Chinese sports stocks rise as safe choice after video game shock
(Bloomberg) – Shares of Chinese sneaker makers and other sports-related companies soared as the government launched an effort to promote exercise amid harsh criticism of the video game industry in the media in ‘State.
Li Ning Co. jumped 12% while Anta Sports Products Ltd. rose 10%, with the two Hong Kong-listed sportswear manufacturers pushing to new heights. The gains followed the announcement by the State Council to renovate parks, gymnasiums and stadiums with the aim of creating a 5,000 billion yuan ($ 774 billion) sports industry. by 2025.
One of the main objectives of the plan is to encourage the sport participation of young people. The plan stands in stark contrast to Tuesday’s media attack on gambling “spiritual opium”, which brought shares of Tencent Holdings Ltd. down. and other related names.
Sportswear has been a safe haven as Beijing’s crackdown on fintech, real estate and overseas listings spill over into the market. Li Ning is up 76% this year, while Anta is up 49%, compared to a 2.5% loss for the Hang Seng Index. The sports sector has benefited from a wave of nationalism in response to the cotton controversy in Xinjiang and the enthusiasm for the return of the Olympics and other sporting events.
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“We believe that with increasingly sophisticated facilities and guidelines for calling for sports participation, China is well placed to develop its sports industry,” Goldman Sachs analysts led by Michelle Cheng wrote in a note. . Goldman maintains its buy on Li Ning and Anta, saying both should benefit from the industry’s growth and the “China-chic trend.”
Among other shares on the rise Wednesday, retailer Topsports International Holdings Ltd. climbed 23% in Hong Kong. On the mainland, Lander Sports Development Co., China Sports Industry Group Co., and Jiangsu Jinling Sports Equipment Co. have all exceeded their daily limits.
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