Investment Rating - The investment rating for the company is "Buy" and is maintained [8]. Core Insights - The retail data for the company remains stable, with the main brand's revenue showing low single-digit growth year-on-year. Discounts range from 7% to 75%, and the inventory turnover ratio is healthy at 4 to 4.5 months. The subsidiary brand, Saucony, has seen revenue growth exceeding 20% year-on-year [2][6]. - The main brand's growth is primarily driven by the running category, while Saucony is expected to return to high growth after a short-term adjustment. Offline channels are anticipated to maintain high growth, while e-commerce growth is slightly weaker due to the company's strategy of reducing low-priced products. Future growth for Saucony is expected to accelerate as the company focuses on opening stores in key urban areas and enhancing brand presence [8]. - Overall, the running trend supports steady growth for the main brand, and despite short-term adjustments for Saucony, the long-term growth potential remains strong. The company is projected to achieve net profits of 1.41 billion, 1.58 billion, and 1.75 billion yuan for the years 2025 to 2027, corresponding to price-to-earnings ratios of 10, 9, and 8 times respectively [8][10]. Summary by Sections Retail Performance - The main brand's revenue growth is low single-digit year-on-year, with a stable discount range and healthy inventory turnover [2][6]. Saucony Brand Performance - Saucony's revenue growth exceeds 20% year-on-year, with expectations for future acceleration in growth as the brand focuses on key urban markets [8]. Financial Projections - Projected net profits for 2025, 2026, and 2027 are 1.41 billion, 1.58 billion, and 1.75 billion yuan, with corresponding P/E ratios of 10, 9, and 8 times [10].

Group 1 - The main brand of the company, Xtep, showed steady growth in Q3, with retail sales experiencing low single-digit growth year-on-year, which is a slowdown compared to the same period last year [1] - The discount level for Xtep was between 70% to 75%, remaining stable compared to the previous quarter but slightly deepened year-on-year [1] - The inventory turnover ratio is estimated to be between 4 to 4.5 months, indicating a healthy inventory management [1] Group 2 - Saucony maintained a rapid growth rate in Q3, with sales increasing by over 20% year-on-year, although the growth rate has slowed compared to Q1 and Q3 of the previous year [2] - The sales growth in Q3 is attributed to the overall consumer environment and the company's strategic adjustment in e-commerce product structure and discount control since Q2 [2] - The company expects to achieve over 30% sales growth for the entire year of 2025, with a potential for revenue to double in the next three years [2] Group 3 - The company maintains its earnings forecast, projecting earnings per share of 0.49, 0.56, and 0.62 RMB for 2025-2027 [3] - Based on comparable companies, a 15x PE valuation for 2025 is applied, resulting in a target price of 8.01 HKD [3] - The company maintains a "buy" rating based on its growth prospects [3]

Core Viewpoint - The company maintains its full-year forecasts, expecting positive revenue growth for the main brand and over 30% revenue growth for Saucony in 2025, with overall group profit growth of approximately 10% [2]. Group 1: Financial Projections - The company forecasts net profit attributable to shareholders for 2025-2027 to be RMB 1.37 billion, RMB 1.49 billion, and RMB 1.61 billion respectively, assigning a target price of HKD 8.74 for 2026 based on a 15X PE ratio [1]. - The company anticipates that by the end of 2025, inventory levels will decrease to below RMB 2 billion, indicating a healthy inventory status [2]. - The company expects a dividend payout ratio of no less than 50% for the year [2]. Group 2: Brand Performance - In Q3, the main brand experienced low single-digit growth in revenue, impacted by weather disturbances, while functional products performed exceptionally well [1]. - The company reported that Saucony's revenue in Q3 grew by over 20% year-on-year, with offline sales growth outpacing online sales due to strategic adjustments in e-commerce operations [1]. Group 3: Market Dynamics - The company noted that the e-commerce growth rate is expected to outperform offline growth, particularly in the running and functional product segments, which have a competitive advantage [1].

Core Viewpoint - Cathay Securities maintains its profit forecast for Xtep International (01368) for 2025-2027, projecting net profits of RMB 1.37 billion, RMB 1.49 billion, and RMB 1.61 billion respectively, and sets a target price of HKD 8.74 for 2026, maintaining a "Buy" rating [1][2] Group 1: Financial Projections - The company is projected to achieve a revenue growth of approximately 10% for the overall group by 2025, with the main brand expected to show positive growth and Saucony's revenue anticipated to grow by over 30% [2] - The target price for Xtep International is set at HKD 8.74 based on a 15X PE for 2026 [1] Group 2: Sales Performance - In Q3, the main brand experienced low single-digit growth in revenue, with discounts ranging from 70% to 75%, and inventory levels maintained at 4 to 4.5 months [1] - The company showed strong performance in functional products, particularly in the running category, which is expected to outpace growth in lifestyle products [1] Group 3: Channel and Product Analysis - E-commerce growth is expected to outperform offline sales, with a notable trend in revenue growth during July and August, while September's warm weather may have impacted autumn and winter product sales [1] - Saucony's offline sales continued to show high growth in Q3, with a year-on-year revenue increase of over 20%, driven by proactive adjustments in e-commerce strategies [1]

Core Viewpoint - Xtep International (01368) reaffirms its full-year performance guidance for 2025, expecting strong growth in Q4, while maintaining profit forecasts for 2025-2027. The target price is set at HKD 7.7, based on a 12.5x mid-term P/E ratio for 2026, aligning with long-term average valuation levels since 2015 [1]. Group 1 - Xtep's main brand retail sales recorded low single-digit year-on-year growth in Q3, driven by double-digit percentage expansion in e-commerce sales and strong demand for running shoes [1]. - The "X Young" series continues to positively impact the overall brand performance, with average retail discounts maintained at 25%-30% and channel inventory turnover at 4-4.5 months [1]. - Despite concerns regarding the impact of e-commerce adjustments on the Double Eleven promotion, management anticipates a gradual recovery in e-commerce sales in Q4 [1]. Group 2 - Saucony contributed significantly to the group's growth, with retail sales increasing over 20% year-on-year, primarily due to more than 30% growth in offline business driven by rising consumer demand for high-end sports and running shoes [2]. - Strategic operational adjustments were made in the online business, focusing on reducing exposure to low-priced products and tightening discount levels, which may limit short-term growth but is expected to improve profit margins [2]. - Management expects this cautious operational strategy to support a gradual recovery in e-commerce sales in Q4 [2].

Core Viewpoint - Xtep's mid-year performance for 2025 shows record profits, but concerns arise from reliance on a single product line and the need for strategic growth beyond current capabilities [2][3][4] Financial Performance - Xtep's revenue from continuing operations increased by 7.1% to 6.838 billion yuan, with net profit rising by 21.5% to 914 million yuan, marking a historical high [2] - The operating profit grew by 9.1% to 1.305 billion yuan, indicating overall positive financial health [2] Brand Performance - The main brand's revenue growth was only 4.5%, reaching 6.053 billion yuan, a decline from previous growth rates of over 10% [5] - Saucony, positioned as the "second growth curve," achieved a 32.5% revenue increase to 785 million yuan, but this only accounts for 12% of total revenue [4][3] Strategic Initiatives - Xtep plans to invest 400 million yuan to open 400 Direct-to-Consumer (DTC) stores, aiming to enhance retail control despite potential short-term profit erosion [2][6] - The company has streamlined its brand portfolio, retaining only three brands: Xtep, Saucony, and Maile, after divesting K-Swiss and Palladium [3] Market Positioning - Xtep's focus remains on the mass consumer market in China, with a strong brand identity as the "first running brand in China" [5] - The company faces challenges in diversifying its product offerings beyond footwear, which may limit growth potential compared to competitors like Anta and Li Ning [5]

Core Viewpoint - Morgan Stanley's report indicates that Xtep International (01368) is expected to benefit from the potential of Saucony, with projected sales and net profit compound annual growth rates (CAGR) of 7% and 13% respectively from 2025 to 2027 [1] Group 1: Financial Projections - The group's earnings forecast for Xtep International has been raised by 1% to 3% for the period from 2025 to 2027 [1] - The target price for Xtep has been increased from HKD 5.6 to HKD 7.4, and the rating has been upgraded from "Neutral" to "Overweight" [1] Group 2: Saucony's Growth Potential - Saucony is expected to contribute approximately mid-double-digit sales growth by 2027, with operating profit growth projected to be mid to high double digits due to expanding operating profit margins [1] - The report is optimistic about Saucony's potential, forecasting nearly 30% sales CAGR over the next three years [1] Group 3: Retail Business Outlook - Xtep International's retail business is anticipated to improve in the second quarter, benefiting from the launch of signature products [1] - Despite intense competition, strong growth in the running product category is noted, although there are concerns about pricing pressure due to ongoing macroeconomic uncertainties [1]

Core Viewpoint - Morgan Stanley's report indicates that Xtep International (01368) is expected to benefit from the potential of Saucony, with projected sales and net profit compound annual growth rates (CAGR) of 7% and 13% respectively from 2025 to 2027 [1] Group 1: Financial Projections - Xtep's earnings forecast for 2025 to 2027 has been raised by 1% to 3% [1] - The target price for Xtep has been increased from HKD 5.6 to HKD 7.4 [1] - The rating for Xtep has been upgraded from "Neutral" to "Overweight" [1] Group 2: Saucony's Contribution - Saucony is expected to contribute approximately mid-double-digit sales growth by 2027 [1] - Operating profit growth from Saucony is anticipated to be mid to high double digits by 2027 [1] - The report is optimistic about Saucony's potential, forecasting nearly 30% sales CAGR over the next three years [1] Group 3: Retail Business Outlook - Xtep's retail business is expected to improve in Q2, benefiting from the launch of signature products [1] - Despite intense competition, strong growth in the running product category is noted [1] - There are concerns regarding macroeconomic uncertainties and pricing pressures [1]

Core Insights - The company reported a 7% revenue growth in the first half of the year, with a net profit increase of 22% driven by improved profitability in ongoing operations and reduced losses from the divestment of KP [1] - For the first half of 2025, revenue grew by 7.1% year-on-year to 6.84 billion yuan, while net profit attributable to shareholders increased by 21.5% to 910 million yuan [1] - The main brand showed steady revenue growth, while the professional sports brands experienced rapid growth [2] Brand Performance - The main brand, Xtep, saw a 4.5% year-on-year revenue increase to 6.05 billion yuan, with e-commerce channel revenue growing in double digits and accounting for over 30% of total revenue [2] - The children's business outperformed the adult segment, although the overall gross margin slightly decreased by 0.3% due to lower margins in children's products and online discounting [2] - The professional sports segment, including Saucony and Myle, achieved a 32.5% revenue growth to 790 million yuan, primarily driven by Saucony [2] Profitability and Margins - The gross margin for the professional sports segment decreased by 1.6 percentage points to 55.2%, attributed to a higher proportion of lower-margin lifestyle and OG categories [2] - Operating profit for the professional sports segment nearly tripled to 79 million yuan, with an operating profit margin increase of 6.1 percentage points to 10% [2] Strategic Initiatives - The company is deepening channel management and advancing a Direct-to-Consumer (DTC) strategy, planning to open 100-200 DTC stores by 2025 and a total of 300-400 by 2026, with a capital expenditure of approximately 400 million yuan [2] - Short-term impacts on revenue and profit margins are expected from the DTC transformation, but it is seen as beneficial for long-term growth and performance enhancement [2] Dividend Policy - The company plans to distribute an interim dividend of 0.18 Hong Kong cents per share, maintaining a payout ratio of 50%, and has consistently maintained a payout ratio of over 50% for 17 consecutive years [1]

Group 1 - Company experienced an 8.3% year-on-year decline in revenue, totaling 9.16 billion RMB, due to fluctuating store traffic and increased discounts [1] - Gross margin decreased by 0.7 percentage points to 33.5%, while net profit fell by 44% year-on-year to 190 million RMB, resulting in a net profit margin of 2.1% [1] - Inventory levels remained healthy, with inventory days at 146, below the target of 150 days, and old inventory accounting for less than 9% [1] Group 2 - Online sales showed robust growth of 16%, with live streaming sales exceeding 100% growth, contributing to 33% of total revenue [2] - The company maintained its offline store count at 3,408, with a net closure of 40 stores, while same-store sales declined by 10% to 20% [2] - The company plans to optimize its product mix and develop proprietary brands, with short-term revenue contribution from these brands at only 2-3% [2]