Nike and Adidas are “downward”, while Li Ning and Anta are “upward”
Because Nike and Adidas, whose boycotts of Xinjiang cotton (products) were on the hot searches, also encountered “voting with their feet” from investors in the capital market.
The stock price fell sharply, and the total market value evaporated by about 73.3 billion yuan
On March 25, local time On the same day, Nike’s stock price fell sharply at the opening, falling more than 5% at the beginning of the trading, and Adidas’ stock price also suffered a heavy fall.
Nike stock price chart
As of the close of trading on the 25th, Nike’s stock price closed down 3.39% to US$128.64, with its single-day circulating market value evaporating approximately US$7.1 billion, or approximately 46.3 billion yuan; Adidas closed down 6.49% , reported 261.55 euros, and the single-day circulation market value evaporated by approximately 3.5 billion euros, equivalent to approximately 27 billion yuan.
In other words, the market value of Nike and Adidas evaporated by about 73.3 billion yuan in one day.
Why did the stock prices of Nike and Adidas drop? Some research institutions pointed out that this is related to international brands such as H&M, Nike, Adidas and other international brands spreading rumors, slandering and even smearing and boycotting Xinjiang cotton (products) based on lies and false information.
On the 24th, a statement “H&M boycotts Xinjiang products” on H&M’s official website continued to ferment on the Internet, triggering a boycott of H&M across the entire network, and e-commerce platforms , app stores, and map apps have all removed H&M from their shelves. But then, some netizens discovered that there are many foreign-funded companies such as Nike, Adidas, and Uniqlo that hold the same stance as H&M.
What’s even worse is that Nike and Adidas also require their suppliers not to use any textiles and processed products from Xinjiang, causing public outrage: ” Foreign companies cannot eat China’s food and smash China’s bowl at the same time!”
Damating Xinjiang cotton, artists have terminated their contracts with Nike and Adidas
As the incident unfolds, many entertainers who have cooperated with related brands have issued statements to draw a clear line with Nike and Adidas.
On the morning of March 25, Lehua Entertainment issued a statement through its official Weibo saying that the company’s artist Wang Yibo had terminated all cooperation with the NIKE brand. Subsequently, the official Weibo account of artist Tan Songyun’s studio announced that Tan Songyun had terminated all cooperation with the NIKE brand.
On the afternoon of the 25th, artists Bai Jingting, Ouyang Nana, and Zhang Yixing also issued statements announcing the termination of their relationship with Nike Cooperation with its sub-brand Converse.
In addition, from the afternoon to the evening of March 25, Yang Mi, Dilraba Dilraba, Deng Lun, Wang Jiaer, Chen Linong, Yi Yang Qianxi, Eddie Peng, Angelababy (Yang Ying), Eason Chan, and Xiang Zuo have issued statements announcing the termination of all cooperation with Adidas.
“According to the company’s financial report data, mainland China accounts for about 20% of NIKE’s global sales. If relevant If international brands refuse to repent, it will have a greater negative impact on their sales in the Chinese market.” CITIC Securities said in a research report.
How much impact does the Chinese market have on Nike and Adidas?
Nike’s fiscal 2021 third quarter results disclosed on March 18 showed that in the three months as of February 28, Nike achieved revenue US$10.4 billion (approximately RMB 67.94 billion), an increase of 3% over the same period last year; net profit was US$1.4 billion, an increase of 71%.
Some analysts pointed out that Nike’s revenue growth was entirely due to the growth of the Greater China market, helping it offset a 10% decline in revenue in North America and Europe, the Middle East and Africa. 45% impact of the store. In the third fiscal quarter, Nike’s Greater China revenue increased 51% year-on-year to US$2.279 billion.
Screenshot from Nike’s financial report
The contribution of the Chinese market to Nike’s revenue is not only reflected in a single financial quarter. According to media reports, Nike’s sales in Greater China increased by 8% in the 2019/2020 fiscal year, achieving growth for the sixth consecutive year.
Greater China’s influence on Adidas cannot be underestimated.
On March 10, Adidas announced the group’s fourth quarter results for fiscal year 2020. Excluding exchange rate factors, sales returned to growth in the fourth quarter of 2020, rising 1% year-on-year to 5.55 billion euros. Among them, sales in Greater China increased by 7% in the fourth quarter. In the last five years, Adidas’ sales in Greater China have doubled.
In view of the consumption potential in Greater China, Adidas announced that it will report financial data separately starting in 2021. Adidas also lists Greater China as one of the three strategic key markets in its new strategy for 2020-2025. It is expected that in the next few years, the Greater China market will become the fastest growing sports goods market in the world.
“I have been using Adidas Nike for many years, but I will switch to Li Ning Anta in the future.” Some consumers said that pure white and flawless Chinese cotton cannot be discredited.
Nike and Adidas are “downward”, while Li Ning and Anta are “upward”
At Nike Encountering investors with ADI stockWhile voting with their feet, the stock prices of many Chinese clothing brands have continued to rise.
On the 25th, A-share Chinese apparel and textile stocks strengthened one after another. On that day, Meibang Apparel, Xingye Technology, Ribo Fashion and other stocks rose by the daily limit, and Langsha Holdings, Septwolves, Heilan House, Nanshan Zhishang, etc. also rose sharply. In the Hong Kong stock market, Li Ning closed up 10.74% and Anta Sports rose 8.4%.
In early trading on the 26th, China’s apparel and textile stocks continued to rise sharply. As of the midday closing of A-shares, more than 10 related stocks have reached their daily limit. Meibang Apparel, Ribo Fashion, etc. have reached their daily limit for two consecutive times. Langsha Co., Ltd., Heilan Home, Youngor, Semir Apparel, Septwolves, etc. have also risen. In terms of Hong Kong stocks, as of press time, Li Ning’s share price has soared by more than 8%, and Anta Sports has risen by more than 4%.
On the news, ANTA Sports announced on the 24th that it would initiate relevant procedures to withdraw from BCI (Swiss Better Cotton Development Association). Li Ning stated that it is not a member of the BCI organization and has never joined.
“Continuously pay attention to the progress of events and the trend of public opinion, and seize the opportunities for the rise of domestic brands.” CITIC Securities pointed out in the research report.
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