20231114-招银国际-特步国际-01368.HK-Guidance_cut_after_a_weak_Double_11_festival_9页_1mb

Xtep (1368 HK) recent company update highlights a weak Double 11 festival, with GMV growth of 20% YoY but falling short of targets due to high e-commerce base, weak macro demand, unfavorable weather, and increased competition. Core brands lagged, but other brands like Saucony and Merrell performed well. Despite this, management maintains a 30% retail sales growth target for 4Q23E, driven by strong offline performance in September-October, and expects inventory to normalize by FY23E. However, FY23E guidance for sales growth and net profit was revised down due to sluggish e-commerce performance and higher expenses. Current valuation at 14x FY23E P/E is deemed not overly demanding, with the buy recommendation unchanged but target price lowered to HK$8.58 from HK$11.41, reflecting increased uncertainty. Analysts note positive factors like healthy new/old product mix and improved gross margins, but caution on industry-wide challenges in the second half of 2023E and online channel risks. Financial metrics show stable EBIT and net profit margins, with a target growth outlook for FY24E revised to moderate sales and net profit increases.