4Q23 是内联的 ， 但宏仍然具有挑战性

10Jan2024 CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate Xtep(1368HK) 4Q23wasinlinebutmacroisstillchallenging 4Q23resultswereinlinewithmanagementguidance.Despitetheimprovedinventorylevel,wearestillconservativeonXtep’snon-runningsegment,ASPande-commercegrowthinFY24E.Asaresult,wehavefurthercutourNPforecastsby7-9%inFY24E-25E.Butduetoitsfairlydistressedvaluationof8x/7xFY23E/24EP/E,wemaintainBUY. 4Q23retailsalesgrowthinline.Xtep’s4Q23retailsalesgrewmorethan30%,slightlybetterthanCMBIest.of29%andinlinewithmanagement’sguidance.Suchgrowthwasanaccelerationvsthehigh-teensgrowthin3Q23,butwebelieveitwasamixtureofalowbase,warmweatherandrelativelyweake-commercegrowth.Intermsofsegment,offlinegrowthoutperformedonlinegrowthwhileXtepkidsgrowthremainedfastatmorethan30%. FY24Eguidancehasnotbeenfinalizedbutweareconservative. ManagementhasgivennoconcreteguidanceforFY24Ebutstillthink10%+ TargetPrice HK$7.07 (PreviousTP HK$7.62) Up/Downside 85.5% CurrentPrice HK$3.81 ChinaConsumerDiscretionary WalterWOO(852)37618776walterwoo@cmbi.com.hkStockDataMktCap(HK$mn) 10,038.8 Avg3mthst/o(HK$mn) 62.4 52wHigh/Low(HK$) 10.98/3.68 TotalIssuedShares(mn) 2634.8 Source:FactSetShareholdingStructureMrDingShuiPo&Family 49.0% ChinaUniversalAssetManagement 4.1% Source:HKExSharePerformance Absolute Relative 1-mth -16.3% -15.5% 3-mth -44.8% -40.3% 6-mth -47.7% -40.6% Source:FactSet listed-cosalesgrowthisreasonableifthecurrentgrowthmomentum sustains(retailsalesgrowthshouldbesimilar,asinventorygraduallyreturnstonormal).EventhoughmanagementthinkgrowthinFY24Ecouldbenormalized,aftertheinventoryre-setinFY23E,wearestillsomewhatprudentandforecastonly10%/11%retailsales/listed-cosalesgrowthin FY24E.Onthepositiveside,wearestillconfidentonXtep’srunning segment,asnewproductslike160X5.0havebeenhotsellingsincetheir launchin3Q23.Also,underaweakmacro,Xtep’smanagementhas decidedtosellmorevalueproductsbothonlineandoffline(suchasthe260X,apairofcarbonplaterunningshoespricedatRMB799,whichisoneofthemostvalue-for-moneyproductsonthestreet).Butontheotherhand,wearequitecautiousandconservativeaboutitsnon-runningsegmentsales,ASPincreasesande-commercesalesgrowth.Moreover,wedoexpectGPmarginandOPmargintoexpandinFY24E,thankstotheramp-upofthosenewbrands(lesslossesonwards). MaintainBUYbuttrimTPtoHK$7.07,basedon13xFY24EP/E(unchanged).Westillexpecttheindustrytobeunderpressurein1H24Ebeforeaturnaroundin2H24EandXtepmaynotbeourtoppickin2024,asAnta,TopsportsandPouSheng(thankstoexposuretoNike/Adidas)arelikelytobenefitmoreinanOlympicyear.However,thankstoXtep’sratherdepressedvaluation,at8xFY23EP/E,wereiterateourBUYrating.Wefine-tuneourFY23E/24E/25ENPforecastsby+1%/-7%/-9%tofactorintheslowersalesgrowthandmoreprudentmargins. EarningsSummary (YE31Dec) FY21A FY22A FY23E FY24E FY25E Revenue(RMBmn) 10,013 12,930 14,787 16,440 18,457 YoYgrowth(%) 22.5 29.1 14.4 11.2 12.3 12-mthPricePerformance Source:FactSet RecentReports: Anta(2020HK)–Aninlinebutresilient4Q23;AmerfiledforIPO (8Jan24) Topsports(6110HK)–Turnaroundcontinuesafteraresilient3Q24 (18Dec23) Topsports(6110HK)–Turnaroundisontrackdespitebumpysales (24Oct23) AntaSports(2020HK)–2023Investor Operatingprofit(RMBmn) 1,396 1,464 1,650 1,890 2,232 Dayandthenew3yearstargets:excited Netprofit(RMBmn) 889.4 912.3 1,058.1 1,266.6 1,575.3 aboutAntabrand'snewstrategies EPS(Reported)(RMB) 0.36 0.36 0.40 0.51 0.63 (19Oct23) YoYgrowth(%) 72.1 0.6 12.0 26.6 23.6 Xtep(1368HK)–Aninline3Q23and P/E(x) 21.0 26.6 8.4 7.0 5.6 strongFY24Eguidance P/B(x) 2.4 3.0 1.0 0.9 0.9 (18Oct23) Yield(%) 2.9 1.8 6.0 7.1 8.9 AntaSports(2020HK)–Earningscut ROE(%) 11.6 11.2 12.3 13.8 15.8 andde-ratingmayendhere Netgearing(%)17.914.86.44.52.4 Source:Companydata,Bloomberg,CMBIGMestimates (13Oct23) PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1 RetaildiscountswidenedQoQin4Q23,butinlinewithguidance.Xtep’sretaildiscountswereat30%in4Q23,upfrom25%to30%in3Q23,inlinewithguidanceandmainlyduetotheactiveinventoryclearanceondifferente-commercechannels. Channelinventorywasbacktoafavourablelevel.Xtep’sinventorytoretailsalesratiowasat4to4.5monthsin4Q23,improvedfrom4.5to5monthsin3Q23andwasinlinewithguidance.Moreover,theaverageageofinventoryisquitedecentalready(morethan70%oftheinventoriesarenewproductslaunchedwithin6months).Also,aspointedoutbymanagement,listed-colevelinventorymaydroptoaroundRMB1.8-1.9bnin2H23E,fromaroundRMB2.4bn,betterthantheirpreviousexpectation. Ramp-upofnewbrands,asawhole,isstillontrack.ForS&M,theretailsalesgrowthwasveryrobustataround100%inFY23Eand30%+growthinFY24Eisexpectedfromthemanagement.ForK&P,retailsalesgrowthwasataboutmid-teensinFY23E(doubledinChinabutstillweakoverseas)andthereforeonly10%+growthisexpectedinFY24E.Palladiumislikelytobethenextbrandtoachievebreakeven(hopefullyinFY24E).Hence,wethinklossesfromallthesebrands,asawhole,shouldcontinuetonarrowgoingforward. Earningsrevision Figure1:Earningsrevision New Old Diff(%) RMBmn FY23E FY24E FY25E FY23E FY24E FY25E FY23E FY24E FY25E Revenue 14,787 16,440 18,457 14,742 16