Analyst

Steve

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xtep-international-holdings" target="_blank" data-smartkarma-citation="entities:18118:1" rel="noopener">Xtep International (1368 HK)</a> announced in-line 2023 results, with net profit up 12% yoy and sales up 11% yoy.  2024 outlook was also satisfactory.  </li>
<li>The company paid out 50% of its earnings in dividend, which amounted to a 5% dividend yield at current share price of HKD5.04.</li>
<li>The company is currently trading at 10x 2024 PE (assuming a conservative 10% net profit growth in 2024).</li>
</ul>



Xtep International (1368 HK) announced in-line 2023 results, with net profit up 12% yoy and sales up 11% yoy.  2024 outlook was also satisfactory.  
The company paid out 50% of its earnings in dividend, which amounted to a 5% dividend yield at current share price of HKD5.04.
The company is currently trading at 10x 2024 PE (assuming a conservative 10% net profit growth in 2024).


Xtep International (1368 HK):  Valuation Too Cheap For A >10% Growth Stock

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Xtep’s FY23 results were dragged by weak e-commerce sales but inline with market consensus.</li><li>Due to the macro uncertainty and high base, Xtep’s management has put aside its 5-year growth target and introduced a rather conservative target in FY24E.</li><li>This is inline with our view that Xtep may not be our sector top pick in FY24E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xtep’s FY23 results were dragged by weak e-commerce sales but inline with market consensus.Due to the macro uncertainty and high base, Xtep’s management has put aside its 5-year growth target and introduced a rather conservative target in FY24E.This is inline with our view that Xtep may not be our sector top pick in FY24E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xtep (1368 HK) - Stay Prudent as Channel Health Is the Priority

<ul><li>4Q23 results were inline with management guidance.</li><li>Despite the improved inventory level, we are still conservative on Xtep’s non-running segment, ASP and e-commerce growth in FY24E.</li><li>As a result, we have further cut our NP forecasts by 7-9% in FY24E-25E. But due to its fairly distressed valuation of 8x/ 7x FY23E/ 24E P/E, we maintain BUY.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

4Q23 results were inline with management guidance.Despite the improved inventory level, we are still conservative on Xtep’s non-running segment, ASP and e-commerce growth in FY24E.As a result, we have further cut our NP forecasts by 7-9% in FY24E-25E. But due to its fairly distressed valuation of 8x/ 7x FY23E/ 24E P/E, we maintain BUY.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xtep (1368 HK) – 4Q23 Was Inline but Macro Is Still Challenging

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang (3818 HK)</a> stands on a discount of 82.1% to NAV after factoring in the recent market rally, not limiting to its <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> holdings.</li>
<li>Its listed equities may have gained Rmb314m, but the HK$41m market capitalisation growth has not reflected this. The gains on its unlisted investments have not been included yet.  </li>
<li>CNDX is now more likely to have a positive swing in the bottom line in FY25. Its tiny sportswear business has also witnessed a sequential moderation in sales decline. </li>
</ul>



China Dongxiang (3818 HK) stands on a discount of 82.1% to NAV after factoring in the recent market rally, not limiting to its Alibaba Group Holding (9988 HK) holdings.
Its listed equities may have gained Rmb314m, but the HK$41m market capitalisation growth has not reflected this. The gains on its unlisted investments have not been included yet.  
CNDX is now more likely to have a positive swing in the bottom line in FY25. Its tiny sportswear business has also witnessed a sequential moderation in sales decline. 


China Dongxiang (3818 HK): Another Play on the Market Rally

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Hong Kong tech sector leads the market higher with increased momentum and lower volatility.  Short selling has abated with unwind of HKD carry trade.</li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener">Sands China (1928 HK)</a> had a breakout from a Falling Wedge pattern. The share price broke above its short-term averages with increasing momentum.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> broke out from its downtrend with a Reversal from its U-Shaped Bottom.  <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> broke out to a new YTD high.
</li>
</ul>


Hong Kong tech sector leads the market higher with increased momentum and lower volatility.  Short selling has abated with unwind of HKD carry trade.

Sands China (1928 HK) had a breakout from a Falling Wedge pattern. The share price broke above its short-term averages with increasing momentum.


China Feihe (6186 HK) broke out from its downtrend with a Reversal from its U-Shaped Bottom.  Techtronic Industries (669 HK) broke out to a new YTD high.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)

China

Xtep International Holdings Ltd. designs, manufactures, and markets sportwear. The Company produces footwear, apparel, and accessories.

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Xtep International (1368 HK)