Jingwu Finance | Huayuan Securities released a Research Report stating that XTEP INT'L (01368) core business is running footwear, with its main brand primarily covering the demand of the general public and some elite customer groups, while Saucony and Merrell products are aimed at professional running and trail running customers. The main brand's running shoe matrix can be roughly divided into elite series, professional series, and mass series, continuing to maintain the leading position of top series running shoes in the industry through technological iteration. Other brands represented by Saucony continue to promote the brand's professional running gene and expand brand coverage through commuting and leisure series, retro series. The company continues to sponsor marathon events and enhances brand image by signing sports stars for product endorsement, promoting the design and retail position of professional sports equipment.
The agency further stated that XTEP INT'L, as a leading sports apparel company in the country, focuses on the running track and has achieved multiple technological results in footwear and apparel through continuous research and development investments, building high competitive barriers. At the same time, it improves brand competitiveness through differentiated channel layouts, emphasizing e-commerce channels and reasonably utilizing sponsorships and endorsements. Long-term development potential looks large. The agency estimates that the company's net income attributable to the parent company for 2024-2026 will be 1.264 billion yuan / 1.395 billion yuan / 1.599 billion yuan, representing year-on-year growth of 22.73% / 10.36% / 14.65%.
The agency selected ANTA SPORTS and LI NING, which belong to the same sports apparel Industry, as comparable companies, with an average PE of 14.0X for 2024, while XTEP INT'L's corresponding PE for 2024 is 11.4X. Considering the company's brand image, product research and development capabilities, and marketing capabilities in the sports apparel track are excellent, it initiates coverage with a ‘Buy’ rating.