* ANTA records third straight quarter of order growth
* Xtep, Peak, 361 Degrees see improved order figures
* Nike distributor Belle books rising growth in same-store sales
* Li Ning to announce earnings this week (Adds share movement)
By Donny Kwok
HONG KONG, March 17 China's sportswear makers appear to be emerging from years of overzealous expansion fuelled by Beijing Olympic Games fever, after the country's biggest player demonstrated sustained recovery with its third straight quarter of order growth.
ANTA Sports Products Ltd and smaller rivals such as Xtep International Holdings Ltd and Peak Sport Products Co Ltd were caught out after the 2008 games when demand fell far short of expectations. Massive inventories and the cost of maintaining a sprawling outlet network outlet soon ate into margins.
Foreign competitors including Nike Inc and adidas AG also took a knock from an ensuing war of price discounts, in a market widely regarded as a growth engine while demand is sluggish in Europe and the United States.
Sportswear makers have since been clearing stocks and closing stores. ANTA - the biggest by market value at $4 billion - finally offered a sign of industry recovery last month by booking a high single-digit percentage growth in orders for third-quarter delivery.
"The sportswear sector is back on a growth track and ANTA is the leader of the trend. Positive order growth for ANTA will likely be sustained in the next few years," said Hong Kong-based UBS analyst Spencer Leung.
At both Xtep and 361 Degrees International Ltd, third-quarter orders fell on year by a single-digit percent, but the rate of decline has narrowed over the past year.
Peak even booked percentage growth in the mid-teens, saying orders for delivery in the first to third quarters pointed to overall recovery.
"With substantial clearance of inventory, leaner sales networks, stricter cost control measures and a prudent approach in placing and accepting orders, the stronger sportswear manufacturers are now in better shape," 361 Degrees Chairman Ding Huihuang said in an earnings statement on Monday.
The chairmen of both Xtep and Peak expressed similar turnaround sentiment, though both saw net profit fall 20 percent last year as a result of operational reorganisation. At 361 Degrees, the profit decline was 70 percent
"Even though we see the inventory issue has been taken care of, the industry is still not yet in a stage that we see solid organic growth. It may take a while," said Linus Yip, chief strategist at Hong Kong-based First Shanghai Securities.
Shares of 361 Degrees closed down 1 percent on Monday after the company announced earnings which missed analyst estimates. Xtep and Peak ended higher last Wednesday after reporting figures in line with forecasts.
GRADUAL SALES GROWTH
China's biggest distributor Belle International Holdings , which sells sportswear from Nike, adidas and Puma SE , offered further indication of the industry gradually getting back on its feet.
Last week, Belle said same-store sportswear sales grew 7.0 percent for the three months to February compared with the same period a year earlier. That was an improvement from the 5.0 percent of October-December and 4.5 percent of July-September.
ANTA, which kitted out China's delegation to the Sochi Winter Olympic Games last month, plans to open more stores in prime locations, in contrast to its pre-Beijing Olympics strategy of opening stores in even far-flung locations.
The company beat estimates by posting net profit of 1.31 billion yuan ($213.49 million) for last year, pushing its shares higher on the day. The result represented a 3.2 percent on-year decline, but was much narrower than the previous year's 21.5 percent drop.
It said average inventory days, or the time taken to sell goods produced, was 59 last year from 51 in 2012 and 44.1 in the Beijing Olympics year. The higher the number, the lower the cost of sales. In mid-2012, the figure spiked to 102.5.
But ANTA's most significant indicator of recovery is last month's quarterly trade fair orders.
"People will pay attention to other players for signs of a similar phenomenon as at ANTA, which saw growth in orders," said Sunwah Kingsway Group Research analyst Steve Chow.
Li Ning Co Ltd is scheduled to report earnings on March 21. ($1 = 6.1361 Chinese Yuan) (Reporting by Donny Kwok; Editing by Christopher Cushing)