Chinanews client, Beijing, March 26 (Reporter Xie Yiguan) Due to the boycott of Xinjiang cotton (products), Nike and Adidas, which are on the hot search, have also encountered investors' "voting with their feet" in the capital market.

The stock price plummeted, and the total market value evaporated about 73.3 billion yuan

  On March 25, local time, Nike's stock price fell sharply at the opening, and it fell more than 5% at the beginning of the market, and Adidas' stock price also suffered a severe drop.

Nike stock price chart.

  As of the close of the 25th, Nike’s stock price closed down 3.39% to US$128.64, and the single-day circulating market value evaporated about 7.1 billion US dollars, or about 46.3 billion yuan; Adidas closed down 6.49% to 261.55 euros, and the single-day circulating market value evaporated about 35. Billion euros, or about 27 billion yuan.

  In other words, the combined market value of Nike and Adidas has lost approximately RMB 73.3 billion in one day.

  Why did the stock prices of Nike and Adidas fall?

Some research institutions pointed out that this is related to international brands such as H&M, Nike and Adidas spreading rumors, slandering and even discrediting and boycotting Xinjiang cotton (products) based on lies and false information.

  On the 24th, a "H&M boycott of Xinjiang products" statement on H&M's official website continued to ferment on the Internet, triggering the entire network to resist H&M, and e-commerce platforms, application stores, and map apps have been removed from H&M.

But then, some netizens discovered that Nike, Adidas, Uniqlo and other foreign companies held the same position as H&M.

  To make matters worse, Nike and Adidas also required their suppliers not to use any textiles and processed products from Xinjiang, which triggered public outrage: "Foreign companies cannot eat Chinese food while smashing Chinese bowls! "

To discredit Xinjiang Cotton, artists have terminated their contracts with Nike and Adi

  With the fermentation of the incident, many entertainers who have cooperated with related brands have issued statements to draw a line between Nike and Adidas.

  On the morning of March 25, Lehua Entertainment issued a statement on its official Weibo that the company’s artist Wang Yibo had terminated all cooperation with the NIKE brand.

Subsequently, the artist Tan Songyun Studio's official Weibo 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 a statement announcing the termination of cooperation with Nike's sub-brand Converse.

  In addition, from the afternoon to the evening of March 25, Yang Mi, Di Ali Reba, Deng Lun, Wang Jiaer, Chen Linong, Yi Qianqianxi, Peng Yuyan, Angelababy (Yang Ying), Eason Chen, and Xiang Zuo issued statements and announced the termination. 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 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 influence does the Chinese market have on Nike and Adi?

  Nike’s 2021 fiscal third quarter results disclosed on March 18 showed that in the three months ending on February 28, Nike achieved revenue of 10.4 billion U.S. dollars (approximately RMB 67.94 billion), an increase from the same period last year. 3%; net profit of 1.4 billion US dollars, an increase of 71%.

  Some analysts pointed out that Nike's revenue growth was entirely attributable to the growth of the Greater China market, helping it offset the 10% decline in North American revenue and the 45% impact of closing stores in Europe, the Middle East and Africa.

In the third fiscal quarter, Nike's revenue in Greater China increased by 51% year-on-year to $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 fiscal quarter.

According to media reports, in the 2019/2020 fiscal year, Nike’s sales in Greater China rose 8%, achieving growth for the sixth consecutive year.

  The influence of Greater China on Adidas is also not to be underestimated.

  On March 10, Adidas announced the group's fourth quarter results for fiscal year 2020.

Excluding exchange rate factors, sales resumed growth in the fourth quarter of 2020, up 1% year-on-year to 5.55 billion euros.

Among them, the fourth quarter sales in Greater China achieved a 7% growth.

In the last five years, Adidas' sales in Greater China doubled.

  In view of the consumption potential in Greater China, Adidas announced that it will report financial data separately from 2021.

In its new strategy for 2020-2025, Adidas will also list Greater China as one of the three key strategic markets, and 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 used Adinike for many years before, and I will replace it with Li Ning Anta in the future." Some consumers said that the pure white and flawless Chinese cotton should not be discredited.

Nike and Adi "down", Li Ning and Anta "up"

  While the stocks of Nike and Adidas have encountered investors' voting with their feet, the share prices of many Chinese clothing brands have ushered in sustained surges.

  On the 25th, A-share Chinese apparel and textile stocks strengthened one after another.

On the same day, stocks such as Smith Barney Apparel, Industrial Technology, and Ribo Fashion had their daily limit, and Langsha, Sevenwolves, Hailan House, and Nanshan Zhishang also rose sharply.

In the Hong Kong stock market, Li Ning closed up 10.74%, and Anta Sports soared 8.4%.

Li Ning stock price chart.

  In the early trading on the 26th, China's apparel and textile stocks continued to rise sharply.

As of the midday closing of the A-share market, more than 10 related stocks had daily limit, while Smith Barney Apparel, Ribo Fashion, etc. had two consecutive daily limit. Langsha, Hailan Home, Youngor, Semir Apparel and Seven Wolves rose.

In terms of Hong Kong stocks, as of press time, Li Ning's share price rose more than 8%, and Anta Sports rose more than 4%.

  On the news, Anta Sports has announced on the 24th that it will start relevant procedures to withdraw from BCI (Swiss Better Cotton Development Association).

Li Ning said that he is not a member of the BCI organization and has never joined.

On the 26th, Li Ning also announced the artist Xiao Zhan as his global spokesperson.

  "Sustainably pay attention to the progress of events and the trend of public opinion, and grasp the opportunities for the rise of domestic brands." CITIC Securities pointed out in the research report.