Guosen Securities Co.,Ltd. released a research report expressing optimism that XTEP INT'L (01368) will achieve steady growth by focusing its core brand on the mass market, while Saucony and Merrell, targeting "dual elite groups" and the outdoor segment respectively, will maintain a rapid growth pace and see continuous profit improvement over the next 3-5 years. The firm maintained its profit forecasts, projecting net profits of 1.40/1.49/1.60 billion yuan for 2025-2027, representing year-on-year growth of 13.2%/5.9%/7.7%. It upheld a reasonable valuation range of HK$6.1-6.6, corresponding to a 2026 price-to-earnings ratio of 11-12x, and reaffirmed an "Outperform" rating. The key points from Guosen Securities' analysis are as follows: The company announced its operational update for the fourth quarter and full year of 2025 on January 23. In Q4, the omnichannel retail sales value (including online and offline) for the core XTEP brand was flat year-on-year, with retail discounts at 70-75% of the original price; the omnichannel retail sales value for the Saucony brand increased by over 30% year-on-year. For the full year 2025, the omnichannel retail sales value for the core XTEP brand grew by a low-single-digit percentage year-on-year, with a channel inventory-to-sales ratio of approximately 4.5 months at year-end; the omnichannel retail sales value for the Saucony brand increased by over 30% year-on-year. Guosen Securities' apparel and footwear team views that in Q4, the core XTEP brand's sales value was flat year-on-year, with the running category performing strongly, discounts remaining stable, and inventory seeing a slight increase; Saucony's sales value grew 30%, while Merrell's achieved double-digit growth. Investment recommendation: The firm is optimistic about the core brand leveraging its strengths in the running category for steady sales growth and expects rapid growth and profit enhancement from the professional sports brands. The company's focus on the running domain and utilization of its professional expertise in running categories allowed the core brand to maintain flat sales year-on-year in Q4 despite negative impacts from temperatures and the delayed Spring Festival, with the running shoe category and core series like "Two Thousand Kilometers" and "Champion Family" performing exceptionally well; the professional sports brand Saucony accelerated to over 30% growth quarter-on-quarter, achieving the full-year 30% growth target previously guided by management. Risk warnings include a slower-than-expected recovery in consumer demand; potential damage to brand image; intensification of恶性 competition among brands; and systemic market risks.