23 Aug 2024
Xtep’s 1H24 revenue was up by 10.4% YoY to Rmb7,203m, mainly driven by i) 6.6% YoY growth from core brand sales to Rmb5,789m as a result of the strong orders from online channels; and ii) 9.7%/72.2% YoY increase to Rmb821m/Rmb593m for K&P/S&M. Overall GPM was up by 3.1ppt YoY to 46.0%, with main brand up 0.8ppt YoY as higher sales mix from e-commerce which commands a higher GPM, and GPM from its online biz also increased during the period, while K&P GPM up 11.4ppt YoY on increasing DTC mix and S&M GPM up 14.8ppt YoY on acquisition of entire stakes in the S&M JV. On the cost side, S&D ratio was up by 0.3ppt YoY to 23.5% in 1H24, driven by i) 11.8% YoY up in A&P amid consolidation of S&M marketing expenses; and ii) and increase in platform fees associated with higher e-commerce sales and increased DTC related expenses. Admin ratio was up 1.4ppt YoY to 11.1% on higher staff costs and S&M consolidation, in addition to higher AR and inventory provisions. As a result, 1H24NP surged by 13.0% YoY to Rmb752m. Interim-DPS was at HK$0.156, representing a payout ratio of 50%.