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]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company's main brand has shown strong revenue growth, with a focus on high-performance running shoes driving this increase. The operational metrics remain stable, and revenue is expected to continue growing steadily. The subsidiary brand, Saucony, has also experienced significant growth, with a projected revenue increase of over 60% for the year [5][6][7]. Financial Summary and Valuation Metrics - Revenue projections for the company are as follows: - 2024E: 13,925 million - 2025E: 15,326 million - 2026E: 16,755 million - Year-over-year growth rates for revenue are expected to be -2.9% in 2024, followed by 10.1% in 2025 and 9.3% in 2026 [8]. - Net profit estimates are: - 2024E: 1,239 million - 2025E: 1,398 million - 2026E: 1,573 million - The projected P/E ratios are 11.0 for 2024, 9.8 for 2025, and 8.7 for 2026, indicating a favorable valuation trend [8].

Investment Rating - Maintain "Buy" rating [1] Core Views - The company is expected to achieve revenues of RMB 16 billion, RMB 17.9 billion, and RMB 19.8 billion in 2024-2026, with net profits of RMB 1.21 billion, RMB 1.41 billion, and RMB 1.65 billion respectively [1] - EPS is projected to be RMB 0.46, RMB 0.53, and RMB 0.63 per share for 2024-2026, with corresponding P/E ratios of 12x, 11x, and 9x [1] - Saucony is a key growth driver for the company, with retail sales growing over 60% in 2024, and is expected to continue expanding its product matrix and opening new stores in high-tier cities [2] - The company's leading position in the running sector is reinforced by its performance in major marathons, with a 49.8% wear rate among sub-3-hour runners in the Xiamen Marathon [14] - The synergy between the main brand, Saucony, and Merrell is expected to further enhance market share and expand the customer base [2] Financial Performance - The main brand of the company recorded high single-digit year-on-year growth in retail sales for Q4 2024 and the full year 2024 [12] - Saucony's retail sales grew approximately 50% year-on-year in Q4 2024 and over 60% for the full year 2024 [12] - The main brand's inventory turnover remained healthy at around four months, with retail discount levels improving slightly to 70-75% off in Q4 2024 compared to 70% off in Q4 2023 [13] Market Position and Strategy - The company's main brand continues to dominate the running sector, with a strong presence in major marathons and a leading position in the minds of runners [14] - The company operates through three brands: the main brand targeting the mass market, Saucony serving high-end and mature customers, and Merrell focusing on trail running and outdoor sports [14] - The company plans to leverage its running ecosystem and brand synergy to further increase market share and expand its customer base [2] Stock Performance - The stock price of the company has shown significant growth, with a 52% increase over the period from January 2024 to September 2024 [4]

Investment Rating - Buy (Maintained) [2] Core Views - The report highlights that Xtep International's Q4 2024 retail performance met expectations, with the main brand achieving high single-digit growth across all channels, driven by functional running shoes, which grew by approximately 30% in 2024 [5] - Saucony, a subsidiary brand, continued its strong performance with a 50% growth in Q4 2024 and over 60% growth for the full year, surpassing the RMB 1 billion retail sales milestone in 2024 [5] - Online sales outperformed offline, with the main brand's e-commerce sales growing over 20% in Q4 2024, while offline sales saw low single-digit growth despite reduced foot traffic [5] - Inventory levels remained healthy, with a stock-to-sales ratio of around 4 months for the main brand, and discount rates improved year-over-year, indicating robust operational quality [5] - The company plans to further optimize its multi-brand strategy, focusing on core running businesses and enhancing the brand image of Saucony by opening flagship stores in first-tier cities [5] - Xtep International's full-year performance is expected to be positive, with inventory levels projected to decrease and cash flow improving, driven by strong retail recovery in Q4 2024 [5] Financial Data and Profit Forecast - Revenue for FY2024E is projected at RMB 13.3 billion, a 7% decline year-over-year, but expected to grow by 9% in FY2025E and FY2026E to RMB 14.5 billion and RMB 15.8 billion, respectively [4] - Net profit attributable to shareholders is forecasted to grow by 20% in FY2024E to RMB 1.24 billion, followed by 13% and 9% growth in FY2025E and FY2026E, reaching RMB 1.39 billion and RMB 1.51 billion, respectively [4] - Gross margin is expected to remain stable at 45% from FY2024E to FY2026E, while the P/E ratio is projected to decrease from 11x in FY2024E to 9x in FY2026E [4] Channel and Inventory Performance - The main brand's average monthly store sales in H1 2024 were approximately RMB 190,000, with further improvements expected by year-end due to flagship store expansions and operational optimizations [5] - The main brand's discount rate in Q4 2024 was 7-7.5%, slightly deeper than the previous quarter due to promotional activities but improved compared to the same period in 2023 [5] - Saucony's flagship stores in Beijing and Shanghai achieved monthly sales exceeding RMB 600,000, showcasing strong brand performance in key markets [5] Strategic Focus and Future Plans - Xtep International plans to continue optimizing its channel structure by introducing new running store formats in 2025, with over 60% of the main brand's stores already upgraded to the ninth generation [5] - The company will increase investment in Saucony, focusing on product and channel expansion, including the introduction of new SKUs such as commuter, OG, and retro series, aiming to make Saucony a key growth driver over the next five years [5] - The company has divested its fashion sports brand to focus on core running businesses, which is expected to strengthen its competitive advantage in the professional sports segment [5]

Investment Rating - Buy (Maintained) [1] Core Views - The company's main brand showed accelerated growth in Q4 2024, with e-commerce performing particularly well, driven by extended Double 11 promotions [8] - Saucony continued its strong growth trajectory, with Q4 2024 sales up 50% YoY and full-year growth exceeding 60% [8] - The company is expected to further expand its running shoe product matrix in 2025, including the launch of the 7th generation of the 160 series and other segmented products [8] - The main brand's discount rate improved YoY, and inventory levels remained healthy at around 4 months [8] - The company is expected to increase store openings in high-tier cities for Saucony in 2025, while also expanding into commuter and retro product lines [8] Financial Forecasts - Revenue is expected to grow from RMB 14,346 million in 2023A to RMB 17,520 million in 2026E, with a CAGR of 6.9% [1] - Net profit attributable to shareholders is projected to increase from RMB 1,030 million in 2023A to RMB 1,648 million in 2026E, with a CAGR of 16.9% [1] - EPS is forecasted to rise from RMB 0.38 in 2023A to RMB 0.61 in 2026E [1] - P/E ratio is expected to decline from 13.42x in 2023A to 8.39x in 2026E, indicating potential undervaluation [1] Operational Highlights - Main brand's Q4 2024 retail sales grew by high single digits YoY, with e-commerce sales up over 20% [8] - Saucony's Q4 2024 retail sales increased by 50% YoY, with full-year growth exceeding 60% [8] - The company maintained a healthy inventory turnover of around 4 months [8] - The main brand's discount rate improved to 7-7.5折 in Q4 2024, compared to the previous quarter [8] Market Data - Closing price: HKD 5.60 [6] - 52-week range: HKD 3.68 - HKD 7.13 [6] - P/B ratio: 1.57x [6] - Market capitalization: HKD 15,028.44 million [6] Financial Ratios - ROE is expected to increase from 11.62% in 2023A to 13.43% in 2026E [9] - Gross margin is projected to improve from 42.17% in 2023A to 44.43% in 2026E [9] - Net profit margin is forecasted to rise from 7.18% in 2023A to 9.41% in 2026E [9] - Debt-to-asset ratio is expected to decline from 48.50% in 2023A to 43.90% in 2026E [9]

Investment Rating - The report maintains a "Buy" rating for the company, with a target PE of 10x for 2025 [4][5] Core Views - The company's main brand, Xtep, achieved high single-digit year-over-year (YoY) growth in Q4 2024, with retail discounts ranging between 70-75% and inventory turnover days around 4 months, indicating stable operations [3] - E-commerce sales grew over 20% YoY in Q4 2024, driven by product structure optimization and the "Double 11" shopping festival, while offline sales grew at a low single-digit rate [3] - Saucony, a sub-brand, saw a 50% YoY growth in Q4 2024 and over 60% growth for the full year, with potential for long-term scale expansion due to improved product mix and store optimization [9] - The company is expected to achieve over 20% YoY growth in net profit attributable to shareholders in 2024, supported by the successful divestment of the KP business [9] Financial Performance and Projections - Revenue is projected to decline by 7.2% YoY in 2024 but rebound with 11.4% and 11.6% growth in 2025 and 2026, respectively [10] - Net profit attributable to shareholders is expected to grow by 20.5% YoY in 2024, followed by 11.9% and 12.5% growth in 2025 and 2026 [10] - Gross margin is forecasted to improve from 42.2% in 2023 to 44.7% in 2026, while net margin is expected to remain stable at around 9.4% from 2025 onwards [7] - ROE is projected to increase from 11.6% in 2023 to 12.2% in 2024, then stabilize at around 12% in the following years [10] Operational Highlights - The company optimized its offline store structure in 2024 by opening larger stores and closing smaller ones, with the proportion of ninth-generation stores gradually increasing [3] - Inventory levels remained healthy, with channel inventory turnover days at around 4 months by the end of Q4 2024, reflecting efficient retail operations and inventory management [9] - The company continued to enhance its e-commerce business by increasing the proportion of high-value-for-money products, contributing to strong online sales growth [3]

Investment Rating - The report maintains an "Outperform" rating for Xtep International (01368 HK) [1][6] Core Views - Xtep's main brand achieved high single-digit retail sales growth in Q4 and full year 2024, with online sales growing over 20% and offline sales growing low single-digit [2][3] - Saucony brand achieved over 60% growth in 2024, exceeding management guidance [2][3] - KP brand's divestiture is expected to enhance Xtep Group's profitability, with 2024 net profit target highly achievable [6] - 2024-2026 net profit forecast is adjusted to 1 25/14 0/15 6 billion yuan, representing year-over-year growth of 20 9%/12 5%/10 9% [6] Operational Performance - Xtep main brand's Q4 retail discount improved to 7-7 5折 compared to 7折 in the same period last year [3] - Year-end inventory-to-sales ratio improved to 4 months, down from 4-4 5 months in the same period last year [3] - Saucony achieved approximately 50% growth in Q4 2024 [3] - January trends show positive momentum with main brand achieving double-digit growth, partly driven by earlier Chinese New Year [3] Financial Projections - 2024-2026 revenue forecast: 13 738/14 902/16 196 billion yuan [7] - 2024-2026 net profit margin forecast: 9 1%/9 4%/9 6% [7] - 2024-2026 ROE forecast: 13 1%/13 8%/14 2% [7] - 2024-2026 PE ratio forecast: 11 3x/10 0x/9 0x [7] Valuation - Maintains reasonable valuation range of 6 1-6 6 HKD, corresponding to 11-12x 2025 PE [6] - Comparable company valuation shows Xtep trading at lower PE multiples than Anta and Li Ning [8] Strategic Focus - Company focuses on running category expertise, with main brand targeting mass market and Saucony targeting "dual elite" segment [6] - KP brand's divestiture expected to improve profitability, as it incurred annual operating losses of around 180 million yuan in 2022-2023 [6]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [6][34][38]. Core Viewpoints - The company is positioned as a leading domestic sportswear brand focusing on the running segment, leveraging continuous R&D investments to achieve technological advancements in footwear and apparel, thereby establishing high competitive barriers. The company is also enhancing brand competitiveness through differentiated channel strategies and effective marketing, indicating significant long-term growth potential [6][34][38]. - The financial forecasts predict the company's net profit attributable to shareholders for 2024, 2025, and 2026 to be 12.64 billion, 13.95 billion, and 15.99 billion RMB, respectively, representing year-on-year growth rates of 22.73%, 10.36%, and 14.65% [5][34][41]. Financial Summary - The company's revenue for FY2023 is projected at 14.35 billion RMB, with a year-on-year growth of 10.94%. For FY2024, revenue is expected to reach 14.86 billion RMB, reflecting a growth of 3.61%. The forecast for FY2025 and FY2026 is 15.41 billion and 16.94 billion RMB, with growth rates of 3.69% and 9.91%, respectively [5][25][34]. - The gross profit margin is expected to improve from 42.20% in FY2023 to 44.27% in FY2026, indicating a positive trend in profitability [5][25][34]. Market and Industry Insights - The running culture in China is growing, with a significant increase in marathon events and participants, which is expected to drive demand for running-related products. The number of certified marathon events in 2023 reached 699, nearing pre-pandemic levels, highlighting a robust recovery in the running community [136][139]. - The domestic sportswear market is witnessing a shift towards leading national brands, with the market share of top brands like Anta, Li Ning, and Xtep increasing significantly. The market concentration is expected to continue as consumer preferences evolve towards domestic brands [139][140]. Company Strategy and Development - The company has been focusing on expanding its online channels, which have shown a growth rate exceeding 20% year-on-year, contributing to over 30% of the main brand's revenue. This shift is expected to become a new growth driver for the company [21][22]. - The company actively sponsors marathon events and has signed multiple sports celebrities as brand ambassadors, reinforcing its professional image in the running segment and enhancing brand recognition among consumers [22][34]. Competitive Positioning - The company is strategically positioned in the running footwear market, with its main brand catering to both mass and elite consumer segments. The introduction of specialized brands like Saucony and Merrell targets professional runners and outdoor enthusiasts, further diversifying its market reach [34][126]. - The report highlights that the company's average PE ratio for 2024 is projected at 11.4X, which is lower than the industry average of 14.0X, suggesting potential undervaluation relative to its peers [34][41].

[Table_MainInfo] 公司研究/纺织与服装/服装与奢侈品 证券研究报告 特步国际（1368）公司公告点评 2024 年 11 月 06 日 | --- | --- | |--------------------------------------------------------------------|--------------------| | 股票数据 | | | [Table_StockInfo] 11 月 05 日收盘价（港元） | 5.72 | | 52 周股价波动（港元） | 3.13-7.13 | | 总股本（百万股） | 2684 | | 总市值（百万港元） | 15350 | | 相关研究 | | | [ Ta b le _R e po r tIn fo ] | | | 《 主 品 牌 电 商 表 现 亮 眼 | ，专业运动收入高增 | | 72%》2024.08.25 | | | 《 24Q2 主品牌折扣库存改善》 《 流水增长稳健，库存周转同比改善》 | 2024.07.24 | | 24Q1 | | | 2024.04.25 市场表现 | | [Table_Quote ...

%% %% 丨证券研究报告丨 港股研究丨公司点评丨特步国际（1368.HK） [Table_Title] 流水稳健增长，库存&折扣健康 | --- | --- | --- | |----------|-------|-------| | | | | | 报告要点 | | | 分析师及联系人 [Table_Author] 于旭辉 柯睿 SAC：S0490518020002 SFC：BUU942 请阅读最后评级说明和重要声明 特步国际（1368.HK） cjzqdt11111 [Table_BaseData] 当前股价（HKD） 5.76 注：股价为 2024 年 10 月 31 日收盘价 [Table_Title2] 流水稳健增长，库存&折扣健康 港股研究丨公司点评 [Table_Summary2] 事件描述 公司发布 2024Q3 零售数据，特步主品牌流水同比中单位数增长，索康尼流水同比超 50%增 长，流水表现符合预期。 事件评论 ⚫ 主品牌稳健增长，索康尼增长亮眼。特步 Q3 全渠道流水中单增长，线下客流&连带等多 指标均有所拖累。月度趋势来看预计 7-9 月均有所承压，但 10 月换季等影响催化流水恢 ...