Core Viewpoint - The report from CICC maintains the EPS forecast for Xtep International (01368) at 0.49/0.55 yuan for 2025/26, introduces a new EPS forecast of 0.61 yuan for 2027, and sets a target price of HKD 6.47, reflecting an 11% decrease and a 27% upside potential from the current stock price, corresponding to an 11x P/E for 2026 [1]. Company Status - Xtep reported that its main brand's retail revenue remained flat year-on-year in Q4 2025, with retail discounts between 70% to 75%, and channel inventory turnover at 4.5 months by the end of December. The Saucony brand saw retail revenue growth of over 30% year-on-year [2]. Retail Environment and Performance - The retail environment showed fluctuations, with the main brand's retail revenue remaining stable in Q4 2025. Online channels, particularly live e-commerce, performed well. Monthly performance was strong in October and November due to promotional events, but December was affected by weather conditions. Retail discounts for the main brand remained stable, and the inventory turnover was healthy [3]. Saucony Brand Growth - The Saucony brand experienced accelerated growth in Q4 2025, with retail revenue increasing by over 30% year-on-year. Strong growth was noted in offline channels, with average store efficiency reaching 450,000 yuan per month. The brand's product line continued to expand with new sports and leisure products, achieving double-digit growth in apparel [4]. Strategic Focus for 2026 - In 2026, the main brand will focus on enhancing offline store efficiency, while the Saucony brand aims for a premium positioning. The management plans to convert 200 stores to a DTC model and open 20-30 new flagship stores. The company also plans to accelerate the opening of outlet stores, with a target of 70-100 new stores in 2026, and aims to enhance the high-end sports image of Saucony [5].

Group 1 - The core viewpoint of the report maintains the EPS forecast for Xtep International at 0.49/0.55 CNY for 2025/26 and introduces a new EPS forecast of 0.61 CNY for 2027, with a target price adjustment down by 11% to 6.47 HKD, indicating a 27% upside potential from the current stock price [1] Group 2 - The company reported that the retail revenue of its main brand remained flat year-on-year in Q4 2025, with retail discounts maintained at 70-75%, and channel inventory turnover at 4.5 months by the end of December [2][3] - The retail environment showed fluctuations, with the main brand's performance being stable despite some impact from weather in December; online channels, particularly live e-commerce, performed well [3] Group 3 - The Saucony brand experienced over 30% year-on-year growth in retail revenue for Q4 2025, with strong offline channel growth and an average store efficiency of 450,000 CNY per month [4] - The company plans to enhance the offline store efficiency of its main brand and aims to open 20-30 new premium stores in 2026, while also expanding its outlet store presence significantly [5]

Group 1: Fixed Income Insights - The demand for bank bonds has increased due to rising bond yields, making them more attractive compared to loan interest rates, leading to sustained buying from institutional investors [12] - Wealth management products have shown a significant increase in scale, with a notable shift towards deposits, while there has been a reduction in bond holdings, particularly in interest rate bonds [14] - The one-year interest rate has decreased to 1.6%, indicating a trend of net repayment of certificates of deposit [15] Group 2: Real Estate Market Analysis - The second-hand housing market has shown improvement with a year-on-year decline narrowing to 7.3%, while new home sales continue to weaken with a year-on-year drop of 38.6% [5] - In 2025, new home prices fell by 3.0% and second-hand home prices dropped by 6.1%, with significant declines across all city tiers [24][25] - The report suggests that the real estate sector remains a key economic indicator, with potential for recovery driven by policy changes and market dynamics [26] Group 3: Commodity Market Trends - The price of Brent crude oil has increased by 5.4%, while copper and coking coal prices have risen by 2.1% and 3.4% respectively, indicating a general upward trend in major commodity prices [5] - The coal market is experiencing a dual weakness in supply and demand, with prices stabilizing as winter demand begins to wane [28] - The silver price has recently surpassed $100, indicating a bullish trend in precious metals, while other metals like nickel and lithium are also showing upward momentum [23] Group 4: Consumer and Retail Sector Developments - The consumer sector is expected to benefit from policy support and improving fundamentals, particularly in new retail and service sectors [19] - Key retail segments such as hotels and duty-free shops are projected to see growth, with specific companies recommended for investment [20] - The report highlights the importance of domestic consumption and the potential for brands to expand internationally, with a focus on companies that have established competitive advantages [19]

Investment Rating - The report assigns a "Buy" rating to the company, with a current price of HKD 5.08 and a fair value of HKD 6.02 [5]. Core Insights - The main brand of the company shows steady growth, while the subsidiary brand, Saucony, has accelerated its growth on a quarter-over-quarter basis [9]. - The company's revenue for 2023 is projected at RMB 12.743 billion, with a growth rate of -1.5%. Revenue is expected to increase to RMB 16.868 billion by 2027, reflecting a compound annual growth rate (CAGR) of approximately 8.7% [4]. - The net profit attributable to shareholders is forecasted to grow from RMB 1.030 billion in 2023 to RMB 1.668 billion in 2027, with a notable growth rate of 20.2% in 2024 [4]. Financial Summary - **Revenue Forecast**: - 2023A: RMB 12,743 million - 2024A: RMB 13,577 million (6.5% growth) - 2025E: RMB 14,416 million (6.2% growth) - 2026E: RMB 15,516 million (7.6% growth) - 2027E: RMB 16,868 million (8.7% growth) [4] - **Net Profit Forecast**: - 2023A: RMB 1,030 million - 2024A: RMB 1,238 million (20.2% growth) - 2025E: RMB 1,362 million (10.0% growth) - 2026E: RMB 1,514 million (11.1% growth) - 2027E: RMB 1,668 million (10.2% growth) [4] - **Earnings Per Share (EPS)**: - 2023A: RMB 0.39 - 2024A: RMB 0.46 - 2025E: RMB 0.49 - 2026E: RMB 0.54 - 2027E: RMB 0.60 [4] - **Valuation Ratios**: - Price-to-Earnings (P/E) ratio is projected to decrease from 10.1 in 2023 to 7.7 in 2027 [4]. - Return on Equity (ROE) is expected to improve from 11.6% in 2023 to 15.1% in 2027 [4]. - **Market Position**: The company is expected to maintain a strong position in the running shoe market, with a projected sales volume of over 25 million pairs by 2025 [9].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance in the near term [6][19]. Core Insights - The main brand shows steady performance, while the subsidiary brand, Saucony, continues its strong growth trajectory. The overall revenue for the main brand remained stable, with a low single-digit growth achieved for the year. Saucony's revenue growth exceeded 30% year-on-year, reflecting robust market demand [6][10]. - The company has successfully optimized its product offerings and channels, focusing on direct-to-consumer (DTC) strategies and enhancing customer experience through new store formats. The DTC transformation is progressing steadily, with plans to recover a significant number of stores to better respond to market changes [6][10]. - The financial forecasts indicate a projected increase in net profit from 1.37 billion RMB in FY2025 to 1.6 billion RMB in FY2027, with corresponding price-to-earnings ratios decreasing from 9 to 8 over the same period [6][15]. Financial Data and Profit Forecast - Revenue projections for FY2023 to FY2027 are as follows: 143 billion RMB, 136 billion RMB, 142.8 billion RMB, 151 billion RMB, and 161 billion RMB, respectively. The year-on-year growth rates are expected to fluctuate, with a notable decline in FY2024 [6][15]. - The net profit attributable to shareholders is forecasted to grow from 1.03 billion RMB in FY2023 to 1.6 billion RMB in FY2027, with a consistent increase in earnings per share from 0.41 RMB to 0.57 RMB over the same period [6][15]. - The gross margin is expected to stabilize around 45% from FY2025 onwards, indicating effective cost management and pricing strategies [6][15].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The main brand of the company shows stable performance, while the subsidiary brand, Saucony, continues its strong growth trend. The overall performance aligns with expectations, with the main brand achieving low single-digit growth for the year [6] - The company has successfully optimized its multi-brand matrix by divesting from fashion sports brands and focusing on core running business, which is expected to strengthen its competitive advantage in the running segment [6] Financial Data and Profit Forecast - Revenue projections for FY2023 to FY2027 are as follows: - FY2023: 143 billion RMB - FY2024: 136 billion RMB (down 5%) - FY2025E: 142.8 billion RMB (up 5%) - FY2026E: 151 billion RMB (up 6%) - FY2027E: 161 billion RMB (up 6%) [5] - Net profit forecasts for the same period are: - FY2023: 10.3 billion RMB - FY2024: 12.4 billion RMB (up 20%) - FY2025E: 13.7 billion RMB (up 11%) - FY2026E: 14.9 billion RMB (up 8%) - FY2027E: 16.0 billion RMB (up 8%) [5] - The earnings per share (EPS) is projected to increase from 0.41 RMB in FY2023 to 0.57 RMB in FY2027 [5] Sales Performance - The main brand's retail sales performance for Q4 2023 showed over 30% year-on-year growth, with a stable discount rate of 7-7.5 [10] - The company plans to open 20-30 new flagship stores in 2026 and has already opened around 30 outlet stores, with an average monthly sales performance exceeding 1 million RMB [6]

Investment Rating - The report maintains a "Buy" rating for the company [5] Core Insights - The company's performance in Q4 2025 met expectations, with the main brand, Xtep, showing stable revenue while the Saucony brand experienced a decline of over 30% year-on-year [1][3] - The company is expected to focus on the running segment in 2026, with anticipated revenue growth of 8.7% to 15.785 billion yuan and a net profit decline of 10.2% to 1.5 billion yuan [3] - The company has introduced new products, including the 160X 7th generation running shoes and the 2000 km 5th generation running shoes, which are expected to perform well in sales [1] Revenue Performance - In Q4 2025, Xtep's main brand revenue remained flat year-on-year, with strong performance in the running category and e-commerce channels [1] - The company anticipates that the running category will outperform the overall brand performance due to events like marathons and athlete sponsorships [1] Operational Performance - The company maintained excellent discount control in Q4 2025, with terminal discounts at 70-75%, and inventory turnover days at approximately 4.5 months, indicating a healthy inventory level [2] - Saucony's revenue decline accelerated in Q4 2025 compared to Q3, but improvements in brand influence and product matrix are expected to enhance same-store sales [2] Financial Projections - The company forecasts a revenue decline of 10.2% in net profit for 2026, with projected net profits of 1.5 billion yuan [3] - The earnings per share (EPS) is expected to be 0.49 yuan in 2025 and 0.54 yuan in 2026, with a price-to-earnings (P/E) ratio of 8.5 times for 2026 [4][3]

Investment Rating - The report maintains a "Buy" rating for the company [3][5] Core Views - The main brand of the company is under short-term pressure, but the Saucony brand is expected to continue its rapid growth in the future [2][8] - The company has adjusted its earnings forecast for 2025-2027, estimating earnings per share of 0.49, 0.53, and 0.59 RMB respectively, with a target price of 7.06 HKD based on a 12x PE valuation for 2026 [3][9] Financial Performance Summary - Revenue (in million RMB) is projected to be 14,380 in 2025, 15,321 in 2026, and 16,451 in 2027, with year-on-year growth rates of 5.9%, 6.5%, and 7.4% respectively [4] - Operating profit (in million RMB) is expected to be 1,974 in 2025, 2,218 in 2026, and 2,463 in 2027, with growth rates of 0.5%, 12.3%, and 11.1% respectively [4] - Net profit attributable to the parent company (in million RMB) is forecasted to be 1,366 in 2025, 1,494 in 2026, and 1,661 in 2027, with growth rates of 10.3%, 9.4%, and 11.2% respectively [4] - The gross margin is expected to improve from 44.0% in 2025 to 45.0% in 2027 [4] - The net profit margin is projected to increase from 9.5% in 2025 to 10.1% in 2027 [4] - The return on equity is expected to be 13.5% in 2025 and improve to 14.2% in 2027 [4] Brand Performance Insights - The main brand's revenue is under pressure due to a weak consumer environment and increased competition, but it is expected to stabilize through channel expansion and product innovation [8] - The Saucony brand has shown strong growth, with a revenue increase of over 30% year-on-year in the fourth quarter, and is expected to continue outperforming the industry [8]

Investment Rating - The industry rating is "Recommended" [6] Core Insights - Anta's Q4 2025 operational data shows a decline in main brand sales, while FILA and other brands experienced low single-digit negative growth and mid-single-digit positive growth, respectively. For the entire year of 2025, Anta, FILA, and other brands recorded retail sales growth of low single digits, mid-single digits, and 45-50% positive growth [2][3] - Xtep's Q4 2025 operational data indicates that the main brand's retail sales remained flat, with discounts ranging from 70% to 75%. The Saucony brand achieved over 30% year-on-year growth in retail sales. For the full year of 2025, Xtep's main brand and Saucony recorded low single-digit and over 30% positive growth in retail sales, respectively [2][3] Summary by Sections 1. Weekly Insights - Anta's Q4 2025 operational data shows a decline in main brand sales, while FILA and other brands experienced low single-digit negative growth and mid-single-digit positive growth, respectively. For the entire year of 2025, Anta, FILA, and other brands recorded retail sales growth of low single digits, mid-single digits, and 45-50% positive growth [2][3] - Xtep's Q4 2025 operational data indicates that the main brand's retail sales remained flat, with discounts ranging from 70% to 75%. The Saucony brand achieved over 30% year-on-year growth in retail sales. For the full year of 2025, Xtep's main brand and Saucony recorded low single-digit and over 30% positive growth in retail sales, respectively [2][3] 2. Market Review - The Shanghai Composite Index rose by 0.84%, while the SW textile and apparel sector increased by 3.83%, outperforming the Shanghai Composite Index by 2.99% [14] - The top five stocks in the textile and apparel sector by weekly increase were Tianchuang Fashion, Yanjing Co., Mengjie Co., Tanshan Outdoor, and Sanfu Outdoor [14] 3. Industry Data Tracking 3.1. Raw Material Data - The Australian wool market index rose by 6.49% in the week ending January 15, 2026, and has increased by 38.49% since the beginning of 2025 [4][32] - The cotton price index in China decreased slightly, with a year-to-date increase of 1.83% as of January 23, 2026 [26] 3.2. Export Data - In 2025, textile and apparel exports totaled $267.79 billion, a year-on-year decrease of 2.26% [45] - In December 2025, the export value of oilcloth, tents, and sunshades decreased by 8.89% year-on-year [50] 3.3. End Consumer Data - In December 2025, the online retail sales of the apparel industry decreased by 11.93% year-on-year, with a total of 45.55 billion yuan [3.3.4] - The total retail sales of social consumer goods in 2025 grew by 0.9% year-on-year, while online retail sales increased by 8.6% [3.3.5]

Core Viewpoint - Xtep International reported stable retail sales growth for its main brand, while its Saucony brand experienced significant growth, indicating a mixed performance across its product lines [2] Group 1: Retail Performance - As of December 31, 2025, retail sales for Xtep's main brand showed a year-on-year growth of 0%, with retail discount levels maintained between 70% to 75% [2] - The Saucony brand achieved over 30% year-on-year growth in retail sales, highlighting its strong market performance [2] Group 2: Operational Insights - For the fiscal year 2025, Xtep's main brand is expected to see low single-digit year-on-year growth in retail sales, indicating a modest outlook [2] - Inventory turnover for channels is approximately four and a half months, suggesting a stable inventory management strategy [2] - The Saucony brand continues to maintain over 30% year-on-year growth, reinforcing its position in the market [2]