Equity Analyst

Steve Zhou, CFA

Over 13 years of professional experience covering mainly Asian consumer companies in sell-side and buy-side.

Xtep International (1368 HK):  Valuation Too Cheap For A >10% Growth Stock

Xtep International (1368 HK):  Strong 3Q23 Retail Sales But At The Expense Of Higher Discounts

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/xtep-international-holdings" target="_blank" data-smartkarma-citation="entities:18118:1" rel="noopener">Xtep International (1368 HK)</a> announced an operational update for 4Q23, with retail sales growing more than 30% for the Xtep brand (off of a low base in 4Q22).</li>
<li>The overall quality of the retail sales growth is low, as the growth was mainly driven by higher discount level (around 30% compared to 25-30% in the previous quarter). </li>
<li>I still prefer Anta over Xtep at this stage, as Xtep is more of a beta play if the consumer sentiment turns around in China. </li>
</ul>



Xtep International (1368 HK) announced an operational update for 4Q23, with retail sales growing more than 30% for the Xtep brand (off of a low base in 4Q22).
The overall quality of the retail sales growth is low, as the growth was mainly driven by higher discount level (around 30% compared to 25-30% in the previous quarter). 
I still prefer Anta over Xtep at this stage, as Xtep is more of a beta play if the consumer sentiment turns around in China. 


Xtep International (1368 HK):  Strong Headline Retail Sales Growth In 4Q23 But Quality Is Still Low