Shares in China sportswear supplier Xtep ended the week at a new record high today after the company announced investment hook-ups with China private equity firm Hillhouse Capital Management, one of China’s largest private equity firms.
Xtep’s Hong Kong-traded shares rose 5.6% to HK$13.16 today; they’ve more than doubled since mid-May.
Xtep said it would raise HK$500 million from the sale to Hillhouse of bonds that can be converted into its own underlying shares. In addition, subsidiary Xtep Global raised $65 million from Hillhouse from the sale of bonds that can be converted into that unit’s shares. (See announcements here and here.) Funds will help boost sales of Xtep-owned brands.
The doubling of Xtep’s stock price has lifted the fortune of company’s controlling Ding family to $2.3 billion. Trusts held by chairman Ding Shui Bo, executive director Ding Mei Qing (his sister) and executive director Ding Ming Zhong (his brother) collectively own 1.3 billion shares that were worth $2.2 billion today. Xtep’s annual report doesn’t give a clear down of the ownership split among them. Shui Bo has another 60.7 million shares worth another $103 million.
Spending on sportswear in China has picked up amid a continuing economic recovery from the Covid-19 pandemic. Xtep, whose rivals include Anta and Nike, said in April first-quarter sales had a mid-50% increase compared with a year earlier. Nike has faced backlash in China after a statement in March expressed concern about alleged forced labor practices its Xinjiang region.
Hillhouse is led by billionaire Zhang Lei, who is worth $3 billion today on the Forbes Real-Time Billionaires List.
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I’m a senior editor and the Shanghai bureau chief of Forbes magazine. Now in my 20th year at Forbes, I compile the Forbes China Rich List. I was previously a correspondent for Bloomberg News in Taipei and Shanghai and for the Asian Wall Street Journal in Taipei. I’m a Massachusetts native, fluent Mandarin speaker, and hold degrees from the University of Vermont and the University of Wisconsin at Madison.
Xtep International Holdings Limited (SEHK stock code: 1368) is a Chinese manufacturing company of sports equipment based in Kowloon Bay, Hong Kong. Established in 2001, the company was listed on the Main Board of the Hong Kong Stock Exchange on 3 June 2008.
Xtep engages mainly in the design, development, manufacturing, sales, marketing and brand management of sports equipment, including footwear, apparel, and accessories. Xtep is a leading professional sports brand with an extensive distribution network of over 6,300 stores covering 31 provinces, autonomous regions and municipalities across the PRC and overseas.
In 2019, Xtep has further diversified its brand portfolio which now includes four internationally brands, namely K-Swiss, Palladium, Saucony and Merrell. Xtep is a constituent of the MSCI China Small Cap Index, Hang Seng Composite Index Series and Shenzhen-Hong Kong Stock Connect.
In August 2019, Xtep signed on famous Asian basketball player Jeremy Lin as spokesperson, marking its foray into the basketball business realm. Xtep also unveiled its “Basketball Product Co-Creation Plan” to come up with basketball products via product co-creation.
After previously supplying then-Premier League side Birmingham City and La Liga side Villarreal in 2010 and 2014 respectively, Xtep left the major football scene in 2017 and focused on other sports, mainly in running. In mid-2018, Xtep returned again to the football scene by signing a contract with Saudi Professional League side Al-Shabab ahead of the 2018–19 season in a reported three-year contract. On 13 October 2019, Egyptian Premier League side Al Ittihad Alexandria announced Xtep as their new official kit supplier until 2022, replacing German company Uhlsport.
- Product portfolio on Xtep website
- Contact address on Xtop website
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- Xtep 2019 Interim Report [2019-08-21]
- XTEP INT’L Forms JV to Run Merrell, Saucony Brands – AASTOCKS [2019-03-04]
- Xtep buys E-Land Footwear to develop series – The Standard [2019-05-03]
- Xtep expands its sportswear portfolio into basketball shoes and apparel, signing on star Jeremy Lin as brand spokesman – South China Morning Post [2019-08-09]