Financial Data and Key Metrics Changes - In the first half of 2023, the company's revenue was RMB 652 million, representing a 14.8% increase compared to the previous year [4][12] - Net profit increased by 12.7% to RMB 670 million, with a net profit margin of 10.2% [5][14] - The interim dividend was set at RMB 0.137 per share, with a payout ratio of 50% [5][12] Business Line Data and Key Metrics Changes - Revenue from core brands increased by 10.9% to RMB 543 million, accounting for 83.2% of total revenue [12][15] - The mass market segment saw a 15% growth, while the leisure and professional sports segments also reported significant increases [15][16] - K Swiss and Palladium brands experienced an 18.9% increase in sales, primarily driven by the Chinese market [16] Market Data and Key Metrics Changes - Retail sell-through for core brands increased by 20% in Q1 2023, with high double-digit growth continuing into Q2 [4][10] - The company reported a significant slowdown in growth starting in May, but maintained double-digit growth in July and August [10][11] - The company has 8,031 core XTEP branded stores, primarily located in Mainland China [13] Company Strategy and Development Direction - The company aims to strengthen its core brand strategy and enhance its R&D capabilities, particularly in the running segment [7][25] - There is a focus on nurturing new brands and expanding the ecosystem for running, aligning with national health and exercise policies [7][8] - The company plans to enhance its store experience and increase market share among younger consumers [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in leading the sector despite potential challenges from consumption and the economy [8][43] - The company maintains a sales growth guidance of 15% to 20% for the year [44] - Management noted that while there are uncertainties in the global economy, the demand for value-for-money products in the mass market remains strong [43] Other Important Information - The company received an upgrade in its MSCI ESG rating from BB to BBB, the highest in the industry [12] - The company is committed to sustainability, with plans to donate RMB 100 million to support youth development in rural areas [31] Q&A Session Summary Question: What is the outlook for the company's sales growth? - The company remains confident in achieving a sales growth of 15% to 20% for the year despite market fluctuations [44] Question: How is the company addressing the challenges in the retail environment? - Management highlighted the focus on enhancing brand awareness through direct-to-consumer (DTC) channels and improving store experiences [37][38] Question: What are the company's plans for new product launches? - The company plans to continue launching innovative products, particularly in the running segment, to attract both professional and mass market consumers [25][26]
XTEP INT'L(01368) - 2023 H1 - Earnings Call Transcript