Analyst Walter Woo of CMB International Securities maintained a Buy rating on Xtep International Holdings (XTPEF – Research Report), reducing the price target to HK$7.20.
Walter Woo has given his Buy rating due to a combination of factors including Xtep International Holdings’ alignment with management and market expectations for FY24 and FY25. The company’s performance in early 2025 has been consistent with management’s targets, with retail sales growth meeting expectations and e-commerce outperforming offline sales. Additionally, the inventory to sales ratio remains healthy, and retail discounts are stable, indicating strong operational management.
Furthermore, despite conservative guidance for FY25, Xtep is expected to achieve positive sales and net profit growth, with significant contributions from the Saucony brand. The company is also focusing on expanding its product offerings and store presence, which are anticipated to drive growth. Margin expansion is expected through improved retail discounts, reduced distributor support costs, and enhanced cost control measures. The stock’s current valuation appears attractive compared to its historical average, and with favorable macroeconomic conditions and industry trends, Woo maintains a positive outlook on Xtep.
According to TipRanks, Woo is a 4-star analyst with an average return of 6.2% and a 58.43% success rate. Woo covers the Consumer Cyclical sector, focusing on stocks such as Yum China Holdings, Xtep International Holdings, and Luckin Coffee.