China Sportswear-The middle-ground conundrum:who are better positioned to overcome it?

Peak reported flat 1Q16 SSSg and low-single-digit decline in 4Q16 orderbook。

    Weak apparel volume was the source of disappointment behind both 1Q16SSSg and 4Q16 orderbook, according to management. Peak slightly increasedretail discount YoY during 1Q16 but found it difficult to boost apparel volume.

    On the other hand, the company’s more functional basketball shoes collectionsremain popular (despite of heavier competition from Anta and Li Ning). Overallchannel inventory was healthy at 4-5 months in 1Q16.