Group 1 - The core viewpoint of the report is that Daiwa has made slight adjustments to the earnings forecast for Xtep International (01368) for 2025, while lowering the 2026 earnings per share forecast by 2% due to potential slowdown in core brand revenue growth [1] - Daiwa maintains a "Buy" rating for the company, with a target price raised from HKD 6.6 to HKD 7, based on a consistent 12x price-to-earnings ratio applied to the average earnings per share for 2025 and 2026 [1] - Xtep International's net profit for the first half of this year increased by 6.4% year-on-year on a comparable basis, exceeding Daiwa's and market consensus expectations by 19% and 17% respectively, driven by strong operational cost control and improved operating profit margin in the professional sports segment [1] Group 2 - Despite the better-than-expected performance, Daiwa only made slight adjustments to the 2025 forecast, anticipating a decrease in operating profit margin in the second half of the year due to seasonal factors and increased marketing costs for Saucony [1] - The most notable aspect of Xtep International's performance is the resilience of operating profit margins in both the mass market and professional sports segments, despite a slowdown in revenue growth in the first half of 2025 [1] - The company is expected to face challenges in maintaining profit margins in the second half of 2025 due to product launches and store openings, including the release of Triumph 23 in July 2025 and lifestyle products in Q4 of this year [1] Group 3 - Daiwa believes that Xtep International's children's clothing business will provide further upside potential, with management expecting growth in this segment to outpace that of the adult market [2] - On a comparable basis, Daiwa forecasts the company's earnings growth to be approximately 5% in 2025 [2]