Three Years After The Completion Of The First Examination, XTEP'S 2018 Revenue 6 Billion 400 Million Presents A New Machine.

In March 12th, XTEP released its 2018 annual performance: 1-12 months in 2018, XTEP's revenue was 6 billion 383 million yuan, an increase of 25%, operating profit increased 44% to 1 billion 44 million, net profit attributable to shareholders of listed companies was 657 million, up 61% over the same period.

At the same time, XTEP announced a dividend of 20 Hong Kong cents per share, with a dividend payout ratio of 60%.

XTEP said revenue growth was mainly due to: 1. sound product mix and good acceptability, resulting in a higher sales rate and an increase in replenishment orders from total agents; 2. as a result of the inventory repurchase in 2017, the demand for total agent replenishment was greater; and 3., from the upgrading of stores and the optimization of retail networks, the sales performance of downstream retailers was strong.

This is the first annual performance report of XTEP after the completion of the three year pformation. The marked increase in revenue and net profit indicates that XTEP's three year pformation has withstood the test in the first year of the market, enabling XTEP to sit firmly in the position of the third sports brand of China.

Gross margin increased by 0.4 percentage points to 44.3%, a record high since listing.

Net interest rate also increased by 2.3 percentage points from last year's 8% to 10.3%.

The retail sales of XTEP retail network showed double-digit growth.

All of this shows that after three years of pformation, XTEP's operating efficiency has been further improved.

In terms of working capital turnover, the amount of payroll trade and the amount of money paid for sweaters had been reduced by 25 days or so. Although the turnover of inventory has increased by 5 days to 80 days, it is still at a relatively healthy level.

As of December 31, 2018, XTEP had a total of 6230 stores at home and abroad, and opened about 200 stores in China in 2018.

Among them, the total number of XTEP children is about 450, and the growth rate of XTEP children in 2018 is more than 50%.

At present, there are 40 exclusive agents in XTEP, and about 60% of them have direct businesses.

In addition to offline stores, the contribution of XTEP electricity providers accounted for more than 20% of sales.

In this earnings report, XTEP highlighted runners.

The first sentence on the first page of the earnings report is XTEP: the first choice for Chinese runners, photos of XTEP running clubs and running shoes.

XTEP has repeatedly stressed that it is the first domestic brand of the Chinese marathon. It has become the largest sporting goods brand in China sponsored by marathon in four years (42 games in 2018).

Just one day before the earnings announcement, XTEP launched a 2019 Xrunner XTEP running strategy in Xiamen, aiming to put forward a more precise and detailed support plan for different types of runners.

In 2018, the growth rate of footwear business was 20.5%, reaching 3 billion 925 million, but the most encouraging growth was clothing and accessories, with an increase of 32.3% and 36.5% respectively.

This has reduced the proportion of shoe business to revenue from 63.7% to 61.5%, but this proportion is still the highest among the four major sports brands in China.

Just last week, XTEP announced that XtepHoldco (XTEP wholly owned Affiliated Companies) and its joint venture partners (Wolverine wholly-owned Affiliated Companies) entered into a number of joint venture agreements to carry out the development, marketing and distribution of footwear, clothing and accessories of Merrell (MAI LE) and Saucony (St. John's) brand in mainland China, Hongkong and Macao.

This will enable XTEP to further develop itself into a mature consumer, market and channel to form a brand aggregation effect.