Xtep International Holdings (1368) AI Stock Analysis

• Market Cap: HK$13.76B
• Dividend Yield: 4.94%
• Average Volume (3M): 8.61M
• Price to Earnings (P/E): 8.9
• Beta (1Y): 1.00
• Revenue Growth: -12.29%
• EPS Growth: 21.00%
• Country: HK
• Employees: 8,900
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Retail
• EPS (TTM): 0.36
• Shares Outstanding: 2,806,072,300
• 10 Day Avg. Volume: 7,864,409
• 30 Day Avg. Volume: 8,606,806
• PEG Ratio: 1.74
• Price to Book (P/B): 1.55
• Price to Sales (P/S): 0.99
• P/FCF Ratio: 14.82
• 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: HK$6.99
• Price Target Upside: 34.20% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: HK$6.00 ▲(15.16% Upside)

Xtep International Holdings demonstrates strong financial performance with robust margins and effective cash flow management, which are the most significant factors influencing the score. The technical analysis indicates weak momentum, which slightly dampens the overall outlook. The valuation is reasonable, with a solid dividend yield providing additional appeal.

Positive Factors

Gross Margin Sustainability

Consistently >40% gross margins indicate durable unit economics and pricing power. High and stable gross margins provide a structural cushion against input-cost swings, enable sustained investment in R&D, marketing and retail expansion, and support long-term operating profitability.

Cash Generation & FCF Conversion

Growing operating cash flow and positive free cash flow show reliable conversion of earnings into liquidity. This durable cash generation underpins capex for stores/ecommerce, supports debt service or deleveraging, and provides flexibility for strategic investments over multiple quarters.

Channel Diversification & DTC Growth

Expansion of direct-to-consumer and e‑commerce channels reduces reliance on third-party retailers, improves margin capture and customer data, and strengthens brand control. Structurally shifting sales to DTC supports more predictable repeat business and long-term margin improvement.

Negative Factors

Recent Revenue Decline

A >12% revenue contraction is a material structural headwind. Prolonged top-line decline can erode operating leverage, reduce cash flow generation, and limit capacity to invest in product and channels. Reversing this trend is critical to sustain profit margins and strategic initiatives.

Rising Leverage Trend

A moderate but rising debt profile increases financial risk if revenue softness persists. Higher leverage can constrain capital allocation, increase interest exposure and refinancing risk, and reduce strategic flexibility, making cash generation and deleveraging priorities over coming quarters.

Wholesale Channel Concentration

Heavy reliance on wholesale/distributor channels exposes Xtep to third-party ordering cycles, inventory pushback and margin compression. While DTC is growing, execution risk and channel conflict remain, creating structural revenue and margin volatility until DTC scale materially offsets wholesale dependency.

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 generates revenue primarily through the sale of its branded sportswear products across various channels, including retail stores, e-commerce platforms, and wholesale partnerships. The company operates a vast distribution network that includes self-operated stores, franchised outlets, and strategic collaborations with major retailers. Key revenue streams include direct sales from its own retail stores, sales through third-party retailers, and online sales through its e-commerce channels. Additionally, Xtep has engaged in collaborations and sponsorships with athletes and sports events, enhancing brand visibility and driving sales. The company's focus on product innovation and expanding its market presence, particularly in the growing Chinese sportswear market, further contributes to its revenue generation.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	9.79B	13.58B	14.35B	12.93B	10.01B	8.17B
Gross Profit	4.09B	5.87B	6.05B	5.29B	4.18B	3.20B
EBITDA	1.62B	2.09B	1.93B	1.72B	1.55B	1.04B
Net Income	943.12M	1.24B	1.03B	921.69M	908.34M	513.03M
Balance Sheet
Total Assets	17.17B	15.97B	17.33B	16.49B	14.62B	12.57B
Cash, Cash Equivalents and Short-Term Investments	3.75B	2.98B	3.29B	3.91B	3.93B	3.47B
Total Debt	2.45B	3.10B	3.80B	3.47B	2.74B	2.36B
Total Liabilities	7.30B	7.27B	8.40B	8.19B	6.63B	5.27B
Stockholders Equity	9.88B	8.70B	8.86B	8.24B	7.93B	7.22B
Cash Flow
Free Cash Flow	338.63M	909.58M	759.21M	193.03M	33.96M	109.07M
Operating Cash Flow	386.88M	1.23B	1.25B	571.83M	701.35M	320.11M
Investing Cash Flow	-83.50M	651.40M	-915.03M	-872.60M	-328.63M	573.37M
Financing Cash Flow	-184.21M	-2.20B	-461.44M	-236.10M	96.26M	-380.36M

Xtep International Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 5.21 is below the 20-day moving average (MA) of 5.24, below the 50-day MA of 5.42, and below the 200-day MA of 5.58, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 43.66 is Neutral, neither overbought nor oversold. The STOCH value of 58.95 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
3709	80 Outperform	HK$4.85B	9.32	10.59%	4.83%	-7.34%	-28.66%
1368	74 Outperform	HK$13.76B	8.90	15.27%	4.94%	-12.29%	21.00%
6110	68 Neutral	HK$17.55B	13.51	12.82%	9.65%	-5.66%	-31.36%
0709	67 Neutral	HK$2.38B	10.95	10.57%	9.18%	3.78%	-21.19%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
1817	54 Neutral	HK$270.75M	7.50	4.51%	―	-7.95%	98.95%
1223	42 Neutral	HK$4.25B	-27.45	-5.37%	0.32%	1.21%	-5.68%

Xtep International Holdings Corporate Events

Xtep Plans New Convertible Bond Issue to Fund Repurchase of HK$500 Million Notes

Xtep International Holdings Limited has announced plans to conduct a concurrent repurchase of its HK$500 million 1.5% convertible bonds due 2026, which are listed on the Vienna Stock Exchange, and to issue a new tranche of convertible bonds to institutional investors. The company has appointed a dealer manager to solicit selling interest from existing bondholders and a manager to coordinate pricing and placement of the new bonds, which will be offered only to institutional investors outside the United States and not to the Hong Kong retail public. Xtep intends to use the net proceeds from the new bond issue primarily to finance the repurchase of the outstanding 2026 convertible bonds, with any remaining funds earmarked for general corporate purposes, effectively refinancing its existing convertible debt and potentially optimizing its capital structure without resorting to an equity offering.

The most recent analyst rating on (HK:1368) stock is a Hold with a HK$5.50 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.

Xtep Schedules March Board Meeting to Approve 2025 Annual Results and Consider Final Dividend

Xtep International Holdings has announced that its board of directors will convene on 26 March 2026 to review and approve the audited annual results for the financial year ended 31 December 2025, and to consider the declaration of a final dividend. The forthcoming board meeting signals the company’s transition into its full-year reporting cycle, with potential implications for shareholder returns depending on whether a final dividend is approved.

The most recent analyst rating on (HK:1368) stock is a Hold with a HK$5.50 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.

Xtep Posts Modest Core-Brand Growth as Saucony Surges Over 30% in China

Xtep International reported that its core Xtep brand saw flat year-on-year retail sell-through in Mainland China in the fourth quarter of 2025 across online and offline channels, with retail discounts in the 25%–30% range, while Saucony delivered more than 30% growth in the same period. For the full year 2025, the core Xtep brand achieved low single-digit retail sell-through growth with channel inventory turnover at around 4.5 months, indicating controlled but modest demand, whereas Saucony maintained over 30% annual growth, underscoring the group’s stronger momentum in its performance running segment despite a more subdued backdrop for its mass-market core brand; the figures are based on unaudited operational data, and investors are urged to exercise caution.

The most recent analyst rating on (HK:1368) stock is a Buy with a HK$6.00 price target. To see the full list of analyst forecasts on Xtep International Holdings stock, see the HK:1368 Stock Forecast page.