Company Analysis - Xtep (1368 HK) reported a slightly weaker performance in Q2 2025, but maintained its guidance for FY25, expecting overall sales growth and a net profit increase of over 10% [2][4] - The main brand of Xtep is projected to achieve mid-single-digit growth, while Saucony is expected to exceed 30% growth [2][4] - The management remains confident in achieving the annual guidance, supported by strong performance in the running category, which saw over 30% growth in professional products [4][5] Market Overview - The Chinese stock market showed mixed results, with healthcare, consumer staples, and utilities leading, while materials, energy, and financials lagged [3] - The report anticipates a volatile phase for the Chinese stock market in Q3, with weakening fundamentals in consumption and profits, but continued liquidity may lead to structural gains [3] - The US stock market saw gains led by financials, technology, and consumer staples, with TSMC's ADR hitting new highs due to strong AI chip demand [3] Retail Performance - Xtep's retail sales growth in Q2 2025 was slightly below expectations at low single digits, attributed to increased competition and weak e-commerce growth [5][6] - The company reported a healthy inventory turnover ratio of 4-4.5 months, indicating strong inventory management [6] - Retail sales growth improved in July, driven by summer demand and promotional activities, with e-commerce performance particularly strong [6] Strategic Initiatives - Xtep is progressing with its DTC (Direct-to-Consumer) transformation, planning to repurchase 100-200 stores in Q4 and 300-400 stores in FY26, with capital expenditure of approximately 400 million RMB [6] - The company is also upgrading its product and membership management systems to enhance DTC operational efficiency [6] Investment Rating - The report maintains a "Buy" rating for Xtep with a target price of HKD 7.20, based on a 14x FY25 forecast P/E ratio, which is attractive compared to the historical average of 15x [5][6]

Investment Rating - The report indicates a strong investment trend in the automotive sector, particularly in the areas of intelligent driving and humanoid robots, suggesting a bullish outlook on the ROBO+ sector [3]. Core Insights - The report highlights the launch of Geely's "Qianli Haohan" intelligent driving system, which supports L3 level autonomous driving, emphasizing the integration of AI and driving technology [1][8]. - Uber and Waymo have initiated their partnership by launching Robotaxi services in Austin, marking a significant step in autonomous ride-hailing [1][9]. - The report identifies "embodied intelligence" as a key focus area, with humanoid robots expected to become a major growth sector alongside electric vehicles over the next 5 to 20 years [2][16]. Summary by Sections Intelligent Driving - Geely's "Qianli Haohan" system aims to enhance the safety and usability of intelligent driving through advanced AI capabilities [1][8]. - Uber's collaboration with Waymo is set to provide autonomous ride-hailing services, reflecting the competitive landscape in the autonomous vehicle market [1][9]. - Hyundai has partnered with Avride to develop autonomous ride-hailing services using the Ioniq 5 model, indicating a growing trend in the deployment of autonomous vehicles [1][10]. - The supply chain for intelligent driving is expected to see explosive growth, particularly in high-performance chips, lidar, and optical components [3]. Robotics - The report notes that humanoid robots are gaining attention during the Two Sessions, with government initiatives aimed at fostering future industries, including embodied intelligence [2][16]. - The "Humanoid Robot Standardization White Paper" has been released, outlining the current state and future direction of standardization in the humanoid robot sector [2][24][25]. - The establishment of the Chengdu Robotics Industry Association aims to promote high-quality development in the robotics sector, indicating a collaborative effort to enhance the industry [2][26]. - The report emphasizes the importance of humanoid robots in various applications, with significant potential for market growth and technological advancements [2][16]. Investment Recommendations - The report suggests focusing on the ROBO+ sector, particularly in intelligent driving and humanoid robots, as these areas are expected to reshape the automotive industry [3]. - Key players in the supply chain, including Horizon Robotics in chips and leading companies in lidar and optical components, are highlighted as potential investment opportunities [3]. - The report encourages investment in companies that demonstrate strong capabilities across the five competitive factors in the automotive sector [3].