What are the projected cost implications of the partnership and associated marketing campaigns?

Projected Cost Implications

The partnership with Ruth Croft and Rosa Lara Feliu will primarily add to Amazfit’s marketing and endorsement outlays. In comparable athlete‑sponsorship deals within the wearables space, companies typically allocate $3‑5 million per athlete for multi‑year contracts, plus a dedicated campaign budget that can range from $2‑4 million annually for content creation, event‑‑presence, and social‑media amplification. Assuming Amazfit follows a similar structure, the partnership is likely to raise its 2025‑2026 marketing spend by ≈ $7‑9 million (≈ 0.5‑0.8 % of total revenue, given Zepp Health’s ~US$1.5 bn top line).

Trading Implications

• Short‑term: The incremental expense will modestly compress gross margins in the next quarter, creating a potential upside‑bias pressure on the stock as analysts adjust earnings forecasts. Expect a modest price dip (≈ 2‑4 %) on the earnings‑release day as the market prices in the higher cost base.
• Medium‑term: The campaign is designed to accelerate adoption of Amazfit’s premium sport‑watch line, a segment that historically enjoys double‑digit revenue growth when high‑visibility athletes are featured. If the partnership translates into a 5‑7 % lift in watch sales (≈ US$75‑105 million incremental revenue) and a stable gross‑margin expansion of 1‑2 pts, the net‑income impact could offset the added marketing spend within 12‑18 months and provide a positive earnings revision catalyst.
• Actionable: Keep the stock neutral‑to‑bullish on the short‑term dip, but position for a long‑position if the price stabilizes below the 200‑day moving average and the partnership’s sales lift is confirmed in the next earnings update. A breakout above the 200‑day line with volume support would signal the upside from the successful brand‑building effort.