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].