(Bloomberg) -- Chinese gymnast-turned entrepreneur Li Ning is considering taking his eponymous sportswear brand private from the Hong Hong stock market, Reuters reported, citing people it didn’t identify. Shares surged 20%.

The founder is considering leading a consortium to buy out Li Ning Co., according to the report. The Beijing-based company selling athletic apparel and footwear has a market capitalization of HK$57 billion ($7.3 billion).

Several private equity firms including TPG, PAG and Hillhouse Investment have been approached to join the consortium, the report said. The discussions are in early stages and details have not been finalized, the report said.

Li Ning didn’t immediately respond to a Bloomberg News request for comment. Shares eased their earlier surge and were trading about 9% higher by 2:42 p.m. in Hong Kong.

Enduring low valuations for some Hong Kong-listed firms have made privatization an attractive prospect. Billionaire Reinold Geiger is making a renewed push to take global cosmetics firm L’Occitane International SA private, while Samsonite International SA has been weighing options including going private after receiving takeover interest from private equity firms.

Chinese sportswear stocks slumped last year as China’s post-reopening exuberance gave way to mounting economic headwinds. Li Ning tumbled almost 70% in 2023 and reported lackluster first-half earnings and declining same-store-sales in the third quarter. The company is expected to announce full-year results on March 19.

Challenges for the sector are expected to continue. Domestic sportswear brands like Li Ning and Anta Sports Products Ltd. are likely to cede market share to international names and face more competition in China’s lower-tier cities, Citigroup Inc. said in January. The bank expects Chinese brands’ sales growth in high-single-digits this year, below market expectation of double-digit expansion.

(Updates with details throughout.)

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