CHINA SPORTING GOODS : Raw Material Inflation Materializing

研报英文原文证据摘录

CHINA SPORTING GOODS : Raw Material Inflation Materializing

EQUITIES

GENERAL RETAIL

CHINA SPORTING GOODS

FLASH NOTE

Raw Material Inflation Materializing

14 MAY 2026 Securities Research Report Production time: 21:40* (London time)

Research Analyst & Publishing Entities

Laurent Vasilescu BNP Paribas Securities Corp (1) (+1) 212 634 4971 Laurent.Vasilescu@us.bnpparibas.com

What happened?

Last night’s call was very informative, particularly around raw material cost inflation from oil based inputs. Yue Yuen/

Pou Sheng (HK551 / HK3813, NC) reported 1Q26 results and held its earnings call last night. We listened to the call in

Mandarin and provide key takeaways below. Like last year around the IEEPA tariffs, we will be hosting a series of

supply chain calls with Yue Yuen, Sports Gear, Makalot and Lai Yih over the coming weeks. Please reach out if you

would like to join these virtual meetings.

BNPP View:

Order visibility remains low and input cost inflation starting to emerge

On the manufacturing side, management noted that order visibility remains low in 2Q after revenues declined 6% and

volume down 8% in 1Q. That said, Yue Yuen expects volume to trough in 1Q, with the pace of declines moderating in

2Q, though monthly volatility will persist. By brand, the mix of the two principal brands (aka Nike and adidas) continue

to decline as they underperform other brands. By category, running and outdoor continue to be the outperformers on

the manufacturing side. Yue Yuen has been adding new brand partners over the last few years, predominantly large

scale Chinese domestic outdoor brands, to diversify its manufacturing portfolio.

We walk away with some interesting caveats on the recent macro topics as well. First on tariffs, Yue Yuen is currently