纺织服饰/服装家纺 公 司 库销比优化顺利轻装上阵，索康尼如期盈利 研 特步国际（01368.HK） 究 ——港股公司信息更新报告 2024年03月20日 吕明（分析师） 周嘉乐（分析师） 张霜凝（联系人） 投资评级：买入（维持） lvming@kysec.cn zhoujiale@kysec.cn zhangshuangning@kysec.cn 证 书编号：S0790520030002 证书编号：S0790522030002 证书编号：S0790122070037  2023年库销比优化顺利轻装上阵，索康尼如期盈利，维持“买入”评级 日期 2024/3/20 公司发布2023年业绩，2023年收入143.5亿元（同比+10.9%，下同），归母净利 港 当前股价(港元) 5.040 润 10.3 亿元（+11.8%），2023H2 收入 78.2 亿元（+8%），归母净利润 3.65 亿元 股 一年最高最低(港元) 10.360/3.610 （+10.1%）。考虑消费信心仍未恢复，我们略下调2024-2025年并新增2026年盈 公 总市值(亿港元) 133.13 司 利预测，预计归母净利润为 11.5/ ...

Investment Rating - The investment rating for the company is "Buy" [1][4] Core Views - The company's 2023 performance met expectations, with revenue and net profit increasing by 10.9% and 11.8% year-on-year, respectively [1][3] - The main brand, Xtep, showed robust growth, particularly in the running market, and the professional sports segment performed exceptionally well [3][4] - The company aims for a revenue growth rate of no less than 10% in 2024, with profit growth expected to outpace revenue growth [4] Financial Performance - In 2023, the company achieved a total revenue of 14.346 billion RMB and a net profit of 1.030 billion RMB, with an EPS of 0.41 RMB [1][5] - The gross profit margin improved by 1.3 percentage points to 42.2%, while the operating profit margin slightly decreased by 0.3 percentage points to 11.0% [1][2] - The company reported a significant increase in operating cash flow, reaching 1.255 billion RMB, up 119.5% year-on-year [2][5] Brand Performance - The main brand, Xtep, saw over 20% growth in retail sales, with a strong performance in the running category [1][3] - The professional sports segment, particularly the brand Saucony, became the first small brand to achieve profitability, contributing approximately 10 million RMB in profit [2][3] - The company is expanding its multi-brand strategy, with Saucony and other small brands enhancing their product lines and market presence [3][4] Future Projections - The company has adjusted its profit forecasts for 2024 and 2025, lowering the expected net profit by 9% and 16%, respectively [4][5] - The projected EPS for 2024, 2025, and 2026 is 0.44 RMB, 0.50 RMB, and 0.56 RMB, respectively, with corresponding P/E ratios of 9 and 8 [5][8]

M N 19 Mar 2024 CMB International Global Markets | Equity Research | Company Update Xtep (1368 HK) Stay prudent as channel health is the priority Target Price HK$6.31 Xtep’s FY23 results were dragged by weak e-commerce sales but inline with market consensus. Due to the macro uncertainty and high base, Xtep’s (Previous TP HK$7.07) management has put aside its 5-year growth target and introduced a rather Up/Downside 39.0% conservative target in FY24E. This is inline with our view that Xtep may not be Current ...

证券研究报告 | 2024年03月19日 特步国际（01368.HK） 买入 2023 年收入增长 11%，存货同比下降 22% 核心观点 公司研究·财报点评 纺织服饰·服装家纺 2023年收入增长11%，存货金额如期改善，经营现金流净额增长119%。2023 年收入增长10.9%至143.5亿元，归母净利润增长11.8%至10.3亿元。特步 证券分析师：丁诗洁 证券分析师：关竣尹 0755-81981391 0755-81982834 品牌和时尚运动品牌毛利率均有改善，推动集团毛利率同比提升1.2百分点。 dingshijie@guosen.com.cnguanjunyin@guosen.com.cn 由于年内赞助马拉松赛事、大运会，以及实际收入低于年初公司预期，因此 S0980520040004 S0980523110002 推广费用率提升1.8百分点至13.7%，叠加应占联营公司利润增长、所得税 基础数据 率减少的贡献，集团归母净利率7.2%，同比略提升。存货周转天数同比持平 投资评级 买入(维持) 在90天，存货金额同比下降22%至17.9亿元，存货水平如期改善，应收账 合理估值 5.30 - 5.8 ...

Investment Rating - The report maintains a "Buy" rating for the company [3][6]. Core Views - The company achieved a revenue growth of 11% in 2023, with a net profit increase of 11.8% to 1.03 billion yuan, aligning with expectations. The gross margin improved by 1.2 percentage points to 42.2% [1][6]. - The main brand's revenue grew by 7.4% to 11.95 billion yuan, with expectations for continued high single-digit growth in 2024 [1][6]. - The company successfully optimized channel inventory, with inventory turnover days decreasing from 5.5 months in Q4 2022 to 4-4.5 months in Q4 2023, laying a solid foundation for healthy growth in 2024 [2][6]. - The new brand, Saucony, is expected to maintain rapid growth, with the professional sports division achieving profitability for the first time in 2023 [2][6]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 14.35 billion yuan, with a year-on-year growth rate of 10.9%. The net profit attributable to shareholders was 1.03 billion yuan, reflecting an 11.8% increase [1][7]. - The expected revenue for 2024 is projected to be 15.93 billion yuan, with a growth rate of 11% [7][10]. Brand and Product Development - The main brand's revenue growth is supported by the optimization of adult store numbers, which increased by 258 to 6,571 stores by the end of 2023. The company plans to continue structural optimization in 2024 [1][2]. - The children's business also expanded, with 1,703 stores opened, contributing to rapid revenue growth in children's apparel [1][2]. Inventory and Operational Efficiency - The company has successfully reduced channel inventory turnover days, indicating improved operational efficiency and a healthier inventory structure [2][6]. - The professional sports segment saw a revenue increase of 98.9% to 800 million yuan in 2023, marking its first profitable year since acquisition [2][6]. Future Outlook - The company anticipates a revenue growth of over 10% in 2024, driven by the main brand's operational efficiency and the profitability trend of the Saucony brand [6][10]. - The projected net profit for 2024 is expected to reach 1.17 billion yuan, with a corresponding PE ratio of 9 times [6][10].

Financial Performance - Revenue for 2023 reached RMB 14,345.5 million, a 10.9% increase from RMB 12,930.4 million in 2022[5] - Gross profit for 2023 was RMB 6,049.7 million, with a gross margin of 42.2%, up from 40.9% in 2022[5] - Operating profit for 2023 was RMB 1,579.9 million, representing an operating profit margin of 11.0%[5] - Net profit attributable to ordinary shareholders for 2023 was RMB 1,030.0 million, with a net profit margin of 7.2%[5] - Basic earnings per share for 2023 were RMB 40.76 cents, up from RMB 36.61 cents in 2022[5] - Group revenue reached a record high of RMB 14,345.5 million, a 10.9% increase year-over-year (2022: RMB 12,930.4 million)[10] - Gross margin improved to 42.2% (2022: 40.9%)[10] - Net profit attributable to ordinary shareholders increased by 11.8% to RMB 1,030.0 million (2022: RMB 921.7 million)[10] - Revenue increased to RMB 14,345,508 thousand in 2023, up from RMB 12,930,385 thousand in 2022, representing an 11% growth[191] - Gross profit rose to RMB 6,049,675 thousand in 2023, compared to RMB 5,291,709 thousand in 2022, a 14% increase[191] - Operating profit reached RMB 1,579,902 thousand in 2023, up from RMB 1,464,284 thousand in 2022, a 8% growth[191] - Net profit attributable to equity holders of the company was RMB 1,030,009 thousand in 2023, compared to RMB 921,694 thousand in 2022, a 12% increase[191] - Basic earnings per share increased to RMB 40.76 cents in 2023, up from RMB 36.61 cents in 2022, a 11% growth[191] - Other comprehensive income for the year was RMB 8,096 thousand in 2023, compared to a loss of RMB 110,615 thousand in 2022[192] - Total comprehensive income for the year was RMB 1,041,145 thousand in 2023, up from RMB 801,662 thousand in 2022, a 30% increase[192] Operational Highlights - The company operates over 8,500 stores globally across Asia-Pacific, North America, Europe, the Middle East, and Africa[2] - Inventory turnover days remained stable at 90 days in both 2023 and 2022[6] - The company's debt ratio increased slightly to 20.3% in 2023 from 19.6% in 2022[6] - The main brand, Xtep, achieved a 7.4% revenue growth to RMB 11,947.3 million (2022: RMB 11,127.9 million)[10] - Saucony became the first new brand in the group's portfolio to achieve profitability in 2023[12] - The group acquired 40% of Saucony's intellectual property in China in December 2023 and fully acquired the remaining equity of the joint venture with Wolverine in January 2024[12] - Xtep's "160X" running shoes have helped 83 athletes win 370 championships and set multiple records[11] - In 2023, China hosted 580 road running events with a total of 5.5 million participants, indicating a strong recovery in marathon events[13] - Domestic brands accounted for over 50% of the wearing rate in key marathon events in China, surpassing international brands in some cases[13] - Xtep running shoes achieved a wearing rate of 41.8% among all runners and 43.8% among sub-three-hour runners at the 2024 Xiamen Marathon[15] - Xtep maintained the top wearing rate among all and sub-three-hour runners in key Chinese marathons in 2023, with rates of 31% in Xiamen, 28% in Beijing, and 36% in Shanghai[16] - The "160X" series running shoes helped 83 Chinese athletes win 370 championships by the end of 2023[17] - Xtep launched the "260X" carbon plate running shoe in December 2023, featuring a 14.5% increase in propulsion compared to the "260 2.0" model[19] - The "360X" carbon plate running shoe, launched in March 2024, improved stability by 4.2% compared to the "360" series[20] - Xtep sponsored 24 marathon events in 2023, including the Xiamen Marathon for the 16th consecutive year[21] - As of December 31, 2023, Xtep had 65 running clubs in mainland China with over 2 million members[22] - The company launched new basketball series in 2023, including "逆天一代," "凌刃1.0," "遊雲8 PRO," and "御風2.0," with endorsements from professional basketball player Malik Beasley[25] - The company launched the "New D Ball" eco-friendly series and "Half Sugar" women's series, incorporating recycled coffee grounds into products, resonating strongly with young consumers[26] - As of December 31, 2023, the company had 6,571 adult brand stores in mainland China and overseas, an increase from 6,313 stores in the previous year[27] - The company's children's brand, Xtep Kids, expanded to 1,703 stores in mainland China as of December 31, 2023, up from 1,520 stores in the previous year[28] - The upgraded "Xtep 100 2.0 PRO" flagship running shoe, featuring "XTEP ACE" cushioning technology, was recognized by top universities and contributed to a championship win in a major race[29] - The company sponsored the 2023 China Athletics Mass Standard Campus Series, supporting 1,500 finalists and promoting youth sports participation across 24 provinces and 72 cities[30] - The professional sports division, led by Saucony, saw a 98.9% increase in revenue to RMB 795.5 million, accounting for 5.5% of the group's total revenue[31] - Saucony expanded its retail network in China, with 110 stores as of December 31, 2023, and launched new products like the "ENDORPHIN ELITE" and "KINVARA PRO"[32] - Merrell, another brand under the company, collaborated with JEEP to launch the "Merrell X JEEP MOAB 3" and introduced new winter products featuring eco-friendly materials[33] - Saucony's product line includes competition racing and training shoes priced at RMB 2,099 and RMB 1,699 respectively, with other series like commuting, leisure, and retro styles ranging from RMB 599 to RMB 1,699[34] - In 2023, the fashion sports segment revenue increased by 14.3% to RMB 1,602.6 million, accounting for 11.2% of the group's revenue, with domestic revenue surging 224.3%[35] - K-Swiss achieved annual store efficiency exceeding RMB 10 million in one of its trial stores in Changchun, and expanded to 101 brand stores in the Asia-Pacific region, including mainland China, by the end of 2023[36] - Palladium expanded its presence in high-tier cities in mainland China, opening its first store in South China at Shenzhen MixC, totaling 94 brand stores in the Asia-Pacific region by the end of 2023[36] - K-Swiss sponsored major tennis events, including the 2023 Zhuhai Tennis Championship and the 2024 Hong Kong Tennis Open, enhancing its brand influence in professional tennis[37] - Palladium collaborated with KARL LAGERFELD and Hello Kitty, launching co-branded series that blend retro sportswear with contemporary fashion trends[37] - The company's total revenue for 2023 increased to RMB 14.345 billion, up 10.9% from RMB 12.930 billion in 2022, driven by strong demand for sports products and growth in the children's business[48][50] - Footwear revenue accounted for 57.0% of total revenue in 2023, reaching RMB 8.172 billion, a 5.3% increase from 2022[48] - Apparel revenue grew significantly by 20.6% to RMB 5.904 billion in 2023, representing 41.1% of total revenue[48] - The professional sports segment saw the highest revenue growth at 98.9%, reaching RMB 795.5 million in 2023[49] - Gross margin improved to 42.2% in 2023, up 1.3 percentage points from 40.9% in 2022, with apparel gross margin increasing by 1.6 percentage points to 42.9%[51] - The company's production facility in Fujian Province is undergoing second-phase construction, with 35,000 square meters expected to be completed by August 2024[45] - The company's logistics park in Fujian Province, with a total planned construction area of 240,000 square meters, is currently under construction[45] - As of December 31, 2023, the company had approximately 9,100 employees, with production employees accounting for 56.8% of the workforce[46] - The company's talent center provided over 430,000 hours of online and offline training to employees in 2023[46] - The company launched its first low-carbon running club in Shanghai in November 2023, using innovative materials to achieve zero carbon emissions[43] - Gross profit margin increased by 1.3 percentage points to 42.2% (2022: 40.9%), driven by higher-margin functional products and significant improvement in the fashion sports segment[52] - Other income and net gains increased mainly due to higher government subsidies, reaching RMB 284.2 million (2022: RMB 178.2 million)[53] - Sales and distribution expenses rose to RMB 3,369.0 million (2022: RMB 2,690.2 million), accounting for 23.5% of total revenue (2022: 20.8%), primarily due to increased advertising and promotion costs[54] - R&D expenses increased to RMB 398.0 million (2022: RMB 299.0 million), representing 2.8% of total revenue (2022: 2.3%), mainly for new product development and production technology[55] - Net finance costs increased to RMB 145.5 million (2022: RMB 91.2 million), driven by higher bank loan interest expenses[56] - Operating profit margin remained stable at 11.0%, with the professional sports segment showing a significant turnaround[57] - Net profit attributable to ordinary shareholders increased by 11.8% to RMB 1,030.0 million (2022: RMB 921.7 million), with a net profit margin of 7.2% (2022: 7.1%)[60] - Total dividend for 2023 was 21.7 HK cents per share (2022: 20.1 HK cents), maintaining a payout ratio of 50.0%[61] - Operating cash cycle increased to 83 days (2022: 67 days), mainly due to an 8-day increase in trade receivables turnover days[62] - Notes receivable increased to RMB 457.0 million (2022: RMB 403.2 million), with a turnover period of 11 days (2022: 11 days)[63] - Cash and cash equivalents decreased to RMB 3,294.6 million as of December 31, 2023, compared to RMB 3,414.2 million in 2022, primarily due to net cash outflows from investing and financing activities[64] - Net cash and cash equivalents (including pledged bank deposits and time deposits, minus bank borrowings and convertible bonds) stood at RMB 932.1 million as of December 31, 2023, down from RMB 1,225.7 million in 2022[64][65] - The company's total assets increased to RMB 17,325.4 million as of December 31, 2023, up from RMB 16,493.5 million in 2022, with net asset value rising by 7.4% to RMB 8,923.3 million[66] - The company's debt ratio increased to 20.3% as of December 31, 2023, compared to 19.6% in 2022[65] - The company recorded a trade receivables impairment of RMB 22.2 million for the year ended December 31, 2023, up from RMB 19.5 million in 2022[67] - The company completed the acquisition of a 40% ownership interest in Saucony Asia IP Holdco and established a new joint venture, XMS Sports Co. Limited, to further develop the Saucony and Merrell brands in Mainland China, Hong Kong, and Macau[70] - The company's total number of employees decreased to approximately 9,100 as of December 31, 2023, from 9,800 in 2022, with 56.8% being production employees[72] - The company's professional sports segment reported revenue of RMB 795.5 million for the year ended December 31, 2023, with a gross margin of 40.0% under reported figures and 55.6% under non-GAAP measures[74] - Revenue for the year reached 400.0 million, with a gross profit of 171.0 million, resulting in a gross margin of 42.7%[75] - Operating loss for the year was 67.2 million, with an operating loss margin of -16.8%[75] - The company held less than 50% equity in certain entities within its professional sports division, accounting for them as associates under HKFRS[75] - The company organized 29 reverse roadshows to deepen analysts' and investors' understanding of its operations, including the first running research laboratory in mainland China[81] - The company participated in numerous investor strategy meetings and non-deal roadshows across North America, Europe, and Asia-Pacific, including key markets like China, Hong Kong, Japan, and Singapore[78] - The company received multiple awards, including being named the Most Honored Company (Overall) and Best CEO (Sell Side) by Institutional Investor[82] - The company was recognized for its investor relations efforts, winning Best Investor Relations Company (Mid-Cap) and Best Investor Relations Team (Mid-Cap) at the Hong Kong Investor Relations Association Awards[82] - The company held a 15th-anniversary celebration event in June 2023, sharing future development strategies with investors and partners[76] - The company resumed offline press conferences and analyst briefings in August 2023, following the release of its interim results[76] - Basic earnings per share for 2023: Interim RMB 26.36 cents, Final RMB 40.76 cents[84] - Total annual dividend for 2023: 21.7 HK cents (Interim: 13.7 HK cents, Final: 8.0 HK cents)[84] - Market capitalization as of December 31, 2023: HKD 11,648,826,283[83] - Number of issued shares as of December 31, 2023: 2,641,457,207[83] - Key investor dates: Annual results announcement on March 18, 2024, and Annual General Meeting on May 3, 2024[85] - Proposed final dividend for 2023 to be distributed on June 28, 2024[85] - Founder and CEO Ding Shuibo has over 30 years of experience in the sports goods industry[86] - Ding Shuibo has completed multiple executive education programs, including at Harvard University and Tsinghua University[86] - Ding Shuibo has received numerous awards, including the 2023 Influential Business Leader award[87] - Ding Shuibo holds several public positions, including Vice Chairman of the China Athletics Association[88] - Chen Weicheng, aged 68, serves as the non-executive director and chairman of the audit and sustainability committees, with over 40 years of experience in financial management, corporate finance, mergers and acquisitions, and strategic development[91] - Bao Mingxiao, aged 62, is an independent non-executive director with over 36 years of experience in sports education and has held significant roles in national sports research and policy[92] - Hu Jiacheng, aged 55, is an independent non-executive director and chairman of the remuneration committee, with extensive experience in accounting, economics, and finance, and has served on the boards of several listed companies[92] - Chen Qihua, aged 58, is an independent non-executive director and chairman of the audit committee, with over 26 years of financial and management experience and holds multiple senior memberships in professional accounting and governance bodies[94] - Yang Lubin, aged 46, serves as the company secretary and authorized representative, also holding the position of CFO and group vice president, with over 20 years of experience in audit, corporate finance, and financial management[95] - The company is committed to establishing good corporate governance practices and procedures, emphasizing internal control, fair disclosure, and accountability to all shareholders[96] - The company adheres to all provisions of the Corporate Governance Code except for provision C.2.1, which requires the separation of Chairman and CEO roles. Currently, Mr. Ding Shuibo serves as both Chairman and CEO, leveraging his extensive experience in the sports goods industry to oversee the company's overall strategy and business management[97] - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions. All directors confirmed compliance with the standard code during the year ended December 31, 2023[98] - The company's core values of perseverance, innovation, integrity, and win-win have been instrumental in its success and reputation as a premium sports brand. It operates a vast global distribution network across Asia-Pacific, North America, Europe, the Middle East, and Africa (EMEA)[99] - The Board of Directors consists of three executive directors, one non-executive director, and three independent non-executive directors as of December 31, 2023[100] - All directors attended 7 out of 7 board meetings and 1 out of 1 shareholders' meeting during the year ended December 31, 2023[104] - The Board of Directors is responsible for the overall management and strategic development of the company, decision-making on business and investment plans,

Financial Data and Key Metrics Changes - In 2023, total revenue grew by 10.9% to JPY 14.346 billion, marking a historical high [11] - Core Xtep brand revenue increased by 7.4% to JPY 11.947 billion, while new brands, including Saucony and Merrell, saw revenue growth of nearly 100% at almost JPY 800 million [12] - The group's profit reached a historical high of JPY 1.03 billion, up 11.8% year on year, with a net profit margin of 7.2% [13][17] - Inventory decreased significantly by 21.6% to JPY 1.794 billion, indicating improved inventory management [14][21] Business Line Data and Key Metrics Changes - The core Xtep brand achieved a retail sell-through growth of 20% year on year, with inventory turnover days at a healthy level of 4 to 4.5 months [6][10] - The Professional Sports segment, including Saucony and Merrell, reported nearly 100% revenue growth, with Saucony becoming the first profitable brand among the four brands [12][26] - The Athletia segment experienced a revenue growth of 14.3% [12] Market Data and Key Metrics Changes - In the China region, Saucony's revenue growth exceeded 200%, reaching JPY 465 million [12] - The athleisure segment, including K Swiss and Palladium, saw a revenue growth of 14.3%, primarily driven by the Chinese market [27] - The gross margin for the athleisure segment improved from 37.6% to 44.8% due to increased direct-to-consumer (DTC) sales [28] Company Strategy and Development Direction - The company aims to maintain its position as the number one running brand in China, focusing on product innovation and expanding its market segment [35][50] - The strategy includes leveraging synergies between core and new brands, with a focus on high-end markets for new brands [8][51] - The company plans to continue enhancing its offline store experience while expanding its online presence [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2023 was a challenging year but expressed confidence in achieving considerable growth despite a difficult economic environment in 2024 [17][24] - The target for 2024 is a revenue growth of no less than 10%, with a focus on maintaining healthy inventory levels [18][24] - Management noted that the consumption situation remains uncertain, but they are prepared to react quickly to market changes [24] Other Important Information - The company has maintained a consistent dividend payout ratio of 50% since its listing in 2008 [15] - Operating cash net inflow grew by 1.2 times to JPY 1.255 billion, exceeding net profit [15] - The company has successfully remitted JPY 1 billion to Hong Kong for dividend payouts and debt repayment [20] Q&A Session Summary Question: What are the growth prospects for Saucony and Merrell? - Management indicated that Saucony and Merrell are expected to achieve significant growth in 2024, with sales targets set at 30% to 40% growth [26] Question: How does the company plan to manage inventory levels? - The company emphasized the importance of maintaining healthy inventory levels and has successfully reduced inventory by 21.6% [14][21] Question: What are the expectations for the athleisure segment in 2024? - Management stated that while the athleisure segment will continue to incur losses, they will control the amount of loss to ensure it does not exceed previous years [30]

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 6,522.4 million, representing a 14.8% increase compared to RMB 5,683.6 million in the same period of 2022[8]. - Gross profit for the same period was RMB 2,797.1 million, with a gross margin of 42.9%, up from 42.0% in 2022[16]. - Profit attributable to equity holders was RMB 665.4 million, a 12.7% increase from RMB 590.4 million in the previous year[9]. - Basic earnings per share increased to RMB 26.36, compared to RMB 23.47 in 2022[16]. - Operating profit rose by 7.0% to RMB 986.6 million, compared to RMB 921.7 million in the same period last year[23]. - The group achieved a gross profit margin of 42.9%, slightly up from 42.0% in the first half of 2022[23]. - The group reported a net cash flow from operating activities of RMB 265.3 million, a significant improvement from a cash outflow of RMB 268.5 million in 2022[82]. - The company reported a profit of RMB 671,197,000 for the six months ended June 30, 2023, an increase of 14% compared to RMB 589,063,000 in the same period of 2022[120]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.137 per share, with a payout ratio of 50%[11]. - The board proposed an interim dividend of HKD 0.137 per share, an increase from HKD 0.130 per share in 2022[76]. - The interim dividend declared was HKD 0.137 per share, totaling approximately RMB 332,736,000, compared to RMB 297,110,000 for the same period last year, an increase of 12%[157]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 16,623.2 million, with non-current assets at RMB 4,648.8 million[17]. - Current liabilities increased to RMB 5,832.5 million from RMB 4,916.5 million in 2022, resulting in a debt ratio of 19.7%[17]. - The group's total liabilities decreased to RMB 7,825.7 million as of June 30, 2023, down from RMB 8,186.8 million as of December 31, 2022, a reduction of 4.4%[84]. - The net asset value of the group increased by 5.9% to RMB 8,797.5 million as of June 30, 2023, compared to RMB 8,306.7 million as of December 31, 2022[84]. - The company's total liabilities decreased from RMB 6,644,784,000 at the end of 2022 to RMB 5,832,513,000 as of June 30, 2023, a reduction of about 12%[124]. Inventory and Receivables - The company reported an average inventory turnover period of 115 days, compared to 106 days in 2022[17]. - The average trade receivables turnover period was 106 days, slightly up from 102 days in the previous year[17]. - The rolling overall working capital turnover days increased to 88 days, up from 68 days in 2022, with inventory turnover days rising to 107 days[77]. - As of June 30, 2023, accounts receivable amounted to RMB 427.4 million, with a turnover period of 12 days, down from 14 days in 2022[78]. Market and Strategic Initiatives - The company remains optimistic about the medium to long-term prospects of the sports goods industry in mainland China[22]. - The company aims to leverage the growing running culture and favorable national policies to drive future business growth[28]. - The company plans to accelerate store openings in high-tier cities and adjust product structures according to brand characteristics to enhance market presence[61]. - The collaboration between the main brand and Saucony is expected to drive growth through product innovation and retail network synergies[61]. Product Development and Innovation - The new "160X 5.0 PRO" running shoes feature a 20% improvement in propulsion compared to the previous model, "160X 3.0 PRO"[32]. - The "减震旋" and "騛速" series introduced in 2023 utilize advanced shock-absorbing technology for enhanced performance[36]. - The new basketball shoe "JLIN 3" features over 80% rebound capability and superior propulsion, utilizing "X-TEP BOOOM" technology[41]. - The company launched the flagship marathon carbon plate shoe "Endorphin Elite" and other models in the first half of 2023, catering to elite runners' needs[56]. Employee and Operational Insights - The company has approximately 9,300 employees as of June 30, 2023, a decrease from 9,800 employees at the end of 2022, with production staff making up 58.2% of the workforce[60]. - The group’s employee costs decreased slightly to RMB 652,769,000 in the first half of 2023 from RMB 677,646,000 in 2022, a decline of 4%[151]. Research and Development - Research and development costs increased to RMB 175.2 million, up from RMB 107.4 million in 2022, accounting for 2.7% of total revenue compared to 1.9% in 2022[70]. - Research and development costs rose to RMB 175,210,000 in the first half of 2023, compared to RMB 107,364,000 in 2022, marking an increase of 63%[151]. Environmental and Social Responsibility - The MSCI ESG rating was upgraded to "BBB," reflecting the company's commitment to sustainable practices and governance[26]. - The carbon footprint of the new PLA T-shirt series is reported to be 7.85 kg CO2 eq per piece, reducing emissions by approximately 47.7% compared to regular cotton T-shirts[50]. - The company announced a strategic cooperation agreement with the China Next Generation Education Foundation to donate RMB 100 million worth of sports goods over the next four years[51]. Share Capital and Ownership - The company has a total of 2,636,716,923 shares issued as of June 30, 2023[100]. - Mr. Ding Shui Bo holds 1,294,741,000 shares, representing approximately 49.10% of the company's issued share capital[100]. - The company has adopted a share incentive plan effective from August 1, 2014, which will expire on August 1, 2024[107].

Financial Data and Key Metrics Changes - In the first half of 2023, the company's revenue was RMB 652 million, representing a 14.8% increase compared to the previous year [4][12] - Net profit increased by 12.7% to RMB 670 million, with a net profit margin of 10.2% [5][14] - The interim dividend was set at RMB 0.137 per share, with a payout ratio of 50% [5][12] Business Line Data and Key Metrics Changes - Revenue from core brands increased by 10.9% to RMB 543 million, accounting for 83.2% of total revenue [12][15] - The mass market segment saw a 15% growth, while the leisure and professional sports segments also reported significant increases [15][16] - K Swiss and Palladium brands experienced an 18.9% increase in sales, primarily driven by the Chinese market [16] Market Data and Key Metrics Changes - Retail sell-through for core brands increased by 20% in Q1 2023, with high double-digit growth continuing into Q2 [4][10] - The company reported a significant slowdown in growth starting in May, but maintained double-digit growth in July and August [10][11] - The company has 8,031 core XTEP branded stores, primarily located in Mainland China [13] Company Strategy and Development Direction - The company aims to strengthen its core brand strategy and enhance its R&D capabilities, particularly in the running segment [7][25] - There is a focus on nurturing new brands and expanding the ecosystem for running, aligning with national health and exercise policies [7][8] - The company plans to enhance its store experience and increase market share among younger consumers [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leading the sector despite potential challenges from consumption and the economy [8][43] - The company maintains a sales growth guidance of 15% to 20% for the year [44] - Management noted that while there are uncertainties in the global economy, the demand for value-for-money products in the mass market remains strong [43] Other Important Information - The company received an upgrade in its MSCI ESG rating from BB to BBB, the highest in the industry [12] - The company is committed to sustainability, with plans to donate RMB 100 million to support youth development in rural areas [31] Q&A Session Summary Question: What is the outlook for the company's sales growth? - The company remains confident in achieving a sales growth of 15% to 20% for the year despite market fluctuations [44] Question: How is the company addressing the challenges in the retail environment? - Management highlighted the focus on enhancing brand awareness through direct-to-consumer (DTC) channels and improving store experiences [37][38] Question: What are the company's plans for new product launches? - The company plans to continue launching innovative products, particularly in the running segment, to attract both professional and mass market consumers [25][26]

Financial Performance - Total revenue for the first half of 2023 reached RMB 6,522.4 million, representing a 14.8% increase compared to RMB 5,683.6 million in the same period of 2022[9]. - Net profit attributable to ordinary shareholders was RMB 665.4 million, up 12.7% from RMB 590.4 million in the first half of 2022[10]. - The gross profit margin improved to 42.9% in 2023 from 42.0% in 2022[14]. - Basic earnings per share increased to RMB 26.36, compared to RMB 23.47 in the previous year[14]. - Operating profit grew by 7.0% to RMB 986.6 million, compared to RMB 921.7 million in the same period last year[21]. - Profit attributable to equity holders increased by 12.7% to RMB 665.4 million, up from RMB 590.4 million in the first half of 2022[21]. - The company reported total revenue of RMB 6,522.4 million for 2023, a 14.8% increase from RMB 5,683.6 million in 2022, driven primarily by the performance of mass sports brands[60][62]. - Revenue from footwear reached RMB 3,889.3 million, accounting for 59.6% of total revenue, with a year-on-year growth of 15.1%[60]. - Total gross profit rose by 17.2% to RMB 2,797.1 million, with an overall gross margin of 42.9%[64]. Assets and Liabilities - Non-current assets rose to RMB 4,648.8 million, up from RMB 3,907.7 million in 2022[15]. - Current assets increased slightly to RMB 11,974.4 million from RMB 11,891.5 million in 2022[15]. - The total assets of the group increased to RMB 16,623.2 million as of June 30, 2023, compared to RMB 16,493.5 million as of December 31, 2022, representing a growth of 0.8%[79]. - The group's total liabilities decreased to RMB 7,825.7 million as of June 30, 2023, from RMB 8,186.8 million as of December 31, 2022, indicating a reduction of 4.4%[79]. - The debt ratio was reported at 19.7%, a slight increase from 18.9% in the previous year[15]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.137 per share, with a payout ratio of 50.0%[9]. - The company declared an interim dividend of HKD 0.137 per share, up from HKD 0.130 in the previous year, with a payout ratio of 50.0%[21]. - The company declared an interim dividend of HKD 0.137 per share, totaling approximately RMB 332,736,000, compared to RMB 297,110,000 for the same period in 2022, marking an increase in shareholder returns[139]. Market and Brand Performance - The company operates over 8,200 stores globally, with a strategic focus on mass sports, fashion sports, and professional sports segments[2]. - The main brand, Xtep, recorded a revenue growth of 10.9% to RMB 5,429.7 million, up from RMB 4,897.6 million in the previous year[21]. - The retail sales of the main brand in Q1 2023 showed a significant growth of approximately 20% year-on-year[20]. - The fashion sports segment reported a revenue increase of 18.9% to RMB 748.6 million, accounting for 11.5% of the group's total revenue in the first half of 2023[50]. - The professional sports segment achieved a revenue growth of 119.9% to RMB 344.2 million, representing 5.3% of the group's total revenue, and recorded a net profit of RMB 9.0 million for the first time[53]. Research and Development - Research and development costs rose to RMB 175.2 million, representing 2.7% of total revenue, up from 1.9%[67]. - The company is investing HKD 100 million in research and development for new technologies aimed at enhancing product performance[198]. Sustainability and Corporate Governance - The company's MSCI ESG rating was upgraded to "BBB" in July, reflecting its strong performance in environmental, social, and governance practices[24]. - The company is committed to enhancing the environmental, social, and governance performance of its suppliers to promote sustainable development in mainland China[24]. - The company launched a sustainable T-shirt series with a carbon footprint of only 7.85 kg CO2 eq per piece, reducing carbon emissions by approximately 47.7% compared to regular cotton T-shirts[48]. - The company has maintained compliance with all provisions of the corporate governance code throughout the reporting period[89]. Employee and Operational Metrics - The company has approximately 9,300 employees as of June 30, 2023, a decrease from 9,800 employees at the end of 2022, with production staff making up 58.2% of the workforce[58]. - The average inventory turnover days increased to 115 days from 106 days in 2022[15]. - Selling and distribution expenses rose to RMB 1,510.3 million, accounting for 23.2% of total revenue, up from 18.4%[66]. Future Outlook - The company remains optimistic about the medium to long-term prospects of the sports goods industry in mainland China[20]. - The company anticipates continued growth in the running sector, supported by the recovery of marathon events post-COVID-19, and aims to strengthen its market share in this area[59]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[115].