Xtep International (01368.HK) 1H2022 Positive profit alert in line with consensus August 8, 2022 248

PSR Recommendation: NEUTRAL Status: Downgraded
Target Price: HKD13.01

1H2022 Positive profit alert in line with consensus
Xtep announced the operation data of 2Q2022. Xtep core brand products retail sell-through
(including offline and online channels) grew by mid-teens (30 % – 35 % growth in 1Q2022),
retail discount level at 25% – 30% (25% discount at 1Q2022). For the six months ended 30
June 2022, core brand productsretail sell-through (including offline and online channels) grew
by 20 % – 25 %, and inventory turnover was around 4.5 months (about 4 months in 1H2021,
1Q2022), estimated to be related to the impact of the COVID.
Xtep also expected to record a significant increase of not less than 35% in its unaudited
consolidated profit attributable to shareholders for 1H2022 as compared to that for the
corresponding period in 2021, which is also in line with market consensus. Such increase was
primarily due to a not less than 35% growth in consolidated revenue mainly attributable to:
(1) remarkable sales fair orders resulting from encouraging retail performance of the core
Xtep brand and Xtep Kids’ business driven by their breakthrough in product innovation, retail
channel upgrade and increased brand awareness; and (2) an impressive YoY revenue growth
of over 100% for Saucony under the professional sports segment owing to its strong retail
sales particularly in its e-commerce business.

About the author

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Eric Li

李浩然先生(Eric Li) 高級分析師 現任現為輝立証券持牌高級分析師,曾任職股票基金、家族辦公室及證券公司等,擁有多年的證券研究部門從業及投資經驗,並先後於香港最暢銷的財經媒體撰寫投資專欄。畢業於香港理工大學電子計算系。 Eric is currently a licensed research analyst at Phillip Securities. Prior to joining Phillip Securities, he has years of equity research and investment experiences in asset management company, family office and securities company. Meanwhile, he has written investment columns in Hong Kong`s best-selling financial media for years. He holds Bachelor of Arts in Computing from The Hong Kong Polytechnic University.

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