Investment Rating - The report maintains a "Buy" rating for the company [3][5]. Core Views - The company has shown steady growth in Q1 2025, with a single-digit percentage increase in revenue for the main brand, and a healthy inventory turnover of approximately 4 months [1][2]. - The e-commerce segment is expected to perform exceptionally well, with anticipated growth rates exceeding 20% due to the influence of the Spring Festival [1][2]. - The company is focusing on optimizing its offline store structure while enhancing the efficiency of its retail operations, with plans to initiate a Direct-to-Consumer (DTC) transformation in the second half of 2025 [1][2]. - The subsidiary brand, Saucony, has become a new growth driver, with a revenue increase of over 40% in Q1 2025 and a projected revenue exceeding 1 billion yuan in 2024 [2]. - The company expects a revenue growth of around 7% and a net profit growth of approximately 10% for the year 2025 [2]. Financial Summary - The company’s projected financials for 2025 include a revenue of 14.519 billion yuan and a net profit of 1.365 billion yuan, reflecting a year-on-year growth of 6.9% and 10.3% respectively [4]. - The earnings per share (EPS) for 2025 is estimated at 0.49 yuan, with a price-to-earnings (P/E) ratio of 9 times [3][4]. - The company’s net asset return (ROE) is projected to be 13.6% in 2025, with a gradual decline to 12.4% by 2027 [4].

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][3][7] Core Views - The company's main brand retail sales increased in the mid-single digits year-on-year in Q1 2025, with retail discounts ranging from 7.0 to 7.5, and a channel inventory turnover ratio of 4 months [2][3][4] - The Saucony brand saw retail sales growth exceeding 40% across all channels [2][3][6] - The management maintains a target of over 10% profit growth for 2025, with plans to transform 400-500 stores to a direct-to-consumer (DTC) model by the end of 2026 [6] Summary by Sections Sales Performance - In Q1 2025, the main brand's retail sales increased in the mid-single digits, with online sales growing over 20% and offline sales showing low single-digit growth, primarily affected by foot traffic [4] - The retail discount for the main brand remained stable at 7.0-7.5, with an inventory turnover ratio of 4 months, indicating healthy inventory levels [5] Brand Growth - Both Saucony and Myle's brands experienced growth exceeding 40% in Q1 2025 [3][6] - The company focuses on the running category, leveraging its expertise to achieve steady sales growth for the main brand and rapid growth for professional sports brands [9] Financial Projections - The company forecasts net profits of 1.402 billion, 1.485 billion, and 1.600 billion yuan for 2025, 2026, and 2027 respectively, representing year-on-year growth rates of 13.2%, 5.9%, and 7.7% [10][14] - The reasonable valuation range is maintained at 6.1-6.6 HKD, corresponding to a PE ratio of 11-12x for 2025 [9][10]

证券研究报告|港股公司点评研究报告 [Table_Date] 2025 年 04 月 17 日 [Table_Title] Q1 主品牌中单位数增长，索康尼超 40% [Table_Title2] 特步国际(1368.HK) | [Table_DataInfo] 评级： | 买入 | 股票代码： | 1368 | | --- | --- | --- | --- | | 上次评级： | 买入 | 52 周最高价/最低价(港元)： | 7.13/4.15 | | 目标价格： | | 总市值(亿港元) | 130.68 | | 最新收盘价： | 4.71 | 自由流通市值(亿港元) | 130.68 | | | | 自由流通股数(百万) | 2,774.56 | [Table_Summary] 事件概述 公司公告 2025Q1 运营数据：Q1 主品牌零售流水同比中单位数增长，折扣为七到七五折，渠道库存为约四 个月，25Q1 索康尼零售销售实现约 40%同比增长。 分析判断: 25Q1 主品牌零售流水同比中单位数增长（1）分渠道来看，25Q1 零售流水中单位数增长，增速环比较 24Q4 高单位数增长有所下降；（2）从 ...

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a year-on-year growth in retail sales for its main brand in Q1 2025, with a discount range of 70% to 75% and channel inventory at approximately four months [2][3] - Saucony, a brand under the company, achieved about 40% year-on-year growth in retail sales in Q1 2025, benefiting from its strong performance in professional running and outdoor segments [2][3] Summary by Sections Event Overview - The company announced its Q1 2025 operational data, highlighting a year-on-year increase in retail sales for its main brand, with discounts maintained at 70% to 75% and channel inventory around four months [2] Analysis and Judgment - In Q1 2025, the retail sales growth rate for the main brand showed a decline compared to Q4 2024, but the discount levels remained stable [3] - The company’s retail discount rates were consistent across quarters, with channel inventory turnover slightly improving compared to the previous year [3] - Saucony's growth is attributed to its strategic positioning in high-end markets and its brand promotion efforts, including celebrity endorsements and product innovation [3] Investment Recommendations - Short-term investments in the main brand's DTC strategy may negatively impact sales but are expected to enhance consumer interaction and brand loyalty in the long run [4] - The company plans to expand its product range and open approximately 30 new Saucony stores in high-end markets [4] - The financial forecasts for 2025, 2026, and 2027 predict revenues of 142.86 billion, 155.58 billion, and 172.51 billion respectively, with corresponding net profits of 13.74 billion, 15.11 billion, and 16.64 billion [4]

Market Performance - The Shanghai Composite Index rose by 0.26% to 3276 points, while the Shenzhen Component fell by 0.85% and the ChiNext Index dropped by 1.21%[1] - The Hang Seng Index closed down 1.91% at 21056.98 points, with the Hang Seng Tech Index declining by 3.72% and the Hang Seng China Enterprises Index down by 2.55%[1] - The total market turnover in Hong Kong was 220 billion HKD[1] Economic Indicators - U.S. retail sales increased significantly in March, with a month-on-month growth of 1.4%[1] - The U.S. Producer Price Index (PPI) for March showed a year-on-year increase of 2.7%[19] - China's GDP growth for Q1 was reported at 5.4% year-on-year[19] Federal Reserve and Trade Relations - Federal Reserve Chairman Jerome Powell downplayed interest rate cut expectations, emphasizing the need to prevent tariffs from causing persistent inflation[1] - China expressed an open attitude towards trade negotiations with the U.S., contingent on the U.S. showing more respect and appointing a liaison for talks[1][14] Sector Performance - Precious metals and hotel sectors showed strong performance, while the technology sector faced declines in both Hong Kong and the U.S. markets[1] - Shenzhen Holdings reported a 83.5% year-on-year increase in contract sales for Q1, amounting to approximately 3.133 billion RMB[12]

Summary of Conference Call Company and Industry - The conference call involved **Xtep International**, a company in the **sportswear industry** focusing on running products and brand development. Key Points and Arguments 1. **Sales Performance**: The sales trend is in line with expectations, with healthy levels of discounts and inventory management [2][3] 2. **Brand Strengthening**: The company has been actively promoting new brands, particularly Saucony, through enhanced product offerings and channel strategies [2][4] 3. **Product Mix**: The goal is to increase the apparel segment to approximately 20% of total sales, with aspirations to reach 30% in the future [3] 4. **Store Expansion**: New store concepts, such as the "Moon Concept Store," have been launched to enhance brand image and attract customers [3] 5. **Saucony's Growth Targets**: Saucony aims to double its revenue and operational efficiency over the next three years, with projected revenue growth from 1 billion to over 2 billion [4] 6. **Direct-to-Consumer (DTC) Strategy**: The company is initiating a DTC strategy, planning to reclaim 100 to 400 stores over the next two years, which will involve significant costs [12][13] 7. **Cash Management**: The company has been reducing cash reserves, primarily due to high interest rates in Hong Kong, and is focusing on improving operational efficiency through DTC [11][12] 8. **Running Product Matrix**: The running shoe segment has seen over 25% growth, with a significant portion being functional running shoes [6][7] 9. **Market Positioning**: Xtep has established a strong presence in marathons, with the highest wearing rate among participants, surpassing both international and domestic brands [8][9] 10. **Future Plans**: The company is cautious about expanding into new areas like outdoor sports, focusing instead on consolidating its position in marathons [25][26] 11. **International Expansion**: There are plans to explore markets in Southeast Asia, the Middle East, and Russia, emphasizing the importance of cost-effectiveness in pricing strategies [30][31] Other Important but Overlooked Content 1. **Brand Image and Consumer Perception**: The company is leveraging partnerships with business schools to enhance brand perception among elite consumers [5] 2. **Operational Challenges**: The transition to DTC may lead to short-term revenue impacts, but long-term benefits are anticipated [14][15] 3. **Franchise and Dealer Relationships**: The company is managing a complex relationship with its dealers, with some looking to retire, prompting the DTC shift [11][16] 4. **Future Leadership**: Discussions about succession planning and leadership roles within the company were mentioned, indicating a focus on long-term stability [26][27] This summary encapsulates the key insights from the conference call, highlighting the strategic direction and operational focus of Xtep International in the competitive sportswear market.

Group 1 - The latest research from Yale University estimates that U.S. tariff policies will result in an average annual loss of $4,700 for American households, with significant impacts on clothing prices, which are expected to rise by 64% in the short term and 27% in the long term [1] - Currently, only 2.5% of clothing and 1% of footwear in the U.S. is domestically manufactured, with Vietnam being a major source of imports for clothing and footwear [1] - The U.S. is the largest market for Vietnam's textile and apparel exports, which are projected to reach $44 billion in 2024, with major brands like Nike and Lululemon having over 35% of their production capacity in Vietnam [1] Group 2 - According to a report from Galaxy Securities, domestic textile companies are shifting from capacity growth to high-quality growth, focusing on high-value customers and mid-to-high-end products, which allows for some price adjustment flexibility [2] - The international capacity layout advantages of textile companies are becoming more evident, and the industry is expected to see a consolidation as smaller companies struggle to absorb tariff costs, leading to orders concentrating among leading firms with overseas layouts [2] - Domestic textile manufacturing leaders are focusing on overseas markets with lower exposure to U.S. exports and strong customer ties, which provides resilience amid industry fluctuations [2] Group 3 - Listed companies in the apparel sector on the Hong Kong Stock Exchange include brand companies such as Toppan (06110), Samsonite (01910), Anta Sports (02020), Li Ning (02331), Xtep International (01368), and Bosideng (03998), as well as manufacturing companies like Jiu Xing Holdings (01836), Shenzhou International (02313), and Yue Yuen Industrial (00551) [3]

Investment Rating - The industry investment rating is maintained as "Positive" [5] Core Insights - The report indicates that major US consumer companies are cautious about future fiscal year expectations, primarily due to tariff pressures and consumer downgrading trends in the US market. However, companies like Walmart and Lululemon express a more optimistic outlook for the Chinese market [3][23] - Recommendations include buying leading sportswear brand Anta Sports (02020), and considering Li Ning (02331), Xtep International (01368), and Tabo (06110) for buying or holding. Additionally, long-term prospects are favorable for resilient leading manufacturers such as Shenzhou International (02313), Weixing Co., Ltd. (002003), and Huali Group (300979) [3][23] Summary by Sections US Consumer Giants Performance - Walmart's FY26 revenue growth guidance is 3-4%, with a same-store sales increase of 23.1% in FY25Q4, driven by strong e-commerce and new store openings [10][13] - Target expects FY25 revenue growth of about 1%, with same-store sales remaining flat, facing pressure from tariffs and operational costs [14][15] - Dollar General anticipates FY25 revenue growth of 3.4-4.4%, with core consumers facing economic challenges and a notable trend of consumer downgrading [17][18] - Nike projects a mid-double-digit revenue decline for FY25Q4, with significant inventory issues and a 15% revenue drop in the Greater China region [19][20] - Lululemon expects FY25 revenue growth of 5-7%, with a strong growth forecast of 25-30% in the Greater China region [21][22] Investment Recommendations - The report suggests a cautious approach towards US consumer giants due to tariff pressures and consumer behavior changes, while highlighting positive growth prospects in China for certain brands [3][23]

Investment Rating - The industry investment rating is "Positive" and maintained [8] Core Insights - The brand sector shows steady recovery in Q1 under consumer promotion policies, with most companies achieving positive growth, outperforming expectations. The performance varies across sub-sectors, with mid-to-high-end menswear showing strong growth, sports retail maintaining steady growth, and mass brands also experiencing a rebound. Profitability varies due to differentiated cost control and operational leverage [2][4][16] - The manufacturing sector faces short-term pressure as downstream inventory has reached healthy levels, but demand from major export countries is weakening. In Q1, demand from the US and Japan shows marginal weakening. Most brands and retailers have returned to healthy inventory levels, but weak overseas demand is expected to limit replenishment momentum, affecting order elasticity in the related supply chain [2][4][17] Summary by Relevant Sections Brand Sector - Q1 retail sales of clothing and textiles increased by 3.3% year-on-year, with a month-on-month increase of 3.6 percentage points [20] - Mid-to-high-end menswear brands are leading in retail growth, while the sports sector continues to show steady growth. Mass apparel brands are also experiencing a recovery [20][27] Manufacturing Sector - The manufacturing sector is under short-term pressure due to weak demand from major export markets and healthy inventory levels. The overall order placement is cautious, with expectations of further pressure from tariff forecasts [4][28] Key Company Performance - **Wanjian Medical**: Expected Q1 revenue growth of 30%-40%, driven by non-woven products and strong brand power in sanitary napkins [5][40] - **Zhejiang Natural**: Anticipated Q1 revenue growth of 25%-35%, with net profit expected to increase by 50%-100% [5][40] - **Weixing Co.**: Expected Q1 revenue growth of 10%-15% and double-digit net profit growth [5][40] - **Anta Sports**: Expected Q1 revenue growth in the high single digits, with FILA brand showing mid-to-low single-digit growth [6][20] - **361 Degrees**: Anticipated Q1 revenue growth of 10%-15% for adult apparel and around 15% for children's clothing, with e-commerce growth of about 20% [6][20] Inventory and Demand Trends - The inventory levels of most brands and retailers have returned to a healthy state, with the wholesale inventory destocking nearing completion. However, weak overseas demand is expected to limit replenishment momentum [4][28]

Investment Rating - The report recommends "Buy" for leading sports brands like Anta Sports and Li Ning, indicating strong operational resilience and growth potential in a challenging retail environment [5][27]. Core Insights - The sports industry demonstrated strong operational resilience in 2024, with major companies like Anta Sports, Li Ning, Xtep International, and 361 Degrees showing varied revenue growth rates of +13.58%, +3.90%, -5.36%, and +19.59% respectively [1][7]. - The report anticipates continued stable growth for leading sports brands in 2025, with projections for Anta's main brand to maintain high single-digit growth and FILA to achieve mid-single-digit growth [13][14]. Summary by Sections Performance Review - Anta Sports and FILA maintained steady operations, with revenue reaching 70.826 billion CNY, while 361 Degrees capitalized on lower-tier markets, achieving a revenue increase of 19.59% to 10.074 billion CNY [1][10]. - Li Ning's revenue remained stable, with a focus on e-commerce and product diversification, leading to a 10.3% increase in online sales [9]. Marketing and Inventory Management - Anta Sports increased its sales expense ratio to 36.21%, reflecting higher investments in new product promotions and channel expansion [2][16]. - Inventory turnover days improved for Xtep International, decreasing by 10 days to 79 days, while 361 Degrees saw an increase in turnover days due to strategic inventory buildup for e-commerce [2][17]. Manufacturing Sector - Major manufacturers like Wah Lee Group and Shenzhou International reported revenue growth of 19.35% and 14.79% respectively, driven by increased demand and efficient operations [3][22]. - The overall profitability of the manufacturing sector improved, with Wah Lee's net profit margin at 15.36% and Shenzhou's gross margin increasing to 28.10% [20][21]. Investment Recommendations - The report suggests that leading sports brands like Anta Sports and Li Ning are well-positioned to outperform the industry due to their operational strengths and market strategies [5][27]. - For the manufacturing sector, Wah Lee Group is recommended as a strong player, with potential for increased market share amid industry consolidation due to external pressures [5][27].