Investment Rating - Buy (Maintained) [2] Core Views - The report highlights that Xtep International's Q4 2024 retail performance met expectations, with the main brand achieving high single-digit growth across all channels, driven by functional running shoes, which grew by approximately 30% in 2024 [5] - Saucony, a subsidiary brand, continued its strong performance with a 50% growth in Q4 2024 and over 60% growth for the full year, surpassing the RMB 1 billion retail sales milestone in 2024 [5] - Online sales outperformed offline, with the main brand's e-commerce sales growing over 20% in Q4 2024, while offline sales saw low single-digit growth despite reduced foot traffic [5] - Inventory levels remained healthy, with a stock-to-sales ratio of around 4 months for the main brand, and discount rates improved year-over-year, indicating robust operational quality [5] - The company plans to further optimize its multi-brand strategy, focusing on core running businesses and enhancing the brand image of Saucony by opening flagship stores in first-tier cities [5] - Xtep International's full-year performance is expected to be positive, with inventory levels projected to decrease and cash flow improving, driven by strong retail recovery in Q4 2024 [5] Financial Data and Profit Forecast - Revenue for FY2024E is projected at RMB 13.3 billion, a 7% decline year-over-year, but expected to grow by 9% in FY2025E and FY2026E to RMB 14.5 billion and RMB 15.8 billion, respectively [4] - Net profit attributable to shareholders is forecasted to grow by 20% in FY2024E to RMB 1.24 billion, followed by 13% and 9% growth in FY2025E and FY2026E, reaching RMB 1.39 billion and RMB 1.51 billion, respectively [4] - Gross margin is expected to remain stable at 45% from FY2024E to FY2026E, while the P/E ratio is projected to decrease from 11x in FY2024E to 9x in FY2026E [4] Channel and Inventory Performance - The main brand's average monthly store sales in H1 2024 were approximately RMB 190,000, with further improvements expected by year-end due to flagship store expansions and operational optimizations [5] - The main brand's discount rate in Q4 2024 was 7-7.5%, slightly deeper than the previous quarter due to promotional activities but improved compared to the same period in 2023 [5] - Saucony's flagship stores in Beijing and Shanghai achieved monthly sales exceeding RMB 600,000, showcasing strong brand performance in key markets [5] Strategic Focus and Future Plans - Xtep International plans to continue optimizing its channel structure by introducing new running store formats in 2025, with over 60% of the main brand's stores already upgraded to the ninth generation [5] - The company will increase investment in Saucony, focusing on product and channel expansion, including the introduction of new SKUs such as commuter, OG, and retro series, aiming to make Saucony a key growth driver over the next five years [5] - The company has divested its fashion sports brand to focus on core running businesses, which is expected to strengthen its competitive advantage in the professional sports segment [5]
特步国际：四季度零售回暖，索康尼延续亮眼表现