Seeking a profile boost, Boxihe pivots to Hong Kong IPO

The maker of high-performance outdoor clothing is betting on rising demand for its Pelliot apparel range in China’s still relatively untapped market  

Key Takeaways:

• The company’s pre-IPO backers include Tencent and Qiming Venture Partners
• Revenues have jumped but profit growth this year was slowed by increased costs to promote the firm’s clothing brand  

By Bai Xin Rui

A shift in China’s retail climate has spurred an IPO attempt by one of China’s leading makers of waterproof clothing for outdoor pursuits.

Boxihe Outdoor Sports Group Co. Ltd. has joined a queue of companies seeking entry to the Hong Kong Stock Exchange, encouraged by signs of an upturn in China’s retail sales and by an ebullient mood on the equity market.

The IPO candidate sells heavy-duty apparel and equipment to protect outdoor enthusiasts against inclement weather conditions, but will be hoping its listing application gets a warm reception from investors.  

Formerly known as Xianfeng Clothing Co. Ltd., the group was founded in 2006 with a focus on the export trade for overseas apparel labels. But the company gained rapid recognition after launching its Pelliot brand of outerwear in 2012. According to the IPO paperwork, the company ranked among China’s top three suppliers of high-performance outdoor apparel based on 2024 revenue, with a 5.2% market share.

Tencent backing

Boxihe originally planned to list on the Shenzhen market in mainland China, but switched its IPO destination, citing Hong Kong’s status as an international financial hub offering access to global capital and a broadening of the firm’s shareholder base.

The clothing maker already boasts a prestigious roster of backers, led by Tencent (0700.HK) with a 10.7% stake and prominent Chinese venture capital firm Qiming Venture Partners with 5.4%. The controlling shareholders are Chairman Liu Zhen and his spouse Hua Jingling, who collectively own 63.2%.

China’s outdoor apparel sector has kept expanding, despite the Covid pandemic, according to research cited in the prospectus. The data showed the Chinese market grew to 2.03 trillion yuan ($285 billion) in 2024 from 1.7 trillion yuan in 2019, a compound annual growth rate (CAGR) of 3.1%. The functional apparel segment, Boxihe’s core focus, grew at a faster CAGR rate of 10.3% over the same period to 484.3 billion yuan, nearly 24% of the whole market.

The study in the IPO application predicted the market for specialist outerwear would keep growing as outdoor activities gain in popularity and consumers prioritize durable and effective clothing. It projected the market segment would reach 823.1 billion yuan by 2029, implying a CAGR of 10.9% from 2025 to 2029.

China’s per capita expenditure on high-performance outdoor garments remains relatively low, at just 73 yuan in 2024 compared with the equivalent of 440 yuan in the United States and 170 yuan in Japan. This gap indicates the Chinese market for protective outdoor apparel has considerable room to grow, offering opportunities for leading makers such as Boxihe.

Major hardshell player 

The company said it would invest the IPO proceeds in expanding its technical design team, driving innovation in fabric technology, strengthening its online and offline networks and partnering with high-profile sports events.  

Boxihe ranks second in the Chinese market for hardshell jackets and pants, a type of lightweight, waterproof outwear designed to shield against extreme weather. Leveraging a 6.6% share of China’s hardshell market in 2024 and garment prices averaging between 400 yuan and 1,000 yuan, this segment generated gross profits of 581 million yuan in 2024 and 230 million yuan in the first half of 2025, contributing 55% and 40% of the group’s total for those periods.

Boxihe operates a direct-to-consumer business model, as well as selling through e-commerce platforms including Tmall, Douyin and JD.com. Its online stores grew from 37 in 2022 to 62 in the first half of 2025. Revenue generated through flagship stores and sales to e-commerce platforms accounted for 76.5% of the group’s total revenue in 2024 and 70.7% in the first six months of this year.

Beyond its online presence, Boxihe is expanding its offline outlets to connect with consumers and foster brand loyalty. By mid-year, the group operated 163 physical retail stores, mostly located in leading Chinese cities. It has outlined plans to steadily grow the store network, focusing on cities with strong economic fundamentals and high potential for outdoor consumption.

Advertising costs jump

Aggressive online and offline expansion drove revenue rises of 94% in 2024 and 62.3% in the first half of 2025, but the pace of net profit growth slowed sharply, from a year-on-year jump of 86.3% in 2024 to a mere 3.7% rise in the first half of 2025. The slowdown stemmed largely from a sharp increase in sales and distribution costs, which surged from 30.5% of overall expenses in 2023 and 33.2% in 2024 to 41.5% in the first half of 2025, squeezing net profits.

Among mainland sportswear stocks listed in Hong Kong, Anta (2020.HK) enjoys a forward price-to-earnings (P/E) ratio of 15.7 times, while Li Ning (2331.HK) comes in at s multiple of 16 times and Xtep International(1368.HK) at 9.8 times. However, their market capitalizations vary widely, with Anta at HK$220 billion ($23 billion), Li Ning below HK$50 billion and Xtep smaller still at around HK$15 billion.

As China’s second-largest hardshell apparel brand, Boxihe could reasonably be valued at 15 times earnings for its IPO. A multiple below 10 would make it particularly attractive. However, the steep rise in its sales and distribution expenses poses a challenge. If the pressure on profits abates, Boxihe could start to encroach on the dominance of Anta and Li Ning.

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