Revenue and Profit Growth - The group's revenue from continuing operations increased by 6.5% to RMB 13,577.2 million (2023: RMB 12,742.9 million), driven mainly by the stable performance of the Xtep brand and strong growth in the professional sports segment[3]. - Revenue from the Xtep brand rose by 3.2% to RMB 12,326.9 million (2023: RMB 11,947.4 million), while the professional sports segment saw a significant increase of 57.2% to RMB 1,250.3 million (2023: RMB 795.5 million)[3]. - Operating profit from continuing operations grew by 9.3% to RMB 1,965.5 million (2023: RMB 1,798.0 million), with the professional sports segment's operating profit surging by 829.5% to RMB 78.2 million (2023: RMB 8.4 million)[3]. - Profit attributable to ordinary shareholders reached a historic high of RMB 1,238.4 million (2023: RMB 1,030.0 million), marking a growth of 20.2%[3]. - Total revenue for 2024 reached RMB 13,577.2 million, an increase of 6.6% from RMB 12,742.9 million in 2023[38]. - Net profit attributable to ordinary shareholders was RMB 1,238.4 million, representing a net profit margin of 9.1%, up from 8.1% in 2023[38]. - Basic earnings per share for 2024 were RMB 48.67, an increase from RMB 40.76 in 2023[38]. Dividends and Payout Ratios - The proposed final dividend is HKD 0.095 per share (2023: HKD 0.080 per share), with a total annual dividend payout ratio of 138.2%[3][20]. - The annual dividend payout ratio, excluding the special dividend of HKD 0.447 per share, is 50.0%[21]. - The company declared a final dividend of HKD 0.095 per share, with a total annual dividend payout ratio of 50.0%[46]. - The special dividend for the year was HKD 0.447 per share, marking a 221.7% increase in total dividends compared to the previous year[46]. - The company maintained a high dividend payout ratio of 138.2%, with total dividends for 2024 amounting to 69.8 HKD cents per share[165]. - The group maintained a high dividend payout ratio of not less than 50% over the past five years, reflecting its commitment to delivering substantial returns to shareholders[176]. Strategic Focus and Brand Development - The company plans to enhance its direct-to-consumer (DTC) strategy, inspired by successful retail network management, to deepen customer interaction and improve brand loyalty[3]. - The company has strategically refocused on running after the completion of the divestment of K-Swiss and Palladium businesses in November last year[3]. - The company aims to enhance retail channel management and customer experience to expand its market presence in the running segment[49]. - The group aims to strengthen its direct-to-consumer (DTC) strategy, inspired by the success of Saucony in retail network management, to enhance customer interaction and brand loyalty[128]. - The company is focusing on maximizing the synergy between its main brand and the acquired Saucony and Merrell brands in product innovation and marketing[195]. Product Innovation and Market Presence - The launch of the "360X" carbon plate running shoes and the "160X" model, which helped set a national marathon record, highlights the company's commitment to innovation[30]. - The "160X 6.0 PRO" running shoes launched in August 2024 feature a 6.1% improvement in rebound performance and a 4% increase in running economy compared to the previous generation[71]. - The "260X 2.0" multi-scenario carbon plate running shoes were released in December 2024, enhancing running economy and rebound performance[72]. - The "360X" running shoes, launched in March 2024, became one of the best-selling models, leveraging advanced technologies for improved performance[75]. - The launch of new high-performance products includes "TRIUMPH 22," "ENDORPHIN PRO 4," "ENDORPHIN SPEED 4," and "HURRICANE 24," alongside a new apparel line to meet diverse consumer needs[109]. Market Engagement and Community Involvement - Xtep has sponsored a total of 44 top marathons and road running events across China in 2024, including the prestigious Xiamen Marathon, which has been sponsored for 16 consecutive years[81]. - The Xtep running community has over 2,200,000 members and more than 5,900 running teams, enhancing community engagement and brand loyalty[86]. - The "Run the Yellow River" event attracted over 60,000 participants, covering 5,500 kilometers across 8 provinces and 30 cities, marking a significant milestone in community engagement[85]. - 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[115]. Financial Performance and Efficiency - Gross profit for 2024 was RMB 5,865.4 million, reflecting a gross margin of 43.2%, up from 41.8% in 2023[38]. - The overall gross margin improvement was supported by strong e-commerce performance and the integration of acquired businesses into the group's operations[148]. - Selling and distribution expenses rose to RMB 2,867.9 million, accounting for 21.1% of total revenue, up from RMB 2,654.9 million or 20.8% in 2023, driven by higher advertising and promotional costs[150]. - General and administrative expenses increased to RMB 1,427.6 million, representing 10.5% of total revenue, compared to RMB 1,302.1 million or 10.2% in 2023, mainly due to higher employee costs and related expenses[151]. - The company recorded a decrease in corporate segment losses to RMB 67.2 million from RMB 101.4 million in 2023, primarily due to lower share-based payment expenses[155]. Sustainability and Corporate Responsibility - The introduction of eco-friendly materials in product lines, such as recycled fibers, demonstrates Xtep's commitment to sustainability[95]. - Xtep International Holdings achieved an MSCI ESG rating upgrade to "A" in July 2024, reflecting significant progress in labor standards and corporate governance[112]. - Xtep's 2030 ESG strategy aims to reduce absolute greenhouse gas emissions by 42% by 2030 and achieve carbon neutrality by 2050[113]. - Xtep's self-operated factories increased renewable energy usage by 95%, promoting green transformation in production processes[118]. Operational Adjustments and Future Outlook - The company is strategically adjusting its borrowing structure, favoring RMB loans over HKD loans to leverage lower interest rates in mainland China[192]. - The company is actively communicating with investors to restore confidence amid macroeconomic uncertainties and weak retail sales[200]. - The company aims to streamline its business structure following the KP sale, concentrating resources on its profitable brands[196].

Financial Data and Key Metrics Changes - Total group revenue increased by 6.5% to JPY 13,577,000,000 [10] - Operating profit rose by 9.3% to JPY 1,966,000,000 [11] - Net profit increased by 20.2% to JPY 1,238,000,000, with a net profit margin up by one percentage point to 9.1% [13] - Gross profit margin improved by 1.4 percentage points year on year to 43.2% [12] Business Segment Data and Key Metrics Changes - Revenue from the core brand increased by 3.2% to JPY 12,327,000,000 [17] - Professional Sports segment revenue, including Saucony and Merrell, grew by 57.2% to JPY 1,250,000,000 [18] - Saucony's revenue increased by nearly 60%, surpassing JPY 1,000,000,000 [19] Market Data and Key Metrics Changes - E-commerce revenue grew by 20% year on year, accounting for 30% of core brand revenue [28] - Saucony's revenue growth over the past five years has exceeded 100% CAGR [29] Company Strategy and Development Direction - The company will continue to focus on running and develop professionalism and refinement in its offerings [6] - A proactive approach will be taken to enhance operational efficiency and deepen end channel management [6] - The company aims to solidify its market status as the number one running brand in China through brand synergy and product matrix [24][33] Management Comments on Operating Environment and Future Outlook - The macroeconomic environment remains uncertain, but opportunities exist due to the national fitness boom [4] - Management expressed confidence in achieving high-quality growth and lucrative returns for investors [6] - The company plans to increase investment in DTC (Direct-to-Consumer) strategies to drive growth [35] Other Important Information - The company announced new appointments to strengthen its management structure, with Mr. Ricky Yang promoted to Executive Director and Ms. Donna Ding appointed as CFO [7] - The company has been recognized with an MSCI ESG rating upgrade to A, marking it as the first Chinese sports goods company to receive such a rating [32] Q&A Session Summary Question: What are the growth expectations for Saucony in 2025? - Saucony expects revenue growth of around 30% to 40% in 2025 [19] Question: How does the company plan to manage expenses moving forward? - The company will focus on controlling expenses while enhancing retail and inventory management capabilities [22]

Financial Data and Key Metrics Changes - Total group revenue increased by 6.5% to JPY 13,577,000,000 [10] - Operating profit rose by 9.3% to JPY 1,966,000,000 [11] - Net profit increased by 20.2% to JPY 1,238,000,000, with a net profit margin up by one percentage point to 9.1% [13] - Gross profit margin improved by 1.4 percentage points year on year to 43.2% [12] Business Line Data and Key Metrics Changes - Core brand revenue grew by 3.2% to JPY 12,327,000,000, with kids' segment growth exceeding 20% [17] - Professional Sports segment revenue, including Saucony and Merrell, grew by 57.2% to JPY 1,250,000,000, with Saucony's revenue increasing almost 60% [18] - Saucony's gross profit increased by 61.5%, with an operating profit of JPY 78,000,000 [19] Market Data and Key Metrics Changes - E-commerce revenue for the core brand increased by 20% year on year, accounting for 30% of core brand revenue [28] - Saucony's revenue exceeded JPY 1,000,000,000, marking significant growth in both scale and profits [29] Company Strategy and Development Direction - The company will continue to focus on running and develop professionalism and refinement in its offerings [6] - A clear strategy to enhance operational efficiency and deepen end channel management for high-quality growth was outlined [6] - The company aims to solidify its market status as the number one running brand in China through brand synergy and a professional to mass influence strategy [24][33] Management Comments on Operating Environment and Future Outlook - The management acknowledged ongoing macroeconomic uncertainties but highlighted opportunities in the sports goods industry [4] - The company expressed confidence in achieving high-quality growth and generating lucrative returns for investors [6] - Future expectations include a revenue growth of around 30% to 40% for Saucony in 2025 [19] Other Important Information - The company announced new appointments to strengthen its management structure, with Mr. Ricky Yang promoted to Executive Director and Ms. Donna Ding appointed as CFO [7] - The company received an upgraded MSCI ESG rating to A, becoming the first Chinese sports goods company to achieve this [32] Q&A Session Summary Question: What are the growth expectations for Saucony in the coming years? - Management expects Saucony to achieve revenue growth of around 30% to 40% in 2025 [19] Question: How does the company plan to manage expenses moving forward? - The company will focus on controlling expenses while enhancing retail and inventory management capabilities [22] Question: What is the company's strategy regarding e-commerce? - E-commerce will continue to be a key growth driver, with significant performance on emerging platforms [28]

Investment Rating - The report maintains a "Positive" investment rating for the textile and apparel industry [5] Core Insights - The high-end outdoor sports market remains vibrant both domestically and internationally, with a notable shift in China's consumer market towards a more competitive landscape where strong brands outperform [4][25] - The report highlights the competitive advantages and moats of leading brands, recommending investments in Anta Sports (02020, Buy), Li Ning (02331, Buy), and Xtep International (01368, Buy), while suggesting to pay attention to Biyinlefen (002832, Buy) and Baoxini (002154, Buy) [4][25] Summary by Sections Financial Performance - Amer Sports reported a revenue of $5.183 billion for 2024, an 18% year-on-year increase, exceeding the guidance of 16-17% [7][8] - The adjusted operating profit margin for 2024 was 11.1%, up 1.3 percentage points year-on-year, also above the guidance of 10.5-11% [7][8] - In Q4 2024, revenue reached $1.636 billion, a 23% increase year-on-year, with a gross margin of 56.1%, up 3.7 percentage points [9][19] Segment Performance - Functional apparel drove overall revenue growth in Q4 2024, with revenue of $745 million, a 33% increase year-on-year [12][14] - Outdoor apparel revenue was $594 million, up 13% year-on-year, primarily driven by Salomon brand [12][14] - Revenue from ball sports and racquet sports reached $296 million, a 22% increase year-on-year [13][14] Regional Insights - The Greater China region remains a key growth engine, with Q4 revenue increasing by 54% year-on-year, followed by the Asia-Pacific region at 52% [16][19] - The Americas and EMEA regions saw revenue growth of 15% and 8% respectively [16][19] Future Guidance - For 2025, Amer Sports projects a revenue growth rate of 13-15%, with specific guidance for functional apparel at 20%, outdoor apparel in the low double digits, and ball sports in the low to mid double digits [21][22] - The company anticipates an operating profit margin of 11.5%-12% for 2025, leaning towards the lower end of the range due to macro uncertainties [21][22] Store Expansion Plans - Amer Sports plans to open 200 stores for the Arc'teryx brand in North America, 75-100 in Europe, 75-100 in the Asia-Pacific region (excluding China), and 150-200 in China by 2025 [24][22]

Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HKD 6.65, corresponding to a 12x price-to-earnings ratio for 2025 [4][15]. Core Insights - The main brand's turnover showed improvement in Q4 2024, with a year-on-year growth of over 30% and a healthy inventory turnover of four months. Retail discounts improved to 70-75% in Q4 2024 compared to 70% in Q4 2023 [4][11]. - Saucony's revenue is expected to exceed 1 billion RMB, with a 50% year-on-year growth in Q4 2024 and a 60% increase for the entire year. The brand became profitable in 2023 and is expected to see further profitability improvements with full ownership from January 2024 [4][12]. - The company is expanding its product offerings and upgrading its channels, including new concept stores in major cities and a diverse product range that includes shoes and apparel [4][13]. - The main brand and Saucony have solidified their positions in the marathon shoe market, with the main brand achieving a wear rate of 22.4% in the Shanghai Marathon, surpassing international brands [4][14]. - The company is optimistic about its running product matrix and anticipates a second growth curve with Saucony's profitability. Estimated net profits for 2024 and 2025 are projected at 1.26 billion RMB and 1.39 billion RMB, respectively [4][15]. Financial Data and Forecast - The company's revenue is projected to grow from 14,346 million RMB in 2023 to 18,331 million RMB by 2026, with a compound annual growth rate of approximately 11.64% [3][8]. - Net profit is expected to increase from 1,044 million RMB in 2023 to 1,564 million RMB in 2026, reflecting a year-on-year growth rate of 12.25% [3][8]. - The gross margin is forecasted to improve gradually from 42.17% in 2023 to 43.25% in 2026, indicating enhanced operational efficiency [3][8].

Investment Rating - The report maintains an "OUTPERFORM" rating for the company, with a target price of HKD 6.65, corresponding to a 12x price-to-earnings ratio for 2025 [4][15]. Core Insights - The main brand's turnover showed improvement in Q4 2024, with a year-on-year growth of over 30% and a healthy inventory turnover of four months [4][11]. - Saucony's revenue is expected to exceed RMB 1 billion in 2024, with a 50% year-on-year growth in Q4 2024 and a 60% increase for the entire year [4][12]. - The company is optimistic about its running product matrix and anticipates that Saucony's profitability will contribute to a second growth curve [4][15]. Financial Data and Forecast - Revenue projections indicate a growth from RMB 14,346 million in 2023 to RMB 18,331 million by 2026, with a compound annual growth rate (CAGR) of approximately 11.64% [3][8]. - Net profit is forecasted to increase from RMB 1,044 million in 2023 to RMB 1,564 million by 2026, reflecting a strong growth trajectory [3][8]. - The gross margin is expected to improve gradually from 42.17% in 2023 to 43.25% in 2026 [3][8]. Brand Performance - The main brand achieved a completion rate of 22.4% in the Shanghai Marathon, surpassing international brands, while Saucony maintained a top-three position in wear rates [4][14]. - The company has opened new concept stores to enhance brand visibility and product offerings, including collaborations with designers and the introduction of new product lines [4][13]. Market Position - The report highlights the company's strong position in the marathon shoe market, with both the main brand and Saucony leading in wear rates at major marathons [4][14]. - The company is focusing on channel upgrades and product matrix expansion to sustain growth and enhance profitability [4][12][13].

Investment Rating - The report assigns a "Buy" rating to the company with a current price of 5.68 HKD and a fair value of 6.71 HKD [7]. Core Insights - The main brand of the company is experiencing steady growth, with a healthy recovery in inventory levels. In Q4 2024, the main brand's total channel revenue is expected to grow at a high single-digit percentage year-on-year, with retail discounts improving to a level of 70-75% [7]. - The subsidiary brand, Saucony, continues to show strong growth momentum, with total channel revenue in Q4 2024 expected to increase by approximately 50%, surpassing the previous guidance of over 60% for the entire year [7]. - The company forecasts net profit attributable to shareholders for 2024-2026 to be 1.26 billion, 1.39 billion, and 1.51 billion CNY respectively, and maintains a price-to-earnings (P/E) ratio of 12 for 2025, leading to a fair value estimate of 6.71 HKD per share [7]. Financial Summary - The company's main revenue for 2023 is reported at 12,930 million CNY, with a growth rate of 29.1%. The EBITDA is projected to be 1,515 million CNY, and the net profit attributable to shareholders is expected to be 922 million CNY, reflecting a growth rate of 1.5% [6]. - For the years 2024 to 2026, the main revenue is expected to be 14,396 million CNY, 15,077 million CNY, and 16,462 million CNY respectively, with corresponding growth rates of 0.4%, 4.7%, and 9.2% [6]. - The report indicates that the company's return on equity (ROE) is projected to be 11.0%, 11.6%, 13.1%, 13.5%, and 13.8% from 2022 to 2026 [6].

Investment Rating - Buy rating with a target price of HKD 7.03, implying a 26.7% upside from the current price of HKD 5.5 [4][7] Core Views - The company's Q4 2024 performance was strong, with Saucony growing 50% YoY [2][7] - Xtep's main brand retail sales grew high single-digit YoY in 2024, while Saucony exceeded expectations with over 60% growth [7] - Full-year 2024 profit is expected to achieve 20% growth target [7] - The company is optimistic about 2025 performance, expecting double-digit growth [7] Financial Performance - Revenue is forecasted to grow from RMB 14,712 million in 2024E to RMB 16,676 million in 2026E, representing a 9.4% CAGR [3] - Net profit is projected to increase from RMB 1,242 million in 2024E to RMB 1,576 million in 2026E, a 14.1% CAGR [3] - Gross margin is expected to improve from 40.9% in 2022 to 43.8% in 2026 [8] - ROE is forecasted to rise from 11.4% in 2022 to 14.9% in 2026 [8] Business Development - Xtep main brand: - Continuing to open larger stores and close smaller ones to improve store efficiency [7] - Over 60% of stores are 9th generation stores [7] - Expanding internationally, focusing on Southeast Asia, Middle East, Russia, and cross-border e-commerce [7] - Saucony: - Estimated to exceed RMB 1 billion in scale in 2024 [7] - Store efficiency estimated at RMB 300,000-500,000+ [7] - Plans to open flagship stores in tier 1 cities and expand to tier 2-3 cities [7] - Long-term operating margin target of 20%+ [7] Valuation - Current PE ratio: 10.5x (2024E), 9.5x (2025E), 8.4x (2026E) [3] - Target price of HKD 7.03 represents 12x 2025E EPS [7] - Dividend yield expected to increase from 4.8% in 2024E to 6.0% in 2026E [3]

Investment Rating - The report maintains a **Buy** rating for Xtep International (1368 HK) with a target price of HK$6.95, representing a **26% upside** from the current price of HK$5.51 [1][2] Core Views - Xtep International is expected to achieve **high single-digit revenue growth** in 2025, driven by its focus on the running segment [4] - The company's 2024 revenue and net profit are forecasted to grow by **1.5% and 21.3%** respectively, with a **7.3% revenue growth** on a like-for-like basis [5][8] - For 2025, revenue and net profit are projected to increase by **2.5% and 11.5%** respectively, with a **9.2% revenue growth** on a like-for-like basis [6][8] Financial Performance - Xtep brand revenue is expected to grow by **4.1% in 2024**, driven by high single-digit growth in retail sales and strong performance in the children's segment [5] - Saucony is projected to achieve **~50% growth in Q4 2024** and **over 60% growth for the full year 2024**, contributing to a **55% increase in the professional sports division revenue** [5] - The company plans to upgrade over **30% of its old stores** to the ninth-generation format in 2025, aiming to drive growth through improved store efficiency [6] - Saucony's new stores are achieving monthly sales of **RMB 500k**, significantly higher than the average of **RMB 300k+**, with plans for further expansion in 2025 [6] Valuation and Forecasts - The report maintains a **12x 2025 P/E** valuation for Xtep International, with a target price of HK$6.95 [7] - Revenue for 2024-2026 is forecasted to grow by **1.5%, 2.5%, and 8.8%** respectively, reaching **RMB 14.56bn, RMB 14.92bn, and RMB 16.24bn** [7][8] - Net profit for 2024-2026 is expected to grow by **21.3%, 11.5%, and 12.7%** respectively, reaching **RMB 1.25bn, RMB 1.39bn, and RMB 1.57bn** [7][8] Financial Ratios - Gross margin is expected to remain stable at **44.2% in 2024**, **44.1% in 2025**, and **44.6% in 2026** [11] - Net profit margin is projected to improve from **8.6% in 2024** to **9.3% in 2025** and **9.7% in 2026** [11] - The company's ROE is forecasted to increase from **13.0% in 2024** to **13.3% in 2025** and **13.8% in 2026** [11]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 7, based on a 12x PE valuation for 2025 [2][3] Core Views - The company's main brand, Xtep, showed steady growth in Q4 2024, with retail sales increasing by high single digits year-over-year and retail discount levels improving to 70-75% off, compared to 75% off in Q3 2024 [5] - The Saucony brand continued its strong growth trajectory, with retail sales increasing by approximately 50% year-over-year in Q4 2024 and over 60% for the full year [5] - Xtep achieved the highest wear rate among global running shoes at the 2024 Shanghai Marathon, solidifying its leadership in the running market [5] - The company expects steady growth for its main brand and high growth for Saucony, which is anticipated to form a second growth curve [5] Financial Performance and Projections - Revenue for 2024E is projected at RMB 14,035 million, a slight decline of 2.2% year-over-year, but growth is expected to resume in 2025E and 2026E with increases of 9.8% and 10.0%, respectively [5] - Operating profit for 2024E is forecasted at RMB 1,879 million, an 18.9% increase year-over-year, with further growth expected in 2025E and 2026E [5] - Net profit attributable to shareholders is projected to grow by 21.8% in 2024E, reaching RMB 1,255 million, with continued growth in subsequent years [5] - Gross margin is expected to improve from 42.2% in 2023A to 45.6% in 2026E, reflecting better profitability [5] Valuation and Market Performance - The company's HKD market capitalization is HKD 15,216 million as of January 14, 2025, with a total of 268,365 million shares outstanding [3] - The stock's 52-week high and low prices are HKD 7.13 and HKD 3.19, respectively, with a current price of HKD 5.67 as of January 14, 2025 [3] - The stock has shown strong relative performance, with a 12-month absolute return of 50.16%, outperforming the Hang Seng Index by 31.84% [3] Industry Comparison - The company's 2025E PE ratio of 8.4x is lower than industry peers such as Anta (15x) and Li Ning (10x), indicating potential undervaluation [7] - The adjusted average PE ratio for the industry is 12x for 2025E, suggesting that the company's valuation is relatively attractive [7] Strategic Developments - The company has successfully divested its KP business, which is expected to improve overall profitability [5] - Saucony expanded its retail presence with new concept stores in Beijing and Shanghai, further enhancing its brand image and market reach [5]