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>Remarkable recovery vs 4Q22, improving spending power and excellent sustainability.</li><li>We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector, because: 1) the base was high in 2022, as the number of COVID-19 cases were very limited during Jan-Feb 2022 and the number of passenger journeys already grew by 31% YoY</li><li>2) the improvement is significant vs 4Q22, supported by the 89%/ 73% recovery rate of domestic tourism volume/ spending during this CNY, better than 61%/ 44% in the 10-1 holidays and any level in the entire 2022 year,</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.

Remarkable recovery vs 4Q22, improving spending power and excellent sustainability.We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector, because: 1) the base was high in 2022, as the number of COVID-19 cases were very limited during Jan-Feb 2022 and the number of passenger journeys already grew by 31% YoY2) the improvement is significant vs 4Q22, supported by the 89%/ 73% recovery rate of domestic tourism volume/ spending during this CNY, better than 61%/ 44% in the 10-1 holidays and any level in the entire 2022 year,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 Consumer Sector – Strong recovery and sustainability during CNY

<ul><li>Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.</li><li>Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.</li><li>In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.</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.

Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.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 – Sequential improvements during double 11

Equity Bottom-Up

<ul><li>Xtep’s 1H25 results were stronger than expected, mainly due to other income and Saucony.</li><li>Going into 2H25E, even though the macro backdrop is still quite worrying, Xtep should still be able to achieve its rather prudent FY25E guidance, in our view.</li><li>Therefore, with its fairly undemanding valuation of 11x FY25E P/E, we maintained BUY and lift TP to HK$ 7.39.</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 1H25 results were stronger than expected, mainly due to other income and Saucony.Going into 2H25E, even though the macro backdrop is still quite worrying, Xtep should still be able to achieve its rather prudent FY25E guidance, in our view.Therefore, with its fairly undemanding valuation of 11x FY25E P/E, we maintained BUY and lift TP to HK$ 7.39.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) - FY25E Guidance Unchanged After 1H25 Beat

<ul><li>2Q25 was a slight miss (but the market has been cautious since Jun 2025), and we are also cautious about 2H25E.</li><li>However, because Xtep’s FY25E guidance has been conservative and its inventory level has been low and healthy, we tend to believe its sales growth, inventory and discount condition could at least sustain into 2H25E.</li><li>Hence, given its undemanding valuation, we maintain BUY with TP of HK$ 7.20, based on 14x FY25E P/E. The stock is now trading at 10x.</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.

2Q25 was a slight miss (but the market has been cautious since Jun 2025), and we are also cautious about 2H25E.However, because Xtep’s FY25E guidance has been conservative and its inventory level has been low and healthy, we tend to believe its sales growth, inventory and discount condition could at least sustain into 2H25E.Hence, given its undemanding valuation, we maintain BUY with TP of HK$ 7.20, based on 14x FY25E P/E. The stock is now trading at 10x.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) - 2Q25 Was Weak but Guidance Remained Intact

<ul><li>The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD.</li><li>Management’s FY25E guidance was quite conservative (slightly faster if we adjust for DTC transformation) and we do concur with them.</li><li>However, thanks to the improved macro (favorable policies) and industry trend, we are still positive on Xtep. </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.

The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD.Management’s FY25E guidance was quite conservative (slightly faster if we adjust for DTC transformation) and we do concur with them.However, thanks to the improved macro (favorable policies) and industry trend, we are still positive on Xtep. 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) - Building a More All-Round Company in Long Run

China

Xtep International Holdings Limited designs, develops, manufactures, markets, and sells sportswear, including footwear, apparel, and accessories for adults and children. The company operates a multi-brand portfolio, featuring its core Xtep brand alongside international brands such as Saucony and Merrell. It was founded in 1987 and is headquartered in Xiamen, Fujian, China.

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Xtep (1368 HK)

China Consumer Sector – Strong recovery and sustainability during CNY

We believe the data points during the 2023 Chinese New Year are better than our expectation and meaningfully encouraging for the consumer sector

CMB International

China Sportswear Sector – Sequential improvements during double 11

Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market...

CMB International

Xtep (1368 HK) - FY25E Guidance Unchanged After 1H25 Beat

Going into 2H25E, even though the macro backdrop is still quite worrying, Xtep should still be able to achieve its rather prudent FY25E guidance,...

CMB International

Xtep (1368 HK) - 2Q25 Was Weak but Guidance Remained Intact

However, because Xtep’s FY25E guidance has been conservative and its inventory level has been low and healthy, we tend to believe its sales growth

CMB International

Xtep (1368 HK) - Building a More All-Round Company in Long Run

The FY24 results were inline with BBG estimates and mgmt. guidance and so do the numbers in 2025 YTD. Management’s FY25E guidance was quite...

CMB International

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