Financial Performance - Total revenue for the year reached RMB 13,577 million, representing a growth of 6.5%[8] - Operating profit amounted to RMB 1,966 million, an increase of 9.3%[8] - Profit attributable to ordinary equity holders was RMB 1,238 million, reflecting a growth of 20.2%[8] - Revenue for 2024 reached RMB 13,577.2 million, a 6.6% increase from RMB 12,742.9 million in 2023[27] - Gross profit for 2024 was RMB 5,865.4 million, reflecting a gross margin of 43.2%, up from 41.8% in 2023[27] - Operating profit increased to RMB 1,965.5 million, with an operating margin of 14.5%, compared to 14.1% in the previous year[27] - Net profit attributable to equity holders was RMB 1,238.4 million, resulting in basic earnings per share of RMB 48.67, up from RMB 40.76 in 2023[27] - The group reported a loss from discontinued operations of RMB 67.1 million, a significant reduction from RMB 224.3 million in 2023[145] - The net profit attributable to equity holders increased by RMB 208.4 million or 20.2% to RMB 1,238.4 million, with a net profit margin improving to 9.1% from 8.1%[146] Dividends and Payouts - The final dividend per share declared was 9.5 HK cents, with a full-year payout ratio of 138.2%[8][9] - The company declared a final dividend of HKD 0.095 per share, with a total annual dividend payout ratio of 138.2%, significantly up from 50.0% in 2023[32] - Total dividends for 2024 amount to HKD 0.698, a significant increase from HKD 0.217 in 2023, representing a payout ratio of 138.2%[149] - The company maintained a high dividend payout ratio of no less than 50% over the past five years, demonstrating a commitment to shareholder returns[150] Strategic Initiatives - The company completed the strategic sale of K•SWISS and Palladium, focusing resources on the main brand, Saucony, and Merrell[23] - The company plans to leverage government economic stimulus measures to boost market confidence and consumer demand[31] - The company plans to strengthen its direct-to-consumer (DTC) strategy to enhance brand loyalty and operational efficiency, optimizing retail channel structures for better market insights[108] - The company is expanding its market presence with new flagship and concept stores, enhancing customer experience and brand visibility[89] Brand Performance - Retail sales for the main brand and Saucony recorded high single-digit and over 60% growth, respectively, indicating strong market performance[31] - Saucony, a brand under the group, achieved over RMB 1 billion in revenue for the first time in 2024, marking a significant milestone[37] - The professional sports division, Saucony, achieved revenue of RMB 1,250.3 million in 2024, a year-on-year increase of 57.2%[88] - Saucony's operating profit increased significantly to RMB 78.2 million in 2024, compared to RMB 8.4 million in 2023[88] Market Trends and Opportunities - The outdoor sports market in China presents growth opportunities for the brand Maile, which is actively expanding its e-commerce business[38] - The number of marathons held in China reached 671 in 2024, with participation exceeding 6.56 million, indicating a strong running trend[41] - E-commerce in China saw a significant recovery, with the logistics index reaching 113.7 points, a 3.6-point increase from the previous year[43] - The group anticipates steady growth in sports goods demand, supported by government measures to stimulate consumption[109] Operational Efficiency - The average inventory turnover days improved to 68 days in 2024, down from 90 days in 2023, enhancing operational efficiency[27] - The overall working capital turnover days increased to 87 days in 2024 from 83 days in 2023[151] - Inventory turnover days decreased by 22 days to 68 days in 2024, while trade receivables turnover days increased by 14 days to 120 days[159] Research and Development - Research and development expenses accounted for 2.9% of revenue, slightly down from 3.1% in 2023, reflecting a focus on cost management[27] - The new running shoe technology incorporates PISA supercritical foam for high rebound and cushioning, significantly reducing energy loss compared to traditional materials[77] Community Engagement and CSR - The company donated over RMB 58 million in sports goods and cash in 2024, including RMB 10 million in winter supplies for earthquake relief in Tibet[98] - The company provided over 710,000 hours of training to employees through its talent center, focusing on professional skills, leadership, and cultural operations[106] Investor Relations - The company actively communicated with investors to restore confidence amid macroeconomic uncertainties, enhancing transparency and two-way communication[178] - The company participated in 350 investor meetings throughout the year, including both online and offline events across North America, Europe, and Asia-Pacific[184] Future Outlook - Future outlook remains positive with expectations of stable growth in the sports industry driven by increased health awareness and sports demand[31] - The company plans to continue expanding its market presence and enhancing its retail management capabilities[179]

Investment Rating - The report maintains a "Buy" rating for key companies in the sports footwear and apparel sector, specifically recommending Anta Sports, Li Ning, Xtep International, and 361 Degrees [7]. Core Insights - The sports footwear and apparel sector is expected to achieve steady growth in 2024, with a focus on leading companies' long-term investment value [1]. - In 2024, the combined revenue of four Hong Kong-listed sports footwear and apparel companies grew by 9% year-on-year to 123.2 billion yuan, while net profit attributable to shareholders increased by 36.21% to 21 billion yuan [1][11]. - The sector's stock prices have shown volatility but are expected to rise as consumer confidence improves and national policies stimulate demand [1][39]. Summary by Sections 2024 Review - The sports footwear and apparel sector demonstrated stable growth in terminal sales and maintained healthy inventory levels [1][11]. - The combined revenue of key companies in the sector showed consistent growth across the first and second halves of 2024, with a year-on-year increase of 9% [11]. - The inventory turnover days for major companies are healthy, averaging between 4-5 months, setting a solid foundation for growth in 2025 [1][24]. 2025 Outlook - The demand resilience in the sector is expected to continue, with a forecast for steady growth driven by recovering consumer confidence and an increasing preference for functional apparel [2][44]. - The report anticipates a trend of lower growth in the first quarter of 2025, followed by an increase in subsequent quarters, contingent on overall consumer sentiment improving [2][44]. Operational Trends - Companies are focusing on enhancing product quality, optimizing channel operations, and increasing marketing efforts to capture consumer attention [3]. - Key product categories such as running and outdoor gear are driving growth, with notable increases in sales for brands like Li Ning and Saucony [2][3]. - The report highlights the importance of channel optimization and marketing investments, with companies like 361 Degrees sponsoring major events to boost brand visibility [3][44]. Key Company Analysis and Investment Recommendations - Anta Sports is highlighted as a top pick due to its strong performance and expected revenue growth of 10.5% in 2025, with a projected net profit of 13% growth [45][46]. - Li Ning is expected to maintain stable revenue but face a decline in net profit due to prior asset impairments [45]. - Xtep International is projected to grow revenue by 7% and net profit by 10.3% in 2025, benefiting from its focus on professional sports segments [45][46]. - 361 Degrees is anticipated to achieve a 14% revenue increase and a 14.2% rise in net profit, supported by its broad market positioning [45][46].

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HKD 6.99 per share, reflecting a 5% upside potential [4][7]. Core Insights - The main brand shows steady growth, with a 6.5% increase in revenue to RMB 13.58 billion in 2024, driven by a 3.2% increase in Volkswagen and a 57.2% increase in professional sports revenue [4][7]. - Gross profit margin improved by 1.4 percentage points to 43.2%, with net profit rising 20.2% to RMB 1.24 billion, indicating enhanced profitability primarily from the professional sports segment and reduced losses from KP [4][7]. - The company plans to focus on direct-to-consumer (DTC) strategies and optimize retail channels, aiming to reclaim 400-500 stores by 2026, which will account for 5.0-6.3% of total stores [4][7]. Financial Summary - Revenue projections show a decline in 2024 to RMB 13.58 billion, followed by growth to RMB 14.47 billion in 2025, and further increases to RMB 15.62 billion in 2026 and RMB 17.00 billion in 2027 [3][6]. - Net profit is expected to rise from RMB 1.24 billion in 2024 to RMB 1.37 billion in 2025, reaching RMB 1.49 billion in 2026 and RMB 1.61 billion in 2027 [3][6]. - The company’s gross margin is projected to improve gradually, reaching 44.69% by 2027 [3][6]. Strategic Developments - The divestment of the fashion sports segment in November 2024 allows the company to concentrate on running and operational optimization, with professional sports expected to achieve a compound annual growth rate (CAGR) of 104.3% over the next four years [4][7]. - Saucony's revenue exceeded RMB 1 billion, and the brand is set to continue expanding its store presence and product offerings, particularly in high-end cities [4][7]. - The company plans significant capital expenditure of RMB 500 million in 2025, reflecting a 91% increase, to support its growth initiatives [4][7].

Investment Rating - The report maintains a "Recommended" rating for the textile and apparel industry [1]. Core Insights - The leading domestic sports brands, including Anta Sports, Xtep International, and 361 Degrees, have shown resilient growth in 2024, with revenues of 70.826 billion, 13.577 billion, and 10.074 billion yuan respectively, reflecting year-on-year growth rates of 13.6%, 6.5%, and 19.6% [3][6]. - The retail sales of clothing in China for January-February 2025 reached 262.4 billion yuan, a year-on-year increase of 3.3%, indicating a steady recovery in consumer demand supported by favorable policies [7][15]. - The report anticipates a quarterly improvement in clothing consumption throughout 2025, driven by ongoing consumer policy support and the effects of a low base in 2024 [7][15]. Summary by Sections 1. Industry Overview - The textile and apparel industry is experiencing stable growth, with a focus on domestic consumption recovery in early 2025 [1]. 2. Key Industry Data Review (a) Stock Market Review - The Shanghai Composite Index fell by 1.6%, while the textile and apparel sector saw a decline of 1.29% during the week of March 17-21, 2025 [11][12]. (b) Retail Performance - The total retail sales of consumer goods in China for January-February 2025 amounted to 83,731 billion yuan, with clothing retail sales contributing 2,624 billion yuan [15]. (c) Upstream Textile Exports - In February 2025, textile yarn, fabric, and related products exported amounted to 6.219 billion USD, a year-on-year decrease of 25.3% [22]. (d) Upstream Raw Materials - As of March 21, 2025, the domestic cotton price index was 14,905 yuan per ton, showing a slight increase from the previous week [31][32]. 3. Key Company Announcements - Anta Sports, Xtep International, and 361 Degrees reported significant revenue growth for 2024, with net profits increasing by 52.4%, 20.2%, and 19.5% respectively [3][6].

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company is expected to significantly enhance its profitability in 2024 driven by its professional sports segment, with a retail transformation for its main brand commencing in 2025 [5][6] - The company plans to recover 400-500 distribution rights for its stores, focusing on direct-to-consumer (DTC) strategies to optimize retail channel structure and improve operational efficiency [6][8] Financial Data and Forecasts - Revenue is projected to grow from 13,577 million HKD in 2024 to 17,005 million HKD by 2027, reflecting a compound annual growth rate (CAGR) of approximately 8.86% [6][9] - Net profit is expected to increase from 1,238 million HKD in 2024 to 1,607 million HKD in 2027, with a net profit margin improvement from 9.1% to 9.5% over the same period [6][9] - The company’s gross margin is forecasted to rise from 43.2% in 2024 to 44.7% in 2027, indicating improved cost management and pricing power [6][9] Market Performance - The company's stock closed at 5.27 HKD on March 24, 2025, with a market capitalization of 14,622 million HKD [2][5] - The stock has experienced a price fluctuation range between 3.70 HKD and 7.13 HKD over the past year [2] Strategic Developments - The company has completed a strategic divestment of its fashion sports business, allowing it to focus on running and optimizing operations in the professional sports segment [6][8] - The company is expanding its product offerings and enhancing its brand strategy, particularly in high-end urban areas, with plans for new flagship and concept stores [6][8]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 7 HKD [1][4][6] Core Insights - The company reported a revenue of 13.58 billion RMB for 2024, representing a year-on-year growth of 6.5%, and a net profit attributable to shareholders of 1.24 billion RMB, which is a 20.2% increase year-on-year [2][4] - The professional sports segment, including the Saucony brand, saw a significant revenue increase of 57.2% to 1.25 billion RMB, while the main brand, Xtep, grew by 3.2% to 12.33 billion RMB [2][3] - The company has focused on enhancing its brand image and expanding its product matrix, with the Saucony brand achieving a compound annual growth rate of over 100% over the past five years [2][3] Financial Performance Summary - Revenue and profit forecasts for 2025-2027 are as follows: - 2025E Revenue: 14.40 billion RMB, Net Profit: 1.38 billion RMB, EPS: 0.54 RMB - 2026E Revenue: 15.70 billion RMB, Net Profit: 1.54 billion RMB, EPS: 0.61 RMB - 2027E Revenue: 16.85 billion RMB, Net Profit: 1.69 billion RMB, EPS: 0.67 RMB [5][13] - The overall gross margin improved by 1 percentage point to 43.2%, driven by a significant increase in the gross margin of the professional sports segment [2][3][14] Strategic Developments - The company announced the divestiture of its fashion sports division, which is expected to alleviate profit pressure and allow for a focus on the main brand and Saucony, potentially leading to faster growth [3][4] - Management changes are anticipated to enhance the company's overseas expansion efforts, particularly in Southeast Asia [3][4]

Macro and Strategy - The Federal Reserve maintained the federal funds rate target range at 4.25-4.5% and announced a slowdown in balance sheet reduction, lowering the monthly limit for Treasury redemptions from $25 billion to $5 billion [7] - The high-tech manufacturing macro report indicates that the diffusion index for high-tech manufacturing remains stable, with a slight decline in certain sectors such as aerospace and new energy [7][8] - The AI-enabled asset allocation strategy highlights the integration of ESG factors into traditional investment theories, suggesting that incorporating ESG constraints can enhance portfolio performance [9][10] Industry and Company Insights - The social services sector is expected to benefit from recent consumption policies aimed at boosting domestic demand, with a focus on service consumption [10][11] - Data tracking shows a positive trend in retail sales and hiring demand, indicating a gradual economic recovery [11][12] - The textile and apparel sector has seen a rebound in retail sales growth, with notable increases in exports from Vietnam [13][14] - China Unicom reported a 10.5% year-on-year increase in net profit for 2024, with a focus on innovative business growth and a stable traditional business [16][17] - Xingyu Co. achieved a 34% year-on-year increase in net profit for Q4 2024, driven by strong demand for automotive lighting products [21][22] - Xtep International reported a 20% increase in net profit for 2024, with significant growth in its professional sports brand [24][25] - Anta Sports saw a 16.5% increase in core profit for 2024, supported by a diverse brand portfolio [28][29] - ZhongAn Online's total premium income reached 33.42 billion yuan in 2024, with a 13.3% year-on-year growth, driven by its diversified product ecosystem [30][31] - Ping An Insurance reported a 47.8% year-on-year increase in net profit for 2024, supported by a robust strategic layout in comprehensive finance and healthcare [33][34]

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [4] Core Viewpoints - The main brand, Xtep, shows steady performance with a revenue increase of 3% to 12.3 billion, while professional sports revenue (including Saucony) surged by 57% to 1.3 billion [1] - The overall revenue for 2024 is projected at 13.6 billion, reflecting a 7% year-on-year growth [1] - The company is focusing on a Direct-to-Consumer (DTC) strategy to enhance brand loyalty and customer retention, with plans to reclaim distribution rights for 400-500 stores by 2026 [3] - The running trend in China continues to grow, with Xtep achieving the highest wearing rate in major marathons, solidifying its position as a leading running brand [2] Summary by Sections Financial Performance - Total revenue for 2024 is 13.6 billion, up 7% year-on-year; main brand revenue is 12.3 billion, up 3%, and professional sports revenue is 1.3 billion, up 57% [1] - Footwear revenue is 8.1 billion (59% of total), up 16%, while apparel revenue is 5.2 billion, down 6% [1] - The overall gross margin for 2024 is 43%, an increase of 1.4 percentage points [1] - Net profit attributable to shareholders is projected at 1.2 billion, a 20% increase [1] Market Position and Strategy - The company operates 6,382 adult brand stores and 1,584 children's stores in China, with plans to enhance its DTC strategy [3] - Saucony is positioned as a secondary growth driver, ranking among the top three in marathon shoe wearing rates [2] Future Outlook - Revenue forecasts for 2025-2027 are 14.7 billion, 15.8 billion, and 17 billion respectively, with net profit estimates of 1.36 billion, 1.52 billion, and 1.69 billion [4]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported a net profit of 1.24 billion RMB for FY2024, marking a 20.2% year-on-year increase, achieving a historical high [5] - The main brand's revenue grew steadily, with professional sports showing strong performance, particularly with a 57.2% increase in revenue from the professional sports segment [5] - The company is focusing on direct-to-consumer (DTC) channel transformation to enhance long-term competitiveness [5] Financial Data and Profit Forecast - FY2023 revenue was 143.46 billion RMB, with a projected revenue of 146.36 billion RMB for FY2025, reflecting an 8% growth [4] - The net profit for FY2023 was 1.03 billion RMB, expected to rise to 1.37 billion RMB by FY2025, indicating a 10% growth [4] - The gross margin is projected to improve from 42% in FY2023 to 45% by FY2027 [4] Brand and Channel Performance - The main brand's revenue accounted for 90.8% of total revenue, with a slight decrease in gross margin to 41.8% [5] - Online sales grew approximately 20%, with new platforms like Douyin and Xiaohongshu seeing over 80% growth [5] - The company operates 6,382 adult clothing stores, with a net decrease of 189 stores, while children's stores numbered 1,584, with a net decrease of 119 stores [5] Profitability and Cash Flow - The gross margin improved to 43.2%, with a net profit margin of 9.1% [5] - Inventory turnover days decreased by 22 days to 68 days, indicating improved efficiency [5] - Operating cash flow remained stable at 1.228 billion RMB, with cash and cash equivalents totaling 3 billion RMB [5]

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative increase of over 15% in the stock price compared to the benchmark index within the next 6 to 12 months [8]. Core Insights - The company achieved a revenue of 135.77 billion yuan in 2024, representing a year-on-year growth of 6.5% after excluding the divested K&P business. The net profit attributable to shareholders was 12.38 billion yuan, with a year-on-year increase of 20.2%, aligning with expectations [4]. - The main brand, Xtep, reported a revenue of 123.27 billion yuan in 2024, growing by 3.2%. The online e-commerce segment saw approximately 20% growth, accounting for over 30% of total revenue, with emerging platforms like Douyin experiencing over 80% growth [4]. - The professional sports segment, including Saucony, achieved a revenue of 1.25 billion yuan in 2024, marking a significant year-on-year increase of 57.2%. Saucony's revenue surpassed 1 billion yuan, with improved profitability [4]. - The company plans to enhance its Direct-to-Consumer (DTC) strategy, aiming to recover distribution rights for approximately 400 to 500 Xtep stores by late 2025 and 2026 [4]. Financial Performance Summary - Revenue projections for the company are as follows: 2023A at 14,346 million yuan, 2024A at 13,577 million yuan, 2025E at 14,531 million yuan, 2026E at 15,685 million yuan, and 2027E at 16,831 million yuan [2]. - The net profit attributable to shareholders is forecasted to be 1,030 million yuan in 2023A, increasing to 1,672 million yuan by 2027E, with a consistent growth rate of around 10% [2]. - The company's gross margin improved to 43.2% in 2024, with a net margin of 9.1%, reflecting a year-on-year increase of 1.0 percentage points [4]. Valuation Metrics - The report indicates a Price-to-Earnings (P/E) ratio forecast of 13.1 for 2023A, decreasing to 8.1 by 2027E, suggesting an attractive valuation as earnings grow [2]. - The Price-to-Book (P/B) ratio is projected to decline from 1.5 in 2023A to 1.0 in 2027E, indicating a strengthening balance sheet relative to market valuation [2].