Xtep International Holdings (1368) AI Stock Analysis

• Market Cap: $14.97B
• Dividend Yield: 42.77%
• Average Volume (3M): 11.93M
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.05
• Revenue Growth: -7.00%
• EPS Growth: 16.26%
• Country: HK
• Employees: 8,900
• Sector: Consumer Cyclical
• Sector Strength: 60
• Industry: Apparel - Retail
• EPS (TTM): 0.23
• Shares Outstanding: 2,782,493,700
• 10 Day Avg. Volume: 8,665,274
• 30 Day Avg. Volume: 11,934,591
• PEG Ratio: 7.55
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 100.08
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $6.04
• Price Target Upside: 9.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: HK$6.00 ▲(9.09%Upside)

Xtep International Holdings exhibits strong financial performance with robust margins and effective cash flow management, despite recent revenue declines and increased debt levels. Technical analysis presents a mixed view with short-term bearish momentum but long-term support, while valuation metrics suggest the stock is undervalued with a high dividend yield.

Positive Factors

Brand Growth

Brand-specific growth momentum is visible with new products and rollout of more running-related clothing.

Inventory Management

Xtep's inventory level was better than expected, contributing to a positive outlook.

Store Transformation

The plan to repurchase 100 to 200 stores and prepare for DTC transformation is still on track.

Negative Factors

Conservative Guidance

The FY25E guidance from management is considered quite conservative, suggesting caution in expected growth.

Net Profit Margins

Net profit margin will not be realized soon due to the need for more investments in marketing and R&D.

Trade War Impact

The ongoing trade war might create some drags on the overall consumer confidence and demand.

Xtep International Holdings Business Overview & Revenue Model

Company Description

Xtep International Holdings Limited engages in the design, development, manufacture, sale, marketing, and brand management of sports footwear, apparel, and accessories. The company operates in three segments: Mass Market, Athleisure, and Professional Sports. It sells its products primarily under the Xtep brand, as well as K-Swiss, Palladium, Saucony, and Merrell brand names. The company also trades in sportswear products. It offers its products through a distribution network of approximately 6,100 stores covering 31 provinces, autonomous regions, and municipalities in the People's Republic of China and internationally, as well as through online. The company was founded in 1999 and is headquartered in Xiamen, the People's Republic of China.

How the Company Makes Money

Xtep International Holdings makes money through the sale of its sportswear products, which include footwear, apparel, and accessories. The company's revenue model is primarily based on wholesale distribution to a vast network of authorized distributors and retail stores, including both directly operated and third-party stores. Key revenue streams include sales from its core Xtep brand as well as from its acquired international brands like K-Swiss, Palladium, and others. Xtep also engages in e-commerce, leveraging online platforms to reach a broader audience. Significant factors contributing to Xtep's earnings include its extensive retail network, brand recognition, strategic marketing initiatives, and partnerships with sports celebrities and events to enhance brand visibility.

Xtep International Holdings Financial Statement Overview

Summary

Xtep International Holdings shows strong financial performance with consistent revenue and profit growth, robust gross margins, and effective cash flow management. The balance sheet is stable with moderate leverage, but the recent decline in revenue and increased debt levels could pose potential risks.

Income Statement

Xtep International Holdings has demonstrated solid revenue growth over the years, with a notable increase from 2019 to 2023. The gross profit margin remains robust, consistently above 40%, indicating efficient production and cost management. However, the recent decline in total revenue from 2023 to 2024 needs attention. Net profit margins are healthy, reflecting strong bottom-line management.

Balance Sheet

The company maintains a stable equity position with a consistent increase in stockholders' equity over the years. The debt-to-equity ratio is moderate, suggesting balanced leverage, though it slightly increased in 2023. The equity ratio indicates a solid foundation, but the slight increase in total debt warrants monitoring for future stability.

Cash Flow

Operating cash flow continues to grow, showcasing solid cash generation from operations. The free cash flow has been positive, with a significant increase in recent years, reflecting good cash management. The free cash flow to net income ratio indicates effective conversion of income to cash, though the fluctuations in capital expenditures should be monitored.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.58B	14.35B	12.93B	10.01B	8.17B
Gross Profit	5.87B	6.05B	5.29B	4.18B	3.20B
EBITDA	2.09B	1.93B	1.72B	1.55B	1.04B
Net Income	1.24B	1.03B	921.69M	908.34M	513.03M
Balance Sheet
Total Assets	15.97B	17.33B	16.49B	14.62B	12.57B
Cash, Cash Equivalents and Short-Term Investments	2.98B	3.29B	3.91B	3.93B	3.47B
Total Debt	3.10B	3.80B	3.47B	2.74B	2.36B
Total Liabilities	7.27B	8.40B	8.19B	6.63B	5.27B
Stockholders Equity	8.70B	8.86B	8.24B	7.93B	7.22B
Cash Flow
Free Cash Flow	909.58M	759.21M	193.03M	33.96M	109.07M
Operating Cash Flow	1.23B	1.25B	571.83M	701.35M	320.11M
Investing Cash Flow	651.40M	-915.03M	-872.60M	-328.63M	573.37M
Financing Cash Flow	-2.20B	-461.44M	-236.10M	96.26M	-380.36M

Xtep International Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.50
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1368, the sentiment is Negative. The current price of 5.5 is below the 20-day moving average (MA) of 5.59, below the 50-day MA of 5.58, and above the 200-day MA of 5.40, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.68 is Neutral, neither overbought nor oversold. The STOCH value of 65.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1368.

Xtep International Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1368	73 Outperform	$14.97B	10.69	14.95%	42.77%	-7.00%	16.26%
Sector *	62 Neutral	$16.85B	11.50	-7.38%	2.96%	1.59%	-23.36%
GRDZF		$290.31M	10.48	10.30%	1.08%	―	―
3709	71 Outperform	HK$5.32B	10.53	10.33%	4.87%	-6.46%	-45.94%
1817	61 Neutral	HK$475.00M	13.34	4.29%	―	-4.28%	-25.99%
1223	45 Neutral	HK$2.38B	―	-5.91%	0.63%	0.93%	17.34%
6110		HK$19.41B	13.97	13.64%	6.51%	―	―

Xtep International Holdings Corporate Events

Xtep International Adjusts Convertible Bond Prices Following Dividend Declaration

Xtep International Holdings Limited has announced adjustments to the conversion prices of its 2021, 2024, and 2025 Convertible Bonds following the declaration and payment of the 2024 Final Dividend. These adjustments, effective immediately, reflect changes in the conversion price per share, with the 2021 Convertible Bonds adjusted from HK$8.3446 to HK$8.1972, the 2024 Convertible Bonds from HK$5.5 to HK$5.4028, and the 2025 Convertible Bonds from HK$6.325 to HK$6.21. This move is part of the company’s financial strategy to align with market conditions and shareholder interests.

The most recent analyst rating on (HK:1368) stock is a Buy with a HK$6.70 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.

Xtep International Ends Guarantee Fee Agreement with K-Swiss USA

Xtep International Holdings Limited announced the termination of a Guarantee Fee Agreement with K-Swiss USA, a former subsidiary, following the release of a financial guarantee by a U.S. bank. This termination, effective from May 30, 2025, will not adversely affect Xtep’s business operations or financial condition, as it was a procedural step following the disposal of KP Global Group.

The most recent analyst rating on (HK:1368) stock is a Buy with a HK$6.70 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.

Xtep International Announces Final Dividend with Scrip Option

Xtep International Holdings Limited has announced a final cash dividend of HKD 0.095 per share for the year ending December 31, 2024, with an option for shareholders to receive scrip shares instead. The price for converting cash dividends into scrip shares has been set at HKD 5.543, and the payment is scheduled for June 30, 2025. This announcement reflects the company’s commitment to providing returns to its shareholders and may impact investor sentiment positively.

The most recent analyst rating on (HK:1368) stock is a Buy with a HK$6.70 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.

Xtep International Approves Key Resolutions at AGM

Xtep International Holdings Limited announced the successful passing of all proposed resolutions at its Annual General Meeting held on April 28, 2025. Key resolutions included the approval of a final dividend, re-election of directors, re-appointment of auditors, and adoption of new share option and award schemes. These decisions are expected to bolster the company’s governance and operational strategies, potentially enhancing shareholder value and market positioning.

Xtep International Reports Q1 2025 Growth in Mainland China

Xtep International Holdings Limited reported a mid single-digit year-on-year growth in retail sell-through for its core Xtep brand in Mainland China for the first quarter of 2025, with a retail discount level of 25%–30% and a channel inventory turnover of around four months. The Saucony brand experienced a significant increase of more than 40% in retail sell-through growth, indicating strong performance and potential market expansion.

Xtep International Proposes New Share Schemes for 2025

Xtep International Holdings Limited has announced its proposal to adopt the 2025 Share Option Scheme and the 2025 Share Award Scheme, both subject to shareholder approval at the upcoming AGM. These schemes aim to incentivize eligible participants, including employees, by granting new shares, thereby enhancing the company’s ability to recruit, retain, and motivate high-caliber employees and align their interests with the company’s growth objectives.

Xtep International Holdings Announces 2025 Annual General Meeting

Xtep International Holdings Limited has announced its annual general meeting to be held on April 28, 2025, where shareholders will consider various business matters. These include reviewing the company’s financial statements for 2024, declaring a final dividend, re-electing directors, and re-appointing auditors. Additionally, the meeting will address resolutions to authorize the board to allot and issue new shares, which could impact the company’s capital structure and shareholder value.