Zitong Financial APP learned that Guoyuan International released a research report saying that to maintain Xtep International's (01368) "buy" rating, revenue from 23e to 25e is expected to be 150.8x182 / 21.8 billion yuan, with a net profit of 11.2 pound 13.9 / 1.72 billion yuan respectively, with a target price of HK $10. Running shoes are the company's dominant category, and the recovery of scenes and running events so far this year has driven running growth. As for the driving force of future growth, it is expected that the future growth of the main brand is mainly driven by volume, the pricing of the same product is stable in the current consumer environment, there is still plenty of room for store expansion in the channel, and the effectiveness of multi-brand strategy is beginning to emerge.
The main points of the report are as follows:
23Q3 main brand pipeline increases by double digits, discounts are slightly deeper than Q2, and inventory is improved:
23Q3 Xtep main brand retail pipeline year-on-year + high double digits, in line with expectations. The main brand Q3 flow improved month by month, with an increase of about 10% in July, a year-on-year growth of double digits in August, a 25-30% increase driven by festivals in September, and an increase of more than 30% in Golden week. Sub-categories and channels, running and children's wear are the main drivers of growth, in which running categories increase by more than 25%, children's wear increases by more than 30%, and offline growth is higher than online growth. In terms of operating indicators, the discount on Q3 is 70-25%, which is slightly deeper than the 25% discount on Q2; the inventory-to-sales ratio at the end of Q3 improved to 4.5-5 months, compared with 5 months at the end of last quarter.
Look forward to Q4 and the whole year:
(1) pay attention to the progress of Q4 removal, and it is expected that it will take time to improve the discount. Considering that the inventory of used goods is mainly concentrated in Q4 goods, the current proportion of new / used goods is about 7%. If the depot goes smoothly, the inventory-to-sales ratio is expected to be improved to about 4 months by the end of the year. Future discount improvement depends on the progress of going to the warehouse at the end of the year; (2) 23 the guidance for the whole year is maintained, and the company has a positive outlook for Q4 and 24. Management said that the 23Q4 pipeline target is expected to increase by more than 30 per cent; due to this year's inventory removal task, 23 full-year flow growth is expected to be higher than income growth, 23 full-year flow target to maintain 20-25 per cent growth, and revenue target to maintain 15-20 per cent growth. For 24 years, management said it is expected to return to a flow growth rate of more than 20%.
The domestic flow of the new brand has increased by more than 100%, and the rhythm of the Sokoney store is as scheduled:
The domestic retail pipeline growth of the new 23Q3 brand continues the high growth trend of 23H1. The domestic store efficiency of Soconi and Gaswell brands has reached more than 300000 / month. The progress of the Soconi brand is in line with expectations, and the number of stores is expected to reach 100 by the end of the year (including about 20). The current stage aims to increase the size of the brand and reach consumers, and is expected to make a profit for the whole year.