Xtep Int’l (1368 HK) Outstanding performance in 1H21, the five-year plan provides clear development direction September 16, 2021 280

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD18.75

Investment summary
In1H21, the company’s revenue recorded CNY 4.14 billion, an increase of 12.4% Yoy; net profit
attributable to the parent company was CNY 427 million, an increase of 72.0% Yoy. The net
profit margin for 1H was 10.3%, an improvement of 3.6 ppts Yoy, mainly due to 1) the
improvement in GPM, and 2) the Xinjiang cotton incident brought organic traffic to the
company’s products and improved the expense ratio during the period. EPS recorded CNY
17.1 cent, an increase of 69.2% Yoy. Declared an interim dividend of HKD 11.5 cents per share,
maintaining a dividend payout ratio of 60.0%

About the author

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Timothy Chong

Timothy Chong received Bachelor’s Degree with first class honor in Banking and Finance from University of Leicester. He is currently studying Master of investment management in Hong Kong Polytechnic University. Before joining Phillip Securities, Timothy worked at BOCOM international and he is equipped with years of experience in the capital market. Timothy is now a licensed research analyst at Phillip Securities and covers Consumer / Property Management sectors.

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