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.

Thematic (Sector/Industry)

<ul><li>On one hand, retail sales growth in 5-1 Golden Week was a beat (after a soft Feb-Mar and an inline Apr).</li><li>On the other hand, retail discounts surprisingly widened due to increased competition from the de-stocking by brands like Adidas and Li Ning.</li><li>While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes on the end demand and intensity of competition. </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.

On one hand, retail sales growth in 5-1 Golden Week was a beat (after a soft Feb-Mar and an inline Apr).On the other hand, retail discounts surprisingly widened due to increased competition from the de-stocking by brands like Adidas and Li Ning.While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes on the end demand and intensity of competition. 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.

China Sportswear Sector – 5-1 sales beat but competition intensified

Equity Bottom-Up

<ul><li>Beat in 1Q23E was industry leading and FY23E guidance was partly raised. Hence, we maintain</li><li>BUY given its attractive outlook and valuation (0.8x PEG).</li><li>1Q23 retail sales growth was an industry leading beat</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.

Beat in 1Q23E was industry leading and FY23E guidance was partly raised. Hence, we maintainBUY given its attractive outlook and valuation (0.8x PEG).1Q23 retail sales growth was an industry leading beatContent 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) – Strong 1Q23 with retail sales guidance raised

<ul><li>FY22 results and FY23E guidance were roughly inline but the YTD performance was impressive and solid.</li><li>We still like Xtep due to its attractive PEG of 0.7x.</li><li>FY22 results inline. Xtep’s sales grew by 29% YoY to RMB 12.9bn while net profit rose by 1% YoY to RMB 922mn.</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.

FY22 results and FY23E guidance were roughly inline but the YTD performance was impressive and solid.We still like Xtep due to its attractive PEG of 0.7x.FY22 results inline. Xtep’s sales grew by 29% YoY to RMB 12.9bn while net profit rose by 1% YoY to RMB 922mn.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) – Excellent YTD performance among all brands

<ul><li>Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.</li><li>While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.</li><li>Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.</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.

Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.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.

China Sportswear Sector – We expect prudent guidance but decent margins

<ul><li>Maintained OUTPERFORM after our Shenzhen Consumer Tour.</li><li>We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.</li><li>This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trends</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.

Maintained OUTPERFORM after our Shenzhen Consumer Tour.We visited a number of companies (catering, hotel and sportswear brands) and experts (catering &amp; shopping mall operators) during our trip to Shenzhen this week.This channel check has strengthened our OUTPERFORM view on the Consumer discretionary sector, backed by 3 trendsContent 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.

China Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

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)

China Sportswear Sector – 5-1 sales beat but competition intensified

While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes...

CMB International

Xtep (1368 HK) – Strong 1Q23 with retail sales guidance raised

Beat in 1Q23E was industry leading and FY23E guidance was partly raised. Hence, we maintain BUY given its attractive outlook and valuation (0.8x PEG).

CMB International

Xtep (1368 HK) – Excellent YTD performance among all brands

FY22 results and FY23E guidance were roughly inline but the YTD performance was impressive and solid. We still like Xtep due to its attractive PEG...

CMB International

China Sportswear Sector – We expect prudent guidance but decent margins

While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better...

CMB International

China Consumer Sector – Shenzhen Trip: sustained growth in Feb 2023

We visited a number of companies (catering, hotel and sportswear brands) and experts (catering & shopping mall operators) during our trip to...

CMB International

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