20220714-招银国际-特步国际-01368.HK-A_resilient_2Q22_and_FY22E_guidance_upheld_8页_1mb

报告摘要

Xtep (1368 HK) Company Update Summary

Core Content

Xtep (1368 HK) has demonstrated resilience in its 2Q22 performance, with a 30%+ YoY retail sales growth. This outperformed the broader China sportswear sector, particularly compared to Anta, FILA, and Pou Sheng, which experienced declines or significant drops. The company maintained its FY22E guidance, showing confidence in its growth trajectory despite challenges posed by the COVID-19 outbreaks.

Xtep's inventory to sales ratio increased slightly to ~4.5 months in 2Q22, up from ~4 months in 1Q22, while retail discounts remained at 25%-30% off, consistent with 1Q22 levels. These metrics suggest a controlled inventory and discounting strategy.

The company issued a positive profit alert for 1H22E, forecasting 35%+ sales and net profit growth, driven by product innovation, channel upgrades, and branding improvements. Additionally, Saucony and K&P contributed significantly, with Saucony achieving 100% sales growth and K&P revising its FY22E target up to 30%+.

Key Financial Highlights

Metric	FY20A	FY21A	FY22E	FY23E	FY24E
Revenue (RMB mn)	8,172	10,013	12,615	14,941	17,069
YoY growth (%)	(0.1)	22.5	26.0	18.4	14.2
Net income (RMB mn)	513	908	1,148	1,416	1,766
EPS (RMB)	0.206	0.355	0.451	0.556	0.693
YoY growth (%)	(31.6)	72.1	26.9	23.4	24.7
P/E (x)	55.8	31.9	25.2	21.1	16.9
P/B (x)	4.0	3.6	3.4	3.3	3.0
Yield (%)	1.0	1.9	2.4	2.8	3.6
ROE (%)	7.0	11.4	13.5	15.4	17.7
Net gearing (%)	Net cash	Net cash	Net cash	Net cash	Net cash

Target Price and Rating

Current Price: HK$13.68
Target Price (TP): HK$17.04
Upside: +24.5%
Rating: BUY (Maintained)
Valuation Method: SOTP (Sum of the Parts)
Targeted P/E (FY23E): ~26x
Valuation Ratio: 23x for Xtep core brand, 2.0x P/S for Saucony and Merrell JV, and 1.2x P/S for K-swiss and Palladium

Brand Segment Performance

Brand Segment	FY22E Sales (RMB mn)	FY23E Sales (RMB mn)	FY24E Sales (RMB mn)	Growth (YoY)
Xstep core brand	11,038	13,041	14,785	18.7%
K-swiss and Palladium	1,248	1,405	1,585	17.7%
Saucony and Merrell JV	329	495	699	51.5%
Total	12,615	14,941	17,069	19.5%

Net Profit and Margin Trends

Metric	FY22E	FY23E	FY24E
Net profit (RMB mn)	1,148	1,416	1,766
Net profit margin	9.1%	9.5%	10.3%
Gross margin	41.8%	42.0%	42.2%
EBIT margin	13.7%	14.1%	14.8%
OP margin	13.7%	14.1%	14.8%

Operating and Sales Breakdown

Segment	FY22E Sales (RMB mn)	FY23E Sales (RMB mn)	FY24E Sales (RMB mn)	Growth (YoY)
Mass market	11,038	13,041	14,785	18.7%
Athleisure	1,248	1,405	1,585	17.7%
Professional sports	329	495	699	51.5%
Total	12,615	14,941	17,069	19.5%

Key Drivers and Outlook

Product innovation and branding upgrades are expected to continue driving growth.
New store openings are on track, with 100+ stores opened in 1H22 and a target of 200+ for the core brand.
E-commerce growth is accelerating, with an ~10% ASP growth in 1Q23E.
Inventory normalization is targeted for 4Q22E at ~4.0 months, which is considered reasonable given the company's wholesale business model.

Peer Comparison

Company	Ticker	Rating	12m TP (LC)	Price (LC)	Upside	Mkt. Cap (HK$ mn)	P/E (x)	P/B (x)	ROE (%)	3yrs PEG (x)	Yield (%)
Xstep Intl	1368 HK	BUY	17.04	13.68	25%	36,045	25.2	3.5	12.0	1.0	2.8
Anta Sports	2020 HK	BUY	115.47	94.65	22%	256,844	27.2	6.3	29.2	1.6	1.5
Li Ning	2331 HK	BUY	75.43	68.10	11%	178,274	32.0	6.0	26.9	1.7	1.0
361 Degrees	1361 HK	NR	N/A	3.93	n/a	8,126	10.2	0.9	8.8	0.8	2.4
Topsports	6110 HK	NR	N/A	7.00	n/a	43,409	14.0	3.3	24.1	1.2	4.7
Pou Sheng	3813 HK	NR	N/A	0.84	n/a	4,474	7.3	0.4	4.5	0.2	1.9
China DX	3818 HK	NR	N/A	0.42	n/a	2,443	11.8	0.2	4.5	0.0	5.6

Summary

Xtep's 2Q22 results were resilient, with 30%+ retail sales growth and management maintaining its FY22E guidance. The company is expected to deliver 35%+ sales and net profit growth in 1H22E, supported by product innovation, channel upgrades, and branding improvements. Xtep's target price has been raised to HK$17.04, based on a SOTP valuation and implying a ~26x P/E for FY23E. The company's wholesale business model and controlled inventory and discounting help mitigate risks. Xtep's core brand and Kids segment show strong growth, while e-commerce is expected to accelerate ASP growth. The valuation is attractive, with a 1.0x PEG, and the stock has shown positive momentum in recent months.