Nomura: maintains Xtep International (01368) "buy" rating, target price lowered to 7.5 Hong Kong dollars.

Nomura has released a research report stating that the target price of XTEP INT'L (01368) has been raised by 5.6% to 7.5 Hong Kong dollars from 7.1 Hong Kong dollars, maintaining a "buy" rating. The report states that Xtep is expected to recover sales momentum in the fourth quarter of 2024. The company has announced its operational data for the fourth quarter of 2024: Xtep brand is showing signs of recovery, with sales in the fourth quarter recording high single-digit growth year-on-year, faster than the mid-single-digit growth in the third quarter; therefore, Xtep's full-year sales in 2024 are expected to achieve high single-digit growth year-on-year. Inventory turnover remains at a healthy level of 4 months. However, the report points out that Xtep expanded retail discounts to 25-30% in the fourth quarter, indicating the company's efforts to boost sales in the past quarter. Meanwhile, sales momentum for its brand Saucony remained robust in the fourth quarter, with a year-on-year increase of around 50%, slightly slower than the over 50% growth in the third quarter; for the full year of 2024, Saucony's sales are expected to increase by over 60%, becoming a strong emerging brand.