Investment Rating - The report maintains a "Buy" rating for Xtep International (1368 HK) with a target price of HKD 6.29 [3][4] Core Views - Xtep's main brand achieved a 10% YoY growth in retail sales in 2Q24, demonstrating strong operational resilience despite market challenges [4] - The company's online sales grew by 25% YoY in 2Q24, driven by successful e-commerce strategies and popular products like the carbon plate running shoe 360X [5] - Professional sports brands, particularly Saucony, showed robust growth in 2Q24, with plans for further expansion and marketing activities [6] - The potential divestment of the KP business in 3Q24 is expected to contribute positively to profitability, given its RMB 184 million pre-tax loss in 2023 [6] Financial Forecasts - Revenue is projected to grow to RMB 15.085 billion, RMB 15.620 billion, and RMB 17.309 billion in 2024E, 2025E, and 2026E respectively [4][10] - Net profit attributable to shareholders is expected to increase to RMB 1.291 billion, RMB 1.491 billion, and RMB 1.711 billion in 2024E, 2025E, and 2026E respectively [4][10] - EPS is forecasted to rise to RMB 0.49, RMB 0.56, and RMB 0.65 in 2024E, 2025E, and 2026E respectively [7][10] Operational Highlights - The main brand's offline sales remained stable despite weather-related challenges, supported by store optimization strategies [5] - The company's inventory turnover ratio improved to around 4 months, returning to pre-pandemic healthy levels [4] - Discounts were effectively controlled, improving from 7-7.5% in 1Q24 to 7.5% in 2Q24 [4] Segment Performance - Mass sports products, accounting for 83.3% of 2023 revenue, are expected to grow at 8.0%, 9.4%, and 8.8% in 2024E, 2025E, and 2026E respectively [10] - Professional sports products, with a 99% YoY growth in 2023, are projected to grow at 40.0%, 35.0%, and 30.0% in 2024E, 2025E, and 2026E respectively [10] - The KP business, expected to be divested in 3Q24, contributed RMB 1.07 billion in revenue in 2024E before divestment [10] Valuation - The target price of HKD 6.29 is based on a 12.0x 2024E PE, derived from the past 12-month average PE of 13.9x minus 0.5 standard deviations [4][15]
特步国际：运营效率提升，电商及专业运动突出