XTEP Ding Shuibo: Shenzhen Hong Kong Tong Will Enhance The Valuation Of Sports Stocks In Hongkong

Left: XTEP CFO He Ruibo; right: XTEP chairman and chief executive officer Ding Shuibo

From sponsoring marathon, football activities to sports training, turning its clothing store into an activity center and club for community sports enthusiasts, XTEP international, an exclusive interview with sina, has been emphasizing sports style in recent years. clothing Transformation major Sports brand And set up a new image of a representative enterprise in the national fitness and national run. For the impact of Shenzhen Hong Kong Tong, XTEP chairman and chief executive officer Ding Shuibo believes that Shenzhen Hong Kong Tong is good for the company to enhance its valuation in the capital market, but more importantly, it focuses on the operation and development of the industry.

　　 Shenzhen Hong Kong Tong will enhance the valuation of sports stocks in Hongkong

"Shenzhen Hong Kong Tong is definitely helpful for XTEP in the capital market," Ding Shuibo told sina finance. XTEP has been known for decades in various parts of the country, and is sure to attract many mainland investors after the opening of Shenzhen and Hong Kong. Ding Shuibo pointed out that the price earnings ratio of mainland sporting goods shares is about 40 times, while Hong Kong stocks are only 10-15 times, "of course there is much room for improvement".

But even though the valuation gap between the two places is relatively large, XTEP did not consider listing in the mainland. He Ruibo, executive director and chief financial officer of XTEP, believes that investors and consumer groups do not necessarily have to be consistent. XTEP's choice of listing in Hongkong is in the face of international investors. He said that although XTEP's current business is based on the three or four tier cities in the mainland, it will be more advantageous in the long run to list in the international market of Hongkong in five or ten years.

In the past two years, XTEP has been actively transforming from "clothing" which is considered outside the economy to professional sports products, and its profit has also improved continuously. In the first half of this year, net profit increased by 10.65%, benefiting from high gross margin products, and the gross profit margin of the company rose to 43.3%. Future functional sports products will also be the center of the company's development, for example, the upcoming smart running shoes will continue to raise gross margins. Ding Shuibo disclosed that at present, XTEP and even other businesses do not have the problem of "inventory", which has already been digested.

He said he did not think that the clothing industry belongs to the "sunset industry". "Clothing is first of all daily necessities, rigid demand. Second, the competition between sports brand and ordinary clothing products is not the same. Functional clothing products have strong competitiveness." The competitiveness of functional clothing comes from its technological content. XTEP's investment in research and development in the past year has increased by 20% over the past year. It will remain at about 2-3% of sales in the future. It will be a very high investment proportion for domestic brands, and the technology of its products will also become stronger and stronger. For example, the introduction of fast drying, cooling "cool dry technology" and "cool technology" on fabrics, as well as "shock absorption and rotation" and "gas energy ring" in sports shoes, will be introduced.

Nicholas Tse shares will push individual new products

Hongkong star Nicholas Tse and XTEP more than 10 years of friendship, "endorsement generation shareholder" spent HK $22 million 500 thousand stake in news, recently attracted a lot of attention. But Ding Shuibo told sina finance that Nicholas Tse had always been very involved in XTEP, "he is not just a spokesperson." For example, he said, "beacon shoes", which had been treasured by many fans of Nicholas Tse, actually participated in the design of shoes.

After this stake, Nicholas Tse will launch his personal complete new product in XTEP. Ding Shuibo said that cross-border cooperation with celebrities is very common in sports brands, such as Nike, Adidas and sports stars have launched a series of products. "Nicholas Tse is not a designer, but he will give concept, direction and inspiration, and the design of shoes will be integrated into his modeling elements." he added that the Nicholas Tse series will include shoes and clothing, and is expected to be released next year.

For Nicholas Tse to further increase his holdings, Ding Shuibo said that the cooperation of new categories has just begun, but if the future works smoothly, Nicholas Tse will have his own ideas.

　 Physical store transformed into Community Sports Club

Four years ago, the clothing industry, including sports apparel, was in a low ebb. All the major brands launched a wave of shops. XTEP also closed many stores. "Before the growth is by opening a shop, that's the old mode, and now the growth of the same store is important," Ding Shuibo pointed out. With the development of the electricity supplier, XTEP's current electricity sales account for 15% of the proportion, the growth is very fast, but he does not think that in the impact of the electricity supplier, the physical store is no longer important.

For the transformation of the past two years, Ding Shuibo feels the most profound is that since the state launched the No. 46 article in 2014 to advocate the national movement, XTEP has quickly entered the most popular "marathon" activity in China. Today, XTEP has become the largest brand sponsoring marathon event in China, and has also held many marathon events around the country. In addition to sports apparel products, the "running club" has also become a new field of XTEP business, and has built the largest running club in China at the Beijing Olympic Park. Another focus of XTEP's sports activities is campus football. Besides sponsoring and hosting the football matches between college students and middle school students, the school football training program is also launched.

In these activities, many of XTEP's physical stores have gradually become "clubs" that integrate various functions into one community or campus. All activities under the line are based on the physical store as a "node". Apart from the "experiential shop" of sports products, enthusiasts can exchange, relax, play and even enroll in events, replenish equipment and so on.