Goldman Sachs has a constructive view on XTEP INT'L's brand SonyKong, maintaining a "Buy" rating

Goldman Sachs published a research report indicating that XTEP (01368.HK) announced its operational performance for the fourth quarter of 2025, where retail sales of the XTEP main brand remained flat year-on-year, while Saucony grew by 30% year-on-year, moving towards its 2025 guidance (XTEP main brand showing growth, Saucony growing over 30%, and net profit growing over 10%).

Regarding the XTEP main brand, Goldman Sachs believes that its retail sales remaining flat year-on-year aligns with industry trends. However, looking ahead, management acknowledges that the retail and competitive environment has not been inspiring, but expects to maintain strength and competitive advantages in the running sector; they remain constructive about Saucony's prospects and plan to enrich the outdoor product lines of both the XTEP main brand and Saucony to capitalize on outdoor trends, with increased investment in the Merrell brand in future plans.

Considering the impact of non-core operational income, Goldman Sachs slightly raised the group's net profit forecast for 2025 by 1%, while lowering the net profit forecasts for 2026 to 2027 by 1% to 3% to reflect updates on the XTEP main brand's prospects and a more optimistic outlook for Saucony's revenue growth.

UBS has slightly lowered the target price for XTEP from HKD 6.8 to HKD 6.6, rolling the valuation benchmark forward to 2026, based on an 11 times price-to-earnings ratio (originally 12 times), maintaining a "Buy" rating