Chinese sports brand Xtep climbs, Daiwa upgrades on new acquisitions

Xtep International Holdings

05/06/2019 03:33

** Shares of China's homegrown sports brand maker Xtep
International Holdings Ltd  1368.HK  rise as much as 6% to
HK$4.08, the highest since May 30
    ** Daiwa upgrades Xtep to "buy" from "hold", saying it has
better long-term outlook with new business prospects on
acquisitions including K-Swiss and Palladium, and JV with
Wolverine Worldwide for Merrell and Saucony in China to pursue a
multi-brand strategy
    ** Daiwa raises Xtep's target price to HK$5.80 from HK$5.50,
adding that the firm is moving in right direction, with core
brand business on track to deliver robust sales growth after
3-year transformation
    ** As of Tuesday's close, the stock has fallen 9.4% so far
this year
    ** Xtep has underperformed the Hang Seng Commerce & Industry
Index sector  .HSNC  by 12.9 percentage points in the past one
month
    ** The Hong Kong Hang Seng sub-index tracking consumer goods
companies  .HSCICG  gains 0.4%
    ** The Hang Seng China enterprises index  .HSCE  climbs
0.6%, and the benchmark index  .HSI  rises 0.9%

 (Reuters Messaging: donny.kwok.thomsonreuters.com@reuters.net)