<Research>CLSA: CN Sports Brands Grow Faster Than Apparel Sector; Top Pick ANTA SPORTS (02020.HK) w/ TP Lifted to $116

The analyst rating for XTEP INT'L (01368.HK) is maintained as a "Buy" by Goldman Sachs despite a cut in the target price from HKD7.1 to HKD6.8. The reasoning behind this rating includes the following points: 1. Core Brand Performance: The retail sales growth of the core brand Xtep met expectations, indicating stability in its primary market segment. 2. Future Growth Projections: The company reiterated its full-year results guidance, projecting positive growth for the Xtep brand and over 30% growth for the Saucony brand, along with a net profit increase of more than 10%. 3. Valuation Consideration: Goldman Sachs considers the forecasted P/E ratio of 9 times for 2026 to be reasonable, suggesting that the stock is undervalued relative to its earnings potential. 4. Market Sentiment: The target price adjustment reflects short-term market sentiment influenced by overall weak industry demand and discount trends, rather than a fundamental deterioration in the company's prospects. Overall, the combination of stable core brand performance, positive growth outlook, and reasonable valuation supports the "Buy" rating despite the challenges in the broader market.