Goldman Sachs: Lower XTEP INT'L (01368) target price to 5.7 Hong Kong dollars, maintain "buy" rating.

Goldman Sachs released a research report stating that XTEP INT'L (01368) had a net profit in the second half of last year that was 3% lower than the bank's expectations, mainly due to lower-than-expected sales of its core brands. Considering the weak offline customer traffic and the larger-than-expected impact of the shift to direct sales on sales, as well as increased investments in the Xtep brand, higher expenses for employee stock ownership plans this year, and a higher tax rate, Goldman Sachs lowered its net profit forecasts for XTEP INT'L for 2026 and 2027 by 14% to 18%, reducing the target price from 6.6 Hong Kong dollars to 5.7 Hong Kong dollars, with a unchanged 2026 forecasted P/E ratio of 11 times, and maintaining a "buy" rating. The group expects a double-digit increase in revenue and a high double-digit net profit rate in 2026. In terms of the Xtep brand, management expects revenue to grow year-on-year, reflecting confidence in the growth of the running category. However, accelerating the shift to direct sales offline (planned transition of about 500 stores this year, compared to over 100 in the second half of last year) will bring short-term pressure on sales and profit margins. As for the Saucony brand, the company is optimistic about the brand's development prospects, expecting revenue to grow by 20% to 30% this year, benefiting from product, channel, and brand upgrades. If the rebound in e-commerce channels is faster than expected, there may be surprises in growth.