Core Viewpoint - Guosheng Securities reports that Xtep International (01368) is a leading sportswear company in China with significant advantages in the professional running sector, and expects the company's net profit attributable to shareholders to reach 1.365 billion, 1.504 billion, and 1.631 billion yuan for 2025-2027, corresponding to a PE of 11 times in 2025, maintaining a "Buy" rating [1] Group 1: Revenue Performance - Xtep's main brand revenue showed low single-digit year-on-year growth in Q3 2025, with the running category experiencing strong growth of over 20% [2][3] - The e-commerce channel is expected to outperform offline sales, with the company optimizing its offline channel by closing underperforming stores and opening high-quality image stores [2] Group 2: Inventory and Discount Management - Xtep's channel inventory turnover days remained healthy at around 4 to 4.5 months as of the end of Q3 2025, consistent with Q2 2025 and slightly higher than Q3 2024 [3] - The overall terminal discount for Q3 2025 was between 70% to 75%, stable compared to Q2 2025 but slightly deeper than Q3 2024 [3] Group 3: Future Outlook - For 2025, the company expects a revenue growth of around 7% and a net profit growth of approximately 10%, driven by a cautiously optimistic operational strategy and the advancement of DTC (Direct-to-Consumer) business [4]

Core Viewpoint - Guosheng Securities reports that Xtep International (01368) is a leading sports goods company in China, with significant advantages in the professional running sector. The profitability of Saucony is gradually expanding, and the firm expects the company's net profit attributable to shareholders to reach 1.365 billion, 1.504 billion, and 1.631 billion yuan for 2025-2027, corresponding to a PE ratio of 11 times for 2025, maintaining a "Buy" rating [1]. Group 1: Revenue Performance - Xtep's main brand revenue showed a low single-digit year-on-year growth in Q3 2025, while Saucony's revenue grew over 20%, indicating overall stable performance [2]. - The growth in Xtep's main brand is driven by the running category, with a healthy inventory level. The company is optimizing its channel structure, with e-commerce sales expected to outperform offline sales this year [2]. - The company is enhancing operational efficiency by closing underperforming stores and opening high-quality image stores, while also focusing on product updates in the running segment [2]. Group 2: Operational Metrics - Xtep's channel inventory remains at a healthy level, with terminal discounts slightly deepening year-on-year, ranging between 70% to 75% [3]. - As of the end of Q3 2025, the inventory turnover days for Xtep's brand channels were around 4 to 4.5 months, consistent with Q2 2025 and slightly higher than Q3 2024, but still within a controllable range [3]. - Saucony continues to enhance its brand image and optimize channels, with a revenue growth of over 20% in Q3 2025. The brand is expected to maintain rapid growth in offline channels while deepening its focus on professional running [3]. Group 3: Future Outlook - For 2025, the company anticipates a revenue growth of approximately 7% and a net profit growth of around 10%, as the consumption environment is in a phase of volatile recovery [4]. - The company will adopt a cautiously optimistic operational strategy for its main brand, alongside the advancement of its DTC (Direct-to-Consumer) business [4].

10月19日晚，苏州湾文化中心阅湖台广场流光溢彩，2025苏州湾时尚趋势发布会在此盛大举行。本次活动以"苏州湾，与世界共时尚"为主题，汇聚上久楷 宋锦、特步、丁非高定等领军品牌与顶级设计力量，通过四场主题大秀与全民互动体验，具象化"色彩、面料、纹样、功能"等时尚符号，不仅彰显了中国 时尚产业的专业高度与权威影响力，更构建起连接全球潮流与本土文化的桥梁。 发布会现场，四场主题大秀相继亮相，各自呈现了独特的时尚理念与设计哲学。丁非高定以《虹》为主题，每一处细节都彰显"设计为核"的高定精神。开 场以水墨意境的"白蓝渐变"呼应江南水乡底蕴；中段"紫绿交织"展现自然灵性；后段"银红碰撞"以未来主义金属光泽与生命原力红收尾，形成"地方美学 —世界共鸣"的色彩哲学。"在丁非的时尚宇宙中，'非遗'并非尘封的遗产，而是一枚蕴藏着古老生命力的'茧'。"丁非高级定制合伙人宁婉彤表示，当古老 的技艺在当代的湖面上激起涟漪，它所泛起的虹彩，足以惊艳世界。 横扇毛衫是吴江太湖新城的本地特色产业，本次发布会，横扇毛衫与两次荣获中国时装设计最高"金顶奖"的设计师刘勇强强联手，以"云絮织章"为主题， 全方位诠释针织纱线的"时尚"魅力。整组设计 ...

17 October 2025 | 5:27PM HKT Equity Research Xtep International Holdings (1368.HK) FY25 guidance reiterated; Xtep brand in-line while Saucony set for 4Q acceleration; Buy 1368.HK 12m Price Target: HK$6.80 Price: HK$6.01 Upside: 13.1% Xtep reported 3Q25 operating results with Xtep core at LSD% yoy (in-line) retail sales growth and Saucony at >20% yoy (slight miss). The company reiterated full year guidance of positive growth at Xtep brand, >30% for Saucony, and >10% NP growth. For Xtep core, we believe the L ...

Summary of Xtep International Conference Call Company Overview - **Company**: Xtep International - **Date**: October 17, 2025 Key Points Industry and Market Performance - Xtep International anticipates accelerated sales in Q4, with online channels (Tmall, live streaming, Douyin) maintaining double-digit growth [2][3] - The sales of the 2000 km flagship running shoes have doubled, while offline sales remain stable, with stores in third and fourth-tier cities accounting for over 70% [2][3] - Functional running shoes and outdoor categories have achieved double-digit growth, with the marathon season expected to boost running shoe sales [2][3] - The Saucony brand experienced over 20% growth in Q3, with offline sales growth exceeding 30% [2][6] Financial Guidance - Xtep maintains a full-year profit growth guidance of over 10%, with the main brand expected to grow and Saucony's revenue projected to increase by over 30% [2][10] - The company plans to open 70-100 new outlet stores, with average monthly sales per store reaching over one million [2][5] Strategic Initiatives - Xtep is upgrading store images, with over 70% of stores reflecting the new design [3][4] - The company is implementing a Direct-to-Consumer (DTC) strategy, expected to officially launch in Q4, with plans to recover approximately 400 stores by the end of next year [4][16] - New outlet concepts, "Leading Outlet" and "Selected Outlet," are being introduced, focusing on high-end running products and a diverse product selection [4][19] Product and Sales Strategy - The main brand's overall performance in Q3 showed low single-digit growth, with children's business outpacing adult sales [3][20] - The company is focusing on enhancing its product lines, particularly in running and outdoor categories, while also addressing the impact of macroeconomic conditions on lifestyle products [3][9] - The introduction of new winter products and collaborations is expected to boost sales in Q4 [9][13] E-commerce and Promotional Activities - E-commerce adjustments have led to a slight decline in Saucony's sales growth in Q2 and Q3, but improvements are anticipated during the upcoming promotional periods [8][9] - The company is preparing for significant sales events like Double Eleven and Christmas, aiming to leverage these opportunities for growth [12][22] Inventory and Financial Health - Xtep aims to maintain inventory below 2 billion yuan by year-end, with healthy inventory levels across all channels [18] - The company plans to maintain a dividend payout ratio of no less than 50% [18] Future Outlook - Xtep remains confident in achieving its goal of tripling revenue by 2027 and maintaining a profit margin of 15%-20% in the next 3-5 years [11][17] - The company is optimistic about the sports industry’s growth potential, supported by government policies promoting sports consumption [7] Additional Insights - The Saucony brand's international business growth is positively impacting domestic operations, with flagship stores in Tokyo and London performing well [17] - The children's segment has shown significant growth, aided by the brand's repositioning and targeted marketing strategies [20][21] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Xtep International's performance, market strategies, and future outlook.

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 8.01 HKD based on a 15x PE valuation for 2025 [3][10]. Core Insights - The company shows resilience in its operations for the third quarter, particularly in the running segment, with expectations for continued competitive strength [2]. - The main brand, Xtep, has demonstrated steady growth, while the subsidiary brand, Saucony, has shown strong revenue growth, indicating a positive outlook for the company's multi-brand strategy [9]. Financial Performance Summary - Revenue projections for 2025-2027 are estimated at 14,452 million, 15,795 million, and 17,244 million RMB, respectively, with expected growth rates of 6.4%, 9.3%, and 9.2% [4]. - The company's net profit attributable to the parent company is forecasted to be 1,369 million, 1,558 million, and 1,745 million RMB for 2025-2027, reflecting growth rates of 10.6%, 13.7%, and 12.0% [4]. - Earnings per share are projected to increase from 0.49 RMB in 2025 to 0.62 RMB in 2027, with corresponding growth rates [4][10]. - The gross margin is expected to improve from 44.0% in 2025 to 45.0% in 2027, indicating enhanced profitability [4]. Market Performance - The company's stock price as of October 17, 2025, is 5.8 HKD, with a 52-week high of 6.64 HKD and a low of 4.26 HKD [5]. - The company has a market capitalization of 16,254 million HKD [5]. Competitive Landscape - The report highlights the competitive dynamics within the industry, noting that the company is well-positioned in the running segment, with a focus on product innovation and channel optimization [9]. - The performance of the Saucony brand is particularly noted for its potential growth, with expectations of over 30% sales growth for the year [9].

Investment Rating - The report maintains a "Buy" rating for the industry, highlighting potential growth opportunities in the textile and apparel sector [20][25]. Core Insights - The textile and apparel sector has shown resilience, with the SW textile and apparel index outperforming the SW All A index by 3.3 percentage points during the period from October 13 to October 17, 2025 [3]. - Domestic demand is gradually recovering, while external demand remains volatile, emphasizing the value of globalized production capacity [10][11]. - The report suggests that companies with mature overseas capabilities and the ability to allocate production globally will benefit from the ongoing shifts in the supply chain due to U.S. tariff policies [8][11]. Summary by Sections Industry Performance - The SW textile and apparel index decreased by 0.3%, while the SW apparel and home textiles index increased by 0.4%, outperforming the SW All A index by 4.0 percentage points [3]. - Retail sales in the clothing, shoes, and textiles category reached 940 billion yuan from January to August, reflecting a year-on-year growth of 2.9% [10]. Export Data - In September, China's textile and apparel exports amounted to $24.42 billion, a year-on-year decline of 1.0%. However, textile yarn, fabric, and products saw an increase of 6.4% [10][44]. - Vietnam's textile exports grew by 9.1% in the same period, indicating a shift in production orders and competitive advantages for overseas production [8][11]. Cotton and Wool Prices - As of October 17, the national cotton price B index was reported at 14,683 yuan per ton, down 0.6% from the previous week [46]. - The Australian wool index showed a significant year-on-year increase of 30.7%, indicating strong demand in the wool market [10]. Company Performance - 361 Degrees reported a 10% year-on-year increase in retail sales for its main brand and children's line, while e-commerce sales grew by approximately 20% [16]. - Xtep International's main brand saw a low single-digit growth in retail sales, with online sales outperforming offline [22]. - The report highlights the strong performance of companies like Bosideng, Anta, and Li Ning, suggesting they are well-positioned to capitalize on the upcoming winter season [9][14]. Investment Recommendations - The report recommends focusing on high-quality domestic brands that are beginning to reverse their challenges, particularly in the sports and outdoor segments [14]. - Specific companies highlighted for investment include Bosideng, Anta, and 361 Degrees, with a suggestion to monitor Xtep and other emerging brands [14].

Investment Rating - The report maintains a "Buy" rating for the textile and apparel industry, highlighting the resilience of the sportswear segment and the potential for growth in domestic demand [22][27]. Core Insights - The textile and apparel sector outperformed the market, with the SW textile and apparel index declining by 0.3%, outperforming the SW All A index by 3.3 percentage points from October 13 to October 17 [3]. - Recent industry data indicates a 2.9% year-on-year increase in retail sales for clothing, shoes, and textiles, totaling 940 billion yuan from January to August [10]. - The report emphasizes the significance of overseas production capacity and the upcoming third-quarter performance reports from various companies, suggesting that firms like Yanjiang and Nuobang may benefit from industry opportunities [8][10]. Summary by Sections Textile Sector - The textile export value for September was $12 billion, reflecting a year-on-year increase of 6.4%, while the overall textile and apparel export value for the first nine months was $221.69 billion, down 0.3% year-on-year [11][46]. - The report notes that the U.S. tariff policies are causing a divergence in production locations, favoring companies with established overseas capabilities [8][11]. Apparel Sector - The third-quarter operational data from Xtep and 361 Degrees shows resilience in the sportswear segment, with 361 Degrees reporting a 10% increase in offline sales for its main brand and children's line [9][24]. - The report recommends focusing on Bosideng due to favorable conditions for winter clothing sales, extended sales windows due to the delayed Spring Festival, and a high dividend yield [9][10]. Key Company Performance - 361 Degrees reported a 10% year-on-year increase in offline sales and a 20% increase in e-commerce sales for Q3 2025, demonstrating strong operational resilience [17][24]. - Xtep's main brand saw low single-digit growth in Q3, with online sales outperforming offline sales, particularly in children's and outdoor products [24][25]. Market Trends - The report highlights a mild recovery in domestic demand, with retail sales for clothing and textiles showing positive growth trends [10][39]. - The competitive landscape is shifting, with companies that can adapt to changing consumer preferences and optimize their supply chains expected to perform better [8][10].

Core Insights - The company reported Q3 2025 operational data, indicating a low single-digit year-on-year growth in retail sales for its main brand, with discounts ranging from 70% to 75% [1] - The retail sales of Saucony exceeded 20% year-on-year growth in Q3 2025, despite a decline compared to over 50% growth in Q3 2024 [1] Retail Performance - Q3 2025 retail sales showed low single-digit year-on-year growth, with the growth rate remaining flat compared to Q2 2025 [1] - The retail discount for Q3 2025 was maintained at 70% to 75%, consistent with Q2 2025, while slightly decreasing from 75% in Q3 2024 [1] - Channel inventory turnover was 4 to 4.5 months in Q3 2025, slightly up from 4 months in Q3 2024 and flat compared to the first half of 2025 [1] Brand Analysis - Saucony and Merrell benefited from superior performance in professional running and outdoor segments [1] - The growth of Saucony's retail sales in Q3 2025 was over 20%, with growth rate flat compared to Q2 2025, but down from over 50% in Q3 2024, attributed to adjustments in the e-commerce strategy [1] Investment Recommendations - Short-term impacts from the DTC strategy may negatively affect sales, but it is expected to enhance consumer interaction and brand loyalty in the long run [1] - Saucony plans to expand its product matrix and develop retro and commuting series to meet diverse consumer needs, while also opening high-end stores in first and second-tier cities [1] - The company maintains revenue forecasts of 14.286 billion, 15.558 billion, and 17.251 billion yuan for 2025, 2026, and 2027, respectively, with net profits of 1.374 billion, 1.511 billion, and 1.664 billion yuan for the same years [1] - The projected EPS for 2025, 2026, and 2027 is 0.50, 0.54, and 0.60 yuan, respectively, with a "buy" rating maintained [1]

Investment Rating - The report maintains a "Buy" rating for the company [2][8] Core Views - The company's main brand revenue performance in Q3 is stable, with children's and online sales showing growth. The overall channel revenue for the main brand increased by a low single-digit percentage year-on-year, consistent with Q2's performance. Online sales outperformed offline, maintaining double-digit growth, while children's products outperformed adult products. Running and outdoor categories achieved double-digit growth, and functional products accounted for over 60% of the brand's offerings, stabilizing the core business [5][8] - The company is actively optimizing its channel structure and accelerating its layout in outlet stores. The new store formats have already exceeded 70% of the total store count, with a focus on high-end outlet malls. The company plans to expand its outlet store count to 70-100 by 2026, aligning with positive market trends in outlet channels [8][8] - The company is progressing steadily in its Direct-to-Consumer (DTC) transformation, planning to reclaim approximately 100 stores in Q4, with a total of 400 stores by the end of 2025. This move is expected to enhance long-term channel competitiveness [8] - The company is optimizing its multi-brand matrix by divesting from fashion sports brands and focusing on core running business, which is expected to strengthen its competitive position in the running segment [8] Financial Data and Profit Forecast - The company's revenue for FY2023 is projected at 143 billion RMB, with a year-on-year growth rate of 11%. The net profit attributable to shareholders is expected to be 10.3 billion RMB, reflecting a 12% increase year-on-year. The earnings per share (EPS) is forecasted to be 0.41 RMB [6][18] - For FY2024, revenue is expected to decline by 5% to 136 billion RMB, while net profit is projected to increase by 20% to 12.4 billion RMB. The EPS is anticipated to remain at 0.49 RMB [6][18] - The company forecasts a gradual increase in revenue and net profit from FY2025 to FY2027, with net profits expected to reach 16.0 billion RMB by FY2027, corresponding to a price-to-earnings (PE) ratio of 9 [6][18]