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]

Investment Rating - The report maintains a "Buy" rating for key companies in the sports footwear and apparel sector, including Anta Sports, Li Ning, and Xtep International, with respective 2025 PE ratios of 18x, 19x, and 12x [5][9][10]. Core Insights - The sports footwear and apparel sector shows robust growth, with a 9.1% year-on-year revenue increase to 65.9 billion yuan in H1 2025, and a net profit growth of 8.2% to 10.54 billion yuan after adjusting for one-time gains and losses from the previous year [1][17]. - A-shares in the branded apparel sector experienced stable revenue but significant profit pressure, with a slight revenue decline of 0.1% and a net profit drop of 17.5% in H1 2025 [2][17]. - The textile manufacturing sector faced a weakening trend in Q2 2025 compared to Q1, with a revenue increase of 2.7% but a net profit decline of 9.8% [3][17]. - The gold and jewelry sector saw weak demand, with gold jewelry consumption down 27% and 24% in Q1 and Q2 2025, respectively, highlighting the importance of product and brand strength [4][17]. Summary by Sections H-Shares Sports Footwear and Apparel - Revenue for key companies grew 9.1% to 65.9 billion yuan, with net profit increasing 8.2% to 10.54 billion yuan after adjustments [1][17]. - Companies are focusing on expanding differentiated store formats and enhancing product performance in running shoes while entering new outdoor categories for long-term growth [1][17]. A-Shares Branded Apparel - Revenue remained stable with a slight decline of 0.1%, while net profit fell 17.5% due to increased sales expenses [2][17]. - The home textile category showed stable demand, while fashion and leisure apparel companies exhibited varied performance [2][17]. - The outlook for H2 2025 suggests potential easing of profit pressure as companies manage expenses more effectively [2][17]. Textile Manufacturing - The sector's performance weakened in Q2 2025, with revenue growth of 2.7% and a net profit decline of 9.8% [3][17]. - The impact of changing tariff policies is noted, with Southeast Asian products gaining market share in the U.S. [3][17]. - Companies with integrated and international supply chains are expected to benefit from market share gains in the long term [3][17]. Gold and Jewelry - Overall demand for gold jewelry remains weak, with significant declines in consumption [4][17]. - Companies with strong product and brand capabilities are focusing on product development and marketing to differentiate themselves in a competitive market [4][17].