Xtep Int’l (1368 HK) The development of new brands is postponed, looking forward to the development of new brands March 25, 2021 95

PSR Recommendation: ACCUMULATE Status: Downgraded
Target Price: HKDHKD4.99

Investment Summary
Xtep Int’l announced on March 18 the company’s annual results for the year ended December
31, 2020. The company’s revenue in 2020 was basically flat at RMB 8.17 billion (2019: RMB
8.18 billion). In line with expectations, the full-year net profit was RMB 513 million, a YoY
decrease of 29.5% (2019: RMB 728 million), which was approximately 13% higher than our
expectation, mainly due to the reduction in promotion expenses during the period. Excluding
the one-off gains from the disposal of subsidiaries in 2019 and the disposal of the Supra brand
in 2020, the company’s net profit in the 2H20 increased by 23.9% YoY. The company declared
a final dividend of 7.5 HK cents per share. Together with the interim dividend, the dividend
payout ratio for the year remained at 60.0%.

About the author

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Timothy Chong
Analyst
Research

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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