Investment Rating - The report maintains a "Buy" rating for Xtep with a target price of HKD 7.63, reflecting a 40.4% upside from the current price of HKD 5.43 [3][6]. Core Insights - Xtep's short-term outlook has improved due to increased arrangements, leading to a 2% to 5% upward revision in FY24E - 26E net profit estimates [1][6]. - The valuation remains attractive at 10 times FY24E P/E and a 14% yield, supporting the positive outlook [1][6]. - The strategic disposal of K&P is seen as beneficial, as it alleviates impairment risks and allows Xtep to focus on its core market segments [2][6]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are estimated at HKD 15,371 million, HKD 15,713 million, and HKD 17,298 million respectively, with a compound annual growth rate (CAGR) of 6% for sales and 20% for net profit [6][7]. - The net profit for FY24E is revised to HKD 1,275 million, with subsequent years showing growth to HKD 1,479 million in FY25E and HKD 1,763 million in FY26E [7][8]. - The report indicates a projected diluted earnings per share of RMB 0.483 for FY24E, increasing to RMB 0.560 in FY25E and RMB 0.668 in FY26E [7][8]. Strategic Actions - Xtep plans to acquire K&P for USD 151 million, with the entire consideration paid as a special dividend of HKD 0.447 per share, representing approximately 8% of the current market capitalization [1][2]. - The company will redeem Hillhouse's K&P convertible bonds at a total value of USD 65 million, which will further streamline its capital structure [1][2]. - Xtep aims to enhance cash flow and dividend payments, allowing for accelerated expansion of its Saucony brand, which has reached breakeven [2][6].
短期增长的巨大推动与高产量