Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Japan–China relations have sharply deteriorated after Takaichi’s Taiwan remarks, triggering diplomatic retaliation, security tensions, and the worst bilateral rift since 1972.</li>
<li>Asics’ ¥90bn market-cap drop reflects concerns over its heavy reliance on Chinese consumers, both domestically and through inbound tourism, which drive roughly a quarter of profits.</li>
<li>Markets may be underestimating the risk of prolonged geopolitical strain, threatening Asics’ 2026 outlook despite record current performance and secure near-term guidance.</li>
</ul>


Japan–China relations have sharply deteriorated after Takaichi’s Taiwan remarks, triggering diplomatic retaliation, security tensions, and the worst bilateral rift since 1972.
Asics’ ¥90bn market-cap drop reflects concerns over its heavy reliance on Chinese consumers, both domestically and through inbound tourism, which drive roughly a quarter of profits.
Markets may be underestimating the risk of prolonged geopolitical strain, threatening Asics’ 2026 outlook despite record current performance and secure near-term guidance.


<ul>
<li>7th straight quarter of double-digit growth; 3Q revenue +21% y/y to ¥222bn, led by strong EU and Japan performance and steady global expansion.</li>
<li>Gross margin +110bps to 56.1%, operating margin +320bps to 20.9%; FY OP guidance raised to ¥140bn, share buyback of ¥30bn announced.</li>
<li>Near-Term share impact limited, but long-term growth underpinned by SportStyle and Onitsuka Tiger; OP could double to ~¥260bn though next MTP cycle.</li>
</ul>


7th straight quarter of double-digit growth; 3Q revenue +21% y/y to ¥222bn, led by strong EU and Japan performance and steady global expansion.
Gross margin +110bps to 56.1%, operating margin +320bps to 20.9%; FY OP guidance raised to ¥140bn, share buyback of ¥30bn announced.
Near-Term share impact limited, but long-term growth underpinned by SportStyle and Onitsuka Tiger; OP could double to ~¥260bn though next MTP cycle.


Asics (7936) | Sustained Growth Momentum with Margin Upside

<ul>
<li>Performance Running momentum intact: ~10% global market share, outgrowing Nike, with scope for further share gains.</li>
<li>Adjacent categories underpenetrated globally; restructuring complete, positioning for accelerated US/Asia expansion.</li>
<li>Lifestyle brands (SportStyle, Onitsuka Tiger) compounding fast (+40%+ YoY), higher margins, could be the real long-term profit driver.</li>
</ul>


Performance Running momentum intact: ~10% global market share, outgrowing Nike, with scope for further share gains.
Adjacent categories underpenetrated globally; restructuring complete, positioning for accelerated US/Asia expansion.
Lifestyle brands (SportStyle, Onitsuka Tiger) compounding fast (+40%+ YoY), higher margins, could be the real long-term profit driver.


ASICS (7936) | Growth Trajectory Intact, Optionality Expanding

<ul>
<li>Nike reports Q4 earnings Thursday. Focus for ASICS investors: (1) Sales momentum recovery, (2) Gross margin trends.</li>
<li>Nike’s continued weakness (global footwear sales -8% YoY in MRQ) supports bullish near-term thesis on ASICS.</li>
<li>However, signs of stabilization at Nike could signal increasing competitive pressure in H2/FY26.</li>
</ul>


Nike reports Q4 earnings Thursday. Focus for ASICS investors: (1) Sales momentum recovery, (2) Gross margin trends.
Nike’s continued weakness (global footwear sales -8% YoY in MRQ) supports bullish near-term thesis on ASICS.
However, signs of stabilization at Nike could signal increasing competitive pressure in H2/FY26.


ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum

<ul>
<li>Asics reported 3Q24 earnings last week. It was yet another strong quarter with sales +16% and OP+47%</li>
<li>They lifted full year guidance on continued strength in core running and another blow-out showing from Sportstyle sneakers and Onitsuka Tigers.</li>
<li>Asics have already exceeded the MTP target for ¥80 billion in operating profit by 2026. That plan will now be revised up at the Nov IR Day.</li>
</ul>


Asics reported 3Q24 earnings last week. It was yet another strong quarter with sales +16% and OP+47%
They lifted full year guidance on continued strength in core running and another blow-out showing from Sportstyle sneakers and Onitsuka Tigers.
Asics have already exceeded the MTP target for ¥80 billion in operating profit by 2026. That plan will now be revised up at the Nov IR Day.


Asics (7936) | Delivers Strong Q3 Performance Amid Challenging Conditions

Japan

ASICS CORPORATION manufactures general sporting goods and equipment.  The Company's products, such as athletic shoes and sportswear, are distributed in the United States, Europe, Australia, and Asia.

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ASICS Corp (7936 JP)

Asics (7936) | Geopolitics Headwinds

Japan-China relations strained after Taiwan remarks, impacting Asics' market cap and future outlook amid geopolitical tensions.

Mark Chadwick

Asics (7936) | Sustained Growth Momentum with Margin Upside

Strong financial performance with 7th consecutive quarter of double-digit growth, led by EU and Japan, with raised FY guidance and share buyback...

Mark Chadwick

ASICS (7936) | Growth Trajectory Intact, Optionality Expanding

Performance running brand has 10% global market share, outpacing Nike, poised for more growth. Adjacent categories ready for US/Asia expansion....

Mark Chadwick

ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum

Nike's Q4 earnings report may impact ASICS investors, with focus on sales momentum and gross margin trends. Nike's weakness could benefit ASICS in...

Mark Chadwick

Asics (7936) | Delivers Strong Q3 Performance Amid Challenging Conditions

Asics reported strong 3Q24 earnings, exceeding operating profit targets and lifting full year guidance due to continued strength in core running...

Mark Chadwick

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Asics (7936) | Geopolitics Headwinds

​Japan-China relations strained after Taiwan remarks, impacting Asics' market cap and future outlook amid geopolitical tensions.

Mark Chadwick

Asics (7936) | Sustained Growth Momentum with Margin Upside

Strong financial performance with 7th consecutive quarter of double-digit growth, led by EU and Japan, with raised FY guidance and share buyback...

Mark Chadwick

ASICS (7936) | Growth Trajectory Intact, Optionality Expanding

​Performance running brand has 10% global market share, outpacing Nike, poised for more growth. Adjacent categories ready for US/Asia expansion....

Mark Chadwick

ASICS (7936) | Nike Q4 Preview: Eyes on Margins and Momentum

​Nike's Q4 earnings report may impact ASICS investors, with focus on sales momentum and gross margin trends. Nike's weakness could benefit ASICS in...

Mark Chadwick

Asics (7936) | Delivers Strong Q3 Performance Amid Challenging Conditions

​Asics reported strong 3Q24 earnings, exceeding operating profit targets and lifting full year guidance due to continued strength in core running...

Mark Chadwick

Japan-China relations strained after Taiwan remarks, impacting Asics' market cap and future outlook amid geopolitical tensions.

Performance running brand has 10% global market share, outpacing Nike, poised for more growth. Adjacent categories ready for US/Asia expansion....

Nike's Q4 earnings report may impact ASICS investors, with focus on sales momentum and gross margin trends. Nike's weakness could benefit ASICS in...

Asics reported strong 3Q24 earnings, exceeding operating profit targets and lifting full year guidance due to continued strength in core running...