Bank of China Securities released a research report stating that maintaining the “buy” rating of XTEP International (01368), under the current share capital, the EPS for 2023-25 is expected to be 0.42/0.52/0.63 yuan, respectively, an increase of 21%/23.5%/20% over the previous year. The company's overall revenue and performance have maintained steady growth in the past five years. As a strong sports nation and national fitness have become important strategies in China, in recent years, policies have driven the development of the sports industry, and industry concentration has also continued to increase. In 2022, China's sportswear industry CR10 was 85.5%, showing a leading agglomeration effect. Leading local enterprises give full play to their advantages in scale and brand influence, and their market share is rising year by year. It is expected that the leading market share will continue to expand in the future.
According to the report, XTEP is based on professional sports, and multiple brands are co-driving growth. In terms of the main brand and product side, the company uses shoe technology to enhance functional products, and has been recognized by professional runners for its good quality and high cost performance ratio. In 2022, it ranked first among national brands in five domestic competitions. On the channel side, the company improved store efficiency through multi-dimensional upgrades such as store image, channel structure, and business model. In terms of online channels, the company improved quality and efficiency, and e-commerce channel revenue increased from 20% in 2018 to about 30% in 2022. On the marketing side, the company actively sponsors marathons and running events, maintains the running ecosystem, and attracts young consumers through entertainment marketing and celebrity spokespersons. Products, channels, and marketing make multi-dimensional efforts to accelerate the increase in the influence of the main brand of Testep. Overall, the bank is optimistic that the company will maintain a rapid growth trend driven by a multi-brand strategy.