Xtep (SEHK:1368): Reassessing Valuation After Updated Guidance, Saucony Growth Plans, and Inventory Progress

Xtep International Holdings (SEHK:1368) just reaffirmed its 2025 guidance while outlining an aggressive plan to double Saucony revenue by 2027 through steady store openings and tighter inventory management, with a target inventory level below RMB 2 billion.

See our latest analysis for Xtep International Holdings.

Despite the reaffirmed guidance and Saucony expansion story, the share price has cooled recently, with a 90 day share price return of negative 11.27 percent. At the same time, the 5 year total shareholder return sits at a strong 116.08 percent, suggesting long term momentum is still intact while near term sentiment is more cautious.

If this kind of multi year compounding interests you, it is worth broadening your watchlist and exploring fast growing stocks with high insider ownership.

With guidance intact, Saucony set to double revenue, and the shares trading at a sizeable discount to analyst targets, the key question now is whether Xtep represents mispriced value or if the market already anticipates the growth.

Most Popular Narrative: 25.3% Undervalued

With Xtep International Holdings last closing at HK$5.59 versus a narrative fair value near HK$7.48, the story leans firmly toward upside potential.

Xtep's focus on the growing national fitness boom and running sports, including leading marathon participation rates, positions it for sustained revenue growth in the professional and mass-market sports segments.

The rapid growth of Saucony, a high-end brand with a CAGR of over 100% in the past five years, is expected to continue, with anticipated revenue growth of 30-40% in 2025, contributing significantly to overall group earnings and margin enhancement.

Read the complete narrative.

Curious how marathon wins, premium branding, and ambitious growth collide to justify a richer future earnings multiple than the wider luxury space? The full narrative unpacks the aggressive revenue ramp, shifting margins, and valuation leap required to bridge today’s price to that higher fair value.

Result: Fair Value of $7.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, economic uncertainty and rising DTC and e-commerce spending could squeeze margins and test whether today’s growth expectations and valuation re-rating are really sustainable.

Find out about the key risks to this Xtep International Holdings narrative.

Build Your Own Xtep International Holdings Narrative

If you see the story differently or want to weigh the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.

A great starting point for your Xtep International Holdings research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Do not stop with one opportunity when the market is full of compelling themes that could sharpen your portfolio and uncover the next standout performer.

• Capture early-stage momentum by targeting growth stories hiding in plain sight through these 3576 penny stocks with strong financials before the wider market catches on.
• Position your portfolio at the forefront of technological disruption by using these 24 AI penny stocks to seek companies harnessing artificial intelligence for long-term potential.
• Strengthen your income stream and protect purchasing power by focusing on dependable payers via these 14 dividend stocks with yields > 3% that may help you pursue steady distributions over time.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com