Goldman Sachs: 2Q26 Sell-Through Pressure Creates Guidance Risk, but Discount Discipline Maintained; Buy
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Key Views
Despite weaker sell-through, management maintained discount discipline, keeping main-brand retail discounts broadly stable at 25%–30%. Channel inventory rose to 4.5–5 months from 4.0–4.5 months in 2Q25, posing potential pressure if brand upgrades underperform. Running category flagship products and the 2,000KM series grew double digits, while DTC conversion and overseas expansion progressed on track. 3Q26 trends show no meaningful improvement, creating execution risk around full-year guidance.
Outlook
The company reiterated 2026 guidance: mid-single-digit group revenue growth and a high-single-digit net profit margin. Goldman Sachs projects group revenue of RMB 14.434 billion (2026), rising to RMB 15.513 billion (2027) and RMB 16.006 billion (2028). Key downside risks include weaker consumption, inventory management challenges, and intensifying competition.
Recommended Securities
Xtep International (1368.HK): Buy rating maintained. The 12-month target price was revised from HKD 5.70 to HKD 5.60, implying 51.8% upside versus the reported share price of HKD 3.69.
Key exhibits
Exhibit 1
Exhibit 2
