XTEP'S Medium-Term Net Profit Rose More Than 20% For The First Time In Five Years.

After Anta and Lining, the local sports brand in August 22nd. XTEP Released interim results for fiscal year 2018. For half a year as of June 30th, XTEP group Overall revenue grew 18.1% to 2 billion 729 million yuan, and net profit rose 20.9% to 375 million yuan.

Ding Shuibo, chairman of XTEP group, said in a performance press conference that 2018 was the new stage after XTEP completed the strategic transformation of the three year. From the latest earnings report, Revenue and net profit Both of them gained a relatively fast growth rate, and the effect of brand transformation appeared.

Unlike other sports brands in China, XTEP has long positioned sport fashion. With the rise of sports market and consumer demand for sports goods, in 2015, XTEP began to shift from fashion to professional sports, and implemented a strategy dominated by running and fashion. In order to cooperate with the transformation, XTEP has changed its products and channels.

The buy back plan at the end of 2017 is the last part of XTEP's transformation. The company said that the transformation plan is coming to an end. Most of the channels, products and shops have been transformed. The early repurchase products have made the product style and store image more uniform and fit XTEP's new sports brand image.

Affected by the change of retail channel, in the 2017 fiscal year, XTEP in the transformation period suffered from the pain of performance - the annual revenue dropped by 5.2% to 5 billion 113 million yuan, and net profit fell 22.7% to 408 million yuan.

Judging from the first transcript of 2018, XTEP's three year transformation period has proved to be effective.

Mid term results showed that XTEP's retail performance in the first half of the year was good, and the same store sales in the first quarter and the two quarter showed low double-digit and double-digit growth respectively. This is the first double-digit growth in XTEP's first double-digit growth since the first quarter of 2013.

But XTEP's gross margin declined slightly, from 43.9% in the same period last year to 43.7%, by 0.2 percentage points.

In terms of channel, e-commerce accounts for more than 20% of the total revenue. XTEP said that in the first half of the year, the brand retook the first place in Tmall's running shoes category.

At present, XTEP has 6035 entity stores nationwide. It is expected that the number of stores will expand to 6200 to 6300 by the end of 2018. The newly opened stores are mainly new sports image shops with a larger scale, in line with XTEP's new professional sports image.

In order to complement the professional sports strategy based on running, in the first half of 2018, XTEP sponsored a total of 14 running events, which was the largest local sport brand sponsoring the marathon race.

The financial report stressed that the group maintained a good net cash position, net cash and cash equivalents amounted to 2 billion 865 million yuan, equivalent to 51.9% of net assets. In addition, the average turnover days for trade receivables were further reduced from 130 days in December 31, 2017 to 113 days.

In August 22nd, the day of the earnings announcement, XTEP's shares closed down 1.93% to HK $4.57. At present, the total market value of XTEP group is about HK $10 billion 248 million.

A week ago, the two major sports brands, Anta and Lining, also released interim results.

In the first half of 2018, Anta's revenue reached RMB 10 billion 550 million, an increase of 44.1% over the same period, the highest medium term gain since its listing in Hongkong in 11 years. In the same period, Lining's revenue grew 17.9% to 4 billion 713 million yuan over the same period. Net profit rose 4 2% to 269 million yuan.