and its valuation level of 38 times PE is also significantly higher than that of ANTA (12 times PE).

The excellent performance of Amer Sports after its independent listing actually provides ANTA with a new idea: for brands that were previously acquired and have been successfully revitalized, promoting their spin-off and listing may achieve better performance growth and market value management effects.

Of course, ANTA's M&A success rate is indeed outstanding. As long as there are high-quality targets in the future, it can still continue to bottom-fish and expand the territory of the ANTA ecosystem. However, any large-scale continuous M&A will inevitably be accompanied by some side effects.

For example, large-scale continuous M&A has increased the scale of liabilities. Before 2019, ANTA's asset-liability ratio was mostly around 20%-30%, but in recent years, its debt ratio has been mostly above 40%. After the appropriate brands are spun off and listed, the sub-brands can raise funds independently and develop on their own, without continuously consuming the group's cash.

More importantly, the synergy effect of multi-brand operation does not have no boundary. As the brand matrix continues to expand and the management radius continues to extend, the integration cost and management difficulty will gradually rise.

In the past year, whether it is the failure of Xu Yang's reform on ANTA's main brand, or the "mountain blasting" public opinion crisis caused by Arc'teryx, more or less are related to the increased management difficulty under multi-brand operation. In this case, spin-off is also an optional path to avoid resource dispersion and management out of control.

At the same time, spin-offs can also bring higher valuations to the sub-brands under ANTA.

There is an unwritten rule in the capital market called "conglomerate discount". The reason is very simple: different businesses have completely different boom cycles and growth spaces. When high-growth businesses are bundled with mature businesses, the market will only give a conservative total valuation.

Although the business of all other brands under the ANTA system, consisting of Descente, Kolon Sport, Jack Wolfskin and MAIA ACTIVE, has a growth rate as high as 44.2%, which is far higher than the growth of traditional sports brands such as Li-Ning. This is also in line with the current characteristics of the sports apparel industry: the overall growth of the basic sports market is slowing down, but the segmented demands and scenarios still have great potential.

Generally speaking, brands in these high-growth segmented tracks deserve higher valuations than traditional brands. However, ANTA, which owns these high-quality new brands, has not shown a significant valuation premium, and its valuation level of 12 times PE is basically at the same level as Li-Ning.

Referring to Amer Sports, if the well-operated brands are spun off, the new brands will most likely get better valuations. And through ANTA's case, we can also see that enterprises should find a market value management rhythm suitable for themselves at different stages.

/ 03 / Find a market value management rhythm suitable for yourself at different stages

M&A and spin-off are both common market value management methods.

The former can expand the overall market value base by acquiring profits, brands and technologies; the latter can focus on business to improve efficiency and eliminate the diversification discount. Enterprises that can survive market cycles often can flexibly switch between the two according to their specific development stages and market trends at a pace that suits them.

GE is a very good example.

In 1892, GE started its business based on Edison's electrical business. Later, in the era of Jack Welch, it used the traditional basic businesses such as electric power to provide a steady stream of certain cash flow as the foundation, and then expanded to high-tech fields at that time such as aviation, medical treatment and new materials through a series of acquisitions. This two-wheel drive model of "stability + growth" once made GE's market value more than 40 times higher in 20 years, and it once topped the global market value ranking.

During this period, GE's market value growth path can be summarized as: relying on M&A to enter high-growth, high value-added fields, and then enjoy the growth stock valuation given by the capital market. At that time, GE's long-term valuation was 15-20 times PE, higher than the 10 times PE valuation of the manufacturing industry.

However, there is a natural entropy increase in enterprise development. Scale expansion will inevitably bring management loss and friction cost. After reaching a certain stage, the internal friction cost of the conglomerate can even exceed the cross-business synergy benefit.

GE's continuous M&A expansion was eventually backfired. Out-of-control management and dispersed resources caused challenges to many of GE's core businesses: large goodwill impairment in the power business, huge provision for reserves in the insurance business, and high leverage risks in the financial business. Eventually, its stock price plummeted and it was delisted from the Dow Jones Index.

Facing the difficulties, GE announced the largest restructuring in its century-old history in 2021, splitting into three entities:

GE Healthcare was listed independently in 2023, GE Vernova Energy was listed in 2024, and the remaining entity was retained as GE Aerospace, focusing on aero engines and after-sales services. After the split, the performance of the three major sectors has been fully restored. With the disappearance of the conglomerate discount, the total market value of the three major subsidiaries today is 10 times that of the low point before GE's spin-off.

Reviewing the market value management paths of global giants, we can find that there is no forever effective model, and any methodology only adapts to a specific industrial stage. When the industry is in a dividend period, the conglomerate's unified integration of resources may quickly seize the market; but once the business matures and organizational complexity erodes synergy benefits, split operation is also a viable option.

After all, the end point of market value management is not to expand the scale, but to strengthen the business and create value.

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This article is from the WeChat official account "ReadFinance", author: ReadJun, published by 36Kr with authorization.