Selling Equipment + Competition XTEP Last Year Net Profit 620 Million Rose 30%

With the gradual development of the sporting goods industry, the performance of major sporting goods companies has begun to improve. XTEP (01368, HK) released the company's 2015 performance report yesterday. It can be seen that XTEP's net profit began to decline again after three consecutive years of decline in 2011, and finally rose again in 2015, and the increase was 30%.

Reporters also found that in the fierce competition in the industry and the previous few years of the industry "cold winter", the major sporting goods companies marketing methods began to diversify. It's not just inviting celebrities to endorse, putting into media advertisements, but also starting to deeply integrate sports events.

Some market analysts believe that the sports industry has been vigorously promoted by the state, and this year, with the Brazil Olympic Games being promoted, the sporting goods unit has the opportunity of speculation. International investment banks such as J.P. Morgan and HSBC have increased or bought XTEP ratings.

There are 7000 retail outlets.

Affected by the industry downturn in previous years, key data such as XTEP's revenue and profits have also been greatly affected. In 2013, the operating income reached a low of 4 billion 343 million yuan, while net profit reached a low of 478 million yuan in 2014. However, in 2015, XTEP's revenue and net profit began to rebound considerably. In 2015, XTEP earned 5 billion 295 million yuan, up 10.84% compared to the same period last year. Net profit reached 623 million yuan, up 30.33% compared to the same period last year.

XTEP chairman Ding Shuibo said that XTEP's innovation in 2015 helped increase the company's revenue, while the demand for professional sporting goods with higher profits increased the gross profit margin of the company by 1.4 percentage points over the same period last year. As of 2015, XTEP said there were 7000 retail outlets operated by XTEP distributors and authorized distributors. In addition, XTEP has also opened up the field of electronic commerce while operating its own stores. Besides building XTEP official website, XTEP has also worked with Tmall, Jingdong and so on. Online retailers The platform has established partnership.

XTEP also released orders for the third quarter of 2016. XTEP's order in the third quarter of 2016 will be held in January this year, and the order amount has been higher than that in the same period in 2015.

Reporters noted that at present, many mainland sporting goods companies listed on the HKEx are currently having low valuation. Bloomberg terminal data show that XTEP's P / E ratio is 12 times, which is lower than the global average of 22.25 times the industry, while the leading enterprises Nike and Adidas's P / E ratio is about 30 times.

Marathon Marathon

In 2015, XTEP tried to spanform itself from sporting goods brand into sports fashion brand, and running became a new breakthrough point. Last June, XTEP announced an in-depth cooperation with the Chi Mei Group, the main sporting event, to set up a sports event operation company and operate the city marathon from 2015 to 2017 independently.

In yesterday's report, XTEP also pointed out that in 2015, the company sponsored 17 top domestic marathons to provide running equipment for 600 thousand marathon runners. In addition to the marathon race, XTEP has a history of sponsorship of football. Apart from sponsoring China's College Football League, it also sponsored several football teams, including the Spanish league's villa group.

In fact, a series of initiatives of XTEP are close to the strategy of the world's top sporting goods companies. Guoxin Securities pointed out that Nike's success in making full use of marketing is worth pondering: marketing is the strength of Nike, and annual marketing expenses account for more than 10% of revenue, including event marketing, integrated marketing and so on.

XTEP said that in 2015, the advertising and promotion expenses of the company reached 780 million yuan, accounting for 14.7% of XTEP's revenue.