File photo: a Xstep store in Jiangsu Photo: cnsphoto

Chinese private equity firm Hillhouse Capital Group is investing HK$1 billion ($129.4 million) to boost the Chinese sportswear maker Xstep International by issuing two tranches of convertible bonds, leading shares of Xstep surged by 30.4 percent to an intraday high of HK $11.58 ($1.49) on Tuesday. 

The stock of the sportswear grew 0.37 percent on Wednesday at the Hong Kong exchange. 

TF Securities said after the Xinjiang cotton wave, public recognition of Chinese brands has improved. Credit Suisse also pointed out sales of Chinese mainland-born sportswear brands surpassed other international big brands in May and June. 

Xstep International announced on Tuesday that Hillhouse Group has established a strategic partnership with Xstep Global, which has the operating rights and ownership of "K-Swiss" and "Palladium", which will invest $65 million to jointly develop the global business of the two brands. 

As a significant part of Xstep's multi-brand and global business, Xstep Global has been making frequent moves in recent years, which has acquired several shoe brands, domestic news site 36kr reported on Wednesday. 

After acquiring four major shoe brands - Saucony, Merrell, K-swiss and Palladium, Xstep's multi-brand strategy has been gradually clarified and divided into two new routes, which are professional sports route represented by Saucony and Merrell, and fashion sports route represented by K-swiss and Palladium, together with Xstep's major brand of popular sports route in order to extend in different directions, 36kr said. 

The revenue of Xstep's fashion sports businesses and professional sport businesses increased by 114.5 percent and 608.6 percent respectively in 2020 year-on-year, sending its total revenue to 1 billion yuan ($156.29 million), the report said. 

E-commerce business has also contributed to Xstep's growth in 2020, accounting for a quarter of Xstep's revenue last year. During the Double Eleven online shopping festival in 2020, Xstep's online sales exceeded 520 million yuan, a year-on-year increase of about 50 percent. Moreover, the online retail sales K-swiss and Palladium in the America, Europe, the Middle East and Africa also achieved a year-on-year growth of 45 percent and 52 percent respectively in 2020.

Global Times