Investment Rating - The report initiates coverage on Topsports International (6110) with an "Outperform" rating and a target price of HKD 3.79 per share, based on a FY2026 PE of 12x [5][23] Core Views - FY25Q3 sales showed sequential improvement, with total retail and wholesale sales declining mid-single-digit YoY, compared to a 10-20% low-end decline in FY25Q2 [2][15] - Inventory reduction is progressing smoothly, with inventory expected to return to healthy levels by FY25 end (Feb 2025) [3][22] - Nike FY25Q2 performance slightly exceeded expectations, with revenue of USD 12.35 billion, down 9% YoY (currency neutral), and net profit of USD 1.16 billion, down 26% YoY [4][16] - Nike plans to clear inventory by the first half of next year and focus on professional sports, extending partnerships with NFL, NBA, and PSG [5][17] Financial Performance and Forecast - FY2025-FY2027 net profit attributable to shareholders is forecasted at RMB 1.325/1.800/2.152 billion, with FY2026 EPS of RMB 0.29 [5][23] - FY25H1 inventory was RMB 6.12 billion, up 6.4% YoY, with inventory turnover days at 148 days, up 7 days YoY [3][22] - FY25H1 gross profit margin was 41.1%, down 3.6% YoY, due to deeper discounts to optimize inventory [3][22] Industry and Market Context - Nike's CEO emphasized strengthening ties with core partners like Topsports International and Pou Sheng International, and repositioning NIKE DIGITAL to focus on full-price models [4][16] - Nike plans to accelerate inventory clearance in H2 (Dec 2024-May 2025) and focus on professional sports, launching new products like Vomero 18 and Pegasus Premium [5][17] Valuation and Peer Comparison - The report values Topsports International at a FY2026 PE of 12x, translating to a target price of HKD 3.79 per share [5][23] - Comparable companies include JD Sports Fashion, Fraser, and Pou Sheng International, with median PE ratios of 9.1x, 10.3x, and 9.2x for 2024E, 2025E, and 2026E respectively [8]

Company Performance and Strategy - The company's Q3 2024 performance met expectations, with retail sales slightly outperforming wholesale, though total sales declined by mid-single digits year-over-year [1] - The company continued to close inefficient and loss-making stores, reducing total store count by high single digits YoY and gross sales area by 4.4% YoY as of November 2024 [1] - Average store size increased YoY, aligning with the company's goal to enhance store image and efficiency [1] - The company aims to maintain stable store numbers in the next year, with net store closures in H2 2024 expected to be no less than in H1 2024 [1] Investment Ratings and Targets - The report assigns a **Neutral** rating to the company [8] - The target price is set at HKD 3.06, representing a potential upside of 4.7% from the current price of HKD 2.92 [16] - The valuation is based on 11x FY2025-26 P/E, reflecting near-term operational pressures but long-term growth potential in the sports sector [17] Financial Performance and Projections - Revenue for FY2024 is projected at RMB 28.93 billion, a 6.9% YoY increase, but FY2025 revenue is expected to decline by 8.1% to RMB 26.58 billion [19] - Net profit for FY2024 is forecasted at RMB 2.21 billion, up 20.4% YoY, but FY2025 net profit is expected to drop by 33.4% to RMB 1.47 billion [19] - Gross margin remains stable at around 41.7%-42.1% from FY2023 to FY2027, while EBIT margin is projected to decline to 7.1% in FY2025 before recovering to 8.0% in FY2027 [21] - ROE is expected to decrease from 22.5% in FY2024 to 15.7% in FY2025, reflecting operational challenges [21] Operational Highlights - Retail performance in Q3 2024 followed the trend of H1 2024, with professional sports brands showing faster growth while mass leisure brands remained weak [17] - Online channels contributed double-digit growth in Q3 2024, driven by promotional events, offsetting pressure from offline channels due to reduced foot traffic [17] - Inventory management remains a key focus, with 70-80% of inventory being new products as of November 2024, aligning with the company's de-stocking targets [17] Industry and Market Context - The sports sector is seen as having significant growth potential, despite near-term challenges in offline channels [17] - The company's partnership with Nike is highlighted as a key strength, with Nike's new CEO emphasizing efficient retail collaboration and professional sports categories like outdoor and running [17]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 3.7, based on a 15x PE multiple for FY25/02 [3][4] Core Views - The company's retail and wholesale sales for FY25Q3 (Sep-Nov) declined by mid-single digits YoY, in line with expectations, but showed sequential improvement compared to FY25Q2 [3] - Online sales outperformed offline, with double-digit growth in online GMV, driven by promotional activities during the period [4] - The company continues to optimize its store structure, with a 4.4% YoY decline in gross sales area and a high-single-digit decline in store count, indicating improved store efficiency [4] - Inventory levels remain healthy, with a stock-to-sales ratio of 4-5 months and new products accounting for 70-80% of inventory [4] - Adidas performed strongly, with high-single-digit revenue growth in Greater China, while Nike is in a transition phase but expected to improve under new leadership [4] Financial Performance - Revenue for FY25/02E is projected at RMB 26,443 million, a decline of 8.6% YoY, with a recovery expected in FY26/02E and FY27/02E [4] - Net profit for FY25/02E is forecasted at RMB 1,339 million, a decline of 39.5% YoY, with a rebound expected in subsequent years [4] - Gross margin is expected to remain stable at around 40% in the coming years, with net margin improving from 5.1% in FY25/02E to 6.9% in FY27/02E [4] - EPS is projected to grow from RMB 0.22 in FY25/02E to RMB 0.33 in FY27/02E [4] Operational Highlights - The company's online direct sales accounted for 40% of total direct sales, reflecting a shift towards digital channels [4] - Inventory turnover days improved to 130 days, indicating better inventory management [12] - The company maintains a high dividend payout ratio, with a dividend yield of 7.85% in FY25/02E, expected to rise to 12.14% in FY27/02E [4] Market Position - The company is the largest retail partner of Nike in China and has a strong partnership with Adidas, which is expected to benefit from Nike's recovery under new leadership [4] - The company is also expanding collaborations with domestic sports brands and other international brands, diversifying its brand portfolio [4]

Investment Rating - Buy (Maintained) [8] Core Views - The company's Q3 sales decline narrowed slightly compared to the first half of the fiscal year, with a mid-single-digit drop in total retail and wholesale sales for FY2025Q3 (9/1/2024-11/30/2024) [3] - E-commerce performance is expected to be better than offline, and direct sales are expected to outperform franchised sales [3] - The company continues to prioritize inventory health, aiming for optimization by year-end [3] - Direct sales channels are undergoing optimization, with a 4.4% YoY and 2.1% QoQ decrease in gross sales area for direct stores in Q3 2024 [4] - The company's brand partnership matrix remains strong, with Nike and Adidas being key partners, and new collaborations in outdoor, trail running, and IP culture sectors [5] - FY25/26/27 revenue is forecasted at -7%/+5%/+5% to 26.8/28.2/29.7 billion yuan, with net profit attributable to the parent company at -39%/+21%/+13% to 1.36/1.64/1.85 billion yuan [6] Financial Forecasts - FY2025E revenue: 26.8 billion yuan (-7.34% YoY), FY2026E: 28.2 billion yuan (+5.36% YoY), FY2027E: 29.7 billion yuan (+5.04% YoY) [6] - FY2025E net profit attributable to the parent company: 1.36 billion yuan (-38.61% YoY), FY2026E: 1.64 billion yuan (+21.05% YoY), FY2027E: 1.85 billion yuan (+12.62% YoY) [6] - FY2025E EPS: 0.22 yuan, FY2026E: 0.27 yuan, FY2027E: 0.30 yuan [6] - FY2025E P/E: 12.33X, FY2026E: 10.19X, FY2027E: 9.05X [6] Operational Highlights - Direct sales channels reduced by 331 stores in the first half of the fiscal year, with total sales area down 1.9% YoY but single-store sales area up 4.8% [4] - The company is focusing on opening larger stores and closing smaller ones to enhance the offline shopping experience [4] - Nike's new management team is expected to bring positive changes, reflecting the brand's emphasis on the Chinese and outdoor markets [5] - The company has expanded its brand portfolio with new partnerships in outdoor, trail running, and IP culture sectors, including HOKA ONE ONE, Kailas, Fanatics, and Norda [5] Valuation and Dividends - The company has maintained a cash dividend payout ratio of around 100% over the past three years [6] - The strong brand partnership matrix, healthy cash flow, and high dividend yield support the "Buy" rating [6]

Investment Rating - The report maintains an "Accumulate" rating for the company, with a target price of 2.83 HKD [1]. Core Viewpoints - The company is expected to benefit from consumer stimulus policies, focusing on non-essential consumption [1]. - The company has faced challenges with offline traffic decline but is expanding its online platforms and utilizing new customer acquisition methods [1]. - The report highlights the importance of deepening user engagement through personalized marketing strategies, which have resulted in a stable contribution of 60-70% from repeat members [1]. - The company is diversifying its product offerings and expanding brand partnerships to capture growth in emerging sports segments [1]. - The earnings forecast for FY25-27 is maintained, with projected revenues of 26.5 billion RMB, 28.5 billion RMB, and 29.9 billion RMB, and net profits of 1.39 billion RMB, 1.67 billion RMB, and 1.92 billion RMB respectively [1]. Summary by Relevant Sections Investment Rating - The company is rated "Accumulate" with a current price of 2.83 HKD and a target price set [1]. Business Performance - The company reported a decline in retail and wholesale sales, with a 2.1% decrease in gross sales area and a 4.4% year-on-year decline [1]. - New customer acquisition strategies include the use of mini-programs and partnerships with platforms like Douyin and Meituan [1]. User Engagement - The company is enhancing user experience through tailored product recommendations and marketing strategies, leading to increased user loyalty [1]. - High-value members contribute nearly 40% of total sales despite being a small percentage of total members [1]. Product Diversification - The company is expanding its brand collaboration matrix and entering new sports categories, including partnerships with HOKA ONE ONE and KAILAS [1]. - The company is also collaborating with Fanatics to expand the commercialization of sports IP in Greater China [1]. Financial Forecast - The report maintains the earnings forecast with projected revenues and net profits for FY25-27, along with EPS estimates of 0.22 RMB, 0.26 RMB, and 0.30 RMB respectively [1].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its performance relative to the market [5][9]. Core Insights - The company reported its FY25 Q3 operational data, which met expectations, showing a slight year-on-year decline in sales but a significant improvement compared to the previous quarter [5][6]. - Online sales outperformed offline sales during the quarter, with a notable double-digit growth during the Double Eleven shopping festival, leading to an increase in the proportion of online direct sales to 40% [6][9]. - The inventory level remains stable, with a healthy structure, although discount rates have deepened temporarily due to ongoing inventory clearance [7][9]. - The new CEO of NIKE is expected to drive a new product innovation cycle, which could positively impact the company's retail business [8][9]. - The company focuses on high-quality growth in the sports apparel retail sector, leveraging strong partnerships with major brands like NIKE and Adidas [9]. Summary by Sections Market Data - Closing price (HKD): 2.83 - Market capitalization (billion HKD): 175.49 - 52-week high/low (HKD): 6.28/2.11 [3] Financial Performance - FY25 Q3 sales showed a year-on-year decline in the single digits, but improved from a 10-20% decline in the previous quarter [5][6]. - The company expects net profits for FY25-FY27 to be 13.2 billion, 16.7 billion, and 19.3 billion RMB, respectively, with corresponding P/E ratios of 12, 10, and 8 [9][11]. Sales and Inventory - The company’s direct sales area decreased by 4.4% year-on-year, with a high single-digit decline in the number of stores, reflecting an optimization of store structure [6][9]. - The inventory turnover ratio is maintained between 4-5 months, with 70-80% of inventory being new products [7][9]. Future Outlook - The company is expected to benefit from improvements in the retail environment and brand recovery, maintaining a positive long-term growth trend [9].

Investment Rating - Buy (Maintained) [2] Core Views - The report maintains a "Buy" rating for 滔搏 (06110 HK) due to expected performance recovery post inventory improvement and organizational adjustments [5] - FY2025Q3 saw a mid-single-digit decline in year-over-year (YoY) sales, with retail performing slightly better than wholesale and online outperforming offline [5] - The company is expected to achieve net profits of 1 33 billion 1 53 billion and 1 81 billion for FY2024-2026 respectively with current P/E ratios of 12 2x 10 6x and 9 0x [5] - Sales performance improved in December compared to Q3 with expectations of further improvement in main brand channels and product performance [5] Financial Performance - FY2025Q3 saw a slight improvement in offline foot traffic decline compared to H1 with online sales accounting for 40% of total sales up from 30% in FY2025H1 [5] - Discounts deepened in FY2025Q3 with offline discounts increasing while online discounts improved partially offsetting the negative impact of higher online sales proportion [5] - Inventory-to-sales ratio is expected to improve by the end of FY2025 with current ratios at 4-5 months slightly up due to seasonal and stocking differences [5] Operational Strategy - The company is accelerating the淘汰 of underperforming offline stores while increasing the average store size and implementing integrated management across all channels [6] - Online the company is expanding its presence on platform e-commerce and building a content e-commerce advantage through a matrix-style live streaming system [6] - The company is坚持全域货品管理 including broadening inventory circulation and implementing precise price management across different channels to improve overall retail efficiency [6] Financial Summary and Valuation - Revenue for FY2023A FY2024A FY2025E FY2026E and FY2027E is projected at 27 073 million 28 933 million 26 710 million 28 309 million and 30 448 million respectively [6] - Net profit for the same periods is projected at 1 837 million 2 213 million 1 327 million 1 532 million and 1 810 million respectively [6] - Gross margin is expected to be 41 7% 41 8% 38 6% 40 2% and 40 7% for the respective fiscal years [6] - Net margin is projected at 6 8% 7 6% 5 0% 5 4% and 5 9% respectively [6] - ROE is expected to be 18 7% 22 5% 13 5% 15 6% and 18 4% for the respective fiscal years [6] - EPS (diluted) is projected at 0 3 0 4 0 2 0 2 and 0 3 respectively [6] - P/E ratios are expected to be 8 8x 7 3x 12 2x 10 6x and 9 0x respectively [6] - P/B ratios are projected at 1 7x 1 6x 1 6x 1 6x and 1 6x respectively [6]

Investment Rating - The report maintains an "Outperform" rating for the company [1][3][27] Core Views - The company's Q3 FY2025 sales declined by mid-single digits year-over-year, but the decline narrowed compared to the previous quarter [3][5] - Online channel performance was better than offline, with online sales expected to grow by double digits in Q3, accounting for 40% of total sales [4][5] - The company aims to achieve inventory improvement by the end of the fiscal year, with deeper discounts expected in Q3 due to inventory clearance efforts [4][6] - The company's strong cash generation capability supports a high dividend payout, with a mid-term dividend payout ratio of 99% and an expected full-year payout ratio of 100% [4][26] - The company's main brand, Adidas, performed well in Greater China, with high single-digit revenue growth in the first three quarters, and the company raised its full-year revenue growth guidance to 10% [4][26] - Nike, another key brand, is in a transition phase, with potential recovery expected in FY2026 under new leadership and product innovation [4][26] - Non-core brands in the outdoor sector remain highly competitive [26] Financial Performance and Forecast - The company's Q3 FY2025 total sales declined by mid-single digits year-over-year, with a 2.1% quarter-over-quarter and 4.4% year-over-year reduction in gross sales area of directly operated stores [3][5] - The company expects to achieve inventory improvement by the end of the fiscal year, with deeper discounts in Q3 [6] - The report maintains profit forecasts, with expected net profits of 1.44 billion, 1.79 billion, and 1.92 billion yuan for FY2025, FY2026, and FY2027, respectively, representing year-over-year changes of -35.1%, +24.5%, and +7.6% [27] - The reasonable valuation range is 3.8-4.0 HKD, corresponding to a 2025 PE ratio of 15-16x [27] Brand Performance - Adidas: In Q3 FY2024, Adidas reported a 10% year-over-year revenue growth at constant exchange rates, with a 9% growth in Greater China excluding Yeezy. The company raised its full-year revenue growth guidance to 10% [16][26] - Nike: In Q1 FY2025, Nike's revenue declined by 10% year-over-year, with a 16% decline in direct sales in Greater China. The company withdrew its full-year guidance due to CEO transition but expects better performance in the second half of FY2025 [13][26] Market and Industry Outlook - The company's sales decline and store closures are primarily due to weak macroeconomic demand and reduced offline foot traffic [4][26] - The company expects channel adjustments to stabilize in the next fiscal year, with potential growth driven by inventory health and market environment improvements [4][26] - The outdoor sector remains highly competitive, with non-core brands maintaining strong performance [26]

Core Viewpoint - CICC maintains a "outperform" rating for Tmall (06110) with a target price of HKD 3.1 [1] Sales Performance - In the third quarter, sales amount decreased by single digits year-on-year, while direct store gross sales area also reduced [1] - Online sales, however, continued to grow at a double-digit rate [1] Inventory Management - Inventory control is in line with expectations [1] Brand Adjustments - The main brand Nike is undergoing adjustments, which is expected to bring growth elasticity in the future [1]

Investment Rating - The report maintains a "Buy" rating for the company [4][7]. Core Views - The company experienced a mid-single-digit decline in overall sales for FY2025Q3, with a notable improvement compared to FY2025Q2. The decline in sales is attributed to fluctuations in foot traffic and a challenging consumption environment [2][3]. - The company's e-commerce segment is expected to continue its rapid growth, potentially achieving double-digit growth rates, driven by promotional activities and an expanded platform strategy [3][4]. - The main brands, Nike and Adidas, are showing different growth trajectories, with Adidas maintaining steady growth while Nike is undergoing structural adjustments under new leadership. The long-term growth potential for Nike remains positive, benefiting the company as a key retailer in the Greater China region [4]. Financial Summary - For FY2025, the company is projected to see a high single-digit decline in revenue and a nearly 40% drop in net profit attributable to shareholders. This is influenced by macroeconomic improvements and promotional activities [3][6]. - The financial metrics indicate a revenue forecast of 26,523 million for FY2025, with a net profit of 1,338 million, reflecting a year-over-year decline of 39.6% [6][12]. - The company’s earnings per share (EPS) is expected to be 0.22 for FY2025, with a price-to-earnings (P/E) ratio of 11.6 [6][14]. Operational Insights - The company is focusing on inventory reduction and optimizing its store structure, which includes closing underperforming stores. As of the end of September, the total sales area decreased by 2.1% from August and 4.4% year-over-year [2][4]. - The report highlights the importance of digital transformation and effective membership operations in enhancing retail efficiency and customer loyalty [4]. Market Position - The company is positioned as a leading player in the sports footwear and apparel retail sector, with ongoing efforts to improve store operations and digital capabilities [4][6].