Core Viewpoint - The report from Guosheng Securities indicates that Taobo (06110), a leading domestic sports footwear and apparel retailer, has advanced digital capabilities and improved operational efficiency. However, short-term impacts from the consumer environment and foot traffic fluctuations have affected terminal sales. The firm forecasts net profits attributable to the parent company for FY2026-FY2028 to be 1.301 billion, 1.483 billion, and 1.648 billion yuan respectively, with a current price corresponding to a FY2026 PE of 15 times, maintaining a "Buy" rating [1]. Financial Performance - For FY2026H1, the company's revenue decreased by 5.8% year-on-year to 12.3 billion yuan, with a slight decline in gross margin by 0.1 percentage points to 41%. The deepening retail discounts negatively impacted gross margin, while the increase in retail business proportion and support from brand partners provided positive contributions. The net profit attributable to the parent company fell by 9.7% year-on-year to 790 million yuan, with a net profit margin decrease of 0.3 percentage points to 6.4%, maintaining relative stability in profit margins. The board has declared an interim dividend of 0.13 yuan per share, with a payout ratio of 102.2%, emphasizing shareholder returns [1]. Brand Performance - The main brand Nike's performance is expected to improve, while the company continues to expand brand partnerships for long-term stable growth. In FY2026H1, revenue from the main brand and other brands decreased by 4.8% and 12.2% to 10.8 billion and 1.4 billion yuan respectively. Adidas is expected to perform relatively well in the Greater China region, with a reported revenue growth of 7.8% for H1 2025 (currency neutral), while Nike's revenue in the same region declined by 10% for FY2026Q1 (currency neutral). The company is also focusing on deepening its brand layout in running and outdoor segments, collaborating with brands like Norda, Soar, Ciele, and Norr na to meet differentiated consumer demands [1]. Business Model Analysis - Retail business outperformed wholesale business, with e-commerce performing better than offline sales. In FY2026H1, retail revenue decreased by 3% to 10.6 billion yuan, with offline stores undergoing optimization and same-store traffic declining by double digits. Conversely, online retail sales grew by double digits. Wholesale revenue fell by 20.3% to 1.6 billion yuan, primarily due to reduced orders from offline channels caused by foot traffic fluctuations. The company closed 332 offline stores, optimizing its channel structure, resulting in a total of 4,688 stores as of the end of August 2025, with total sales area down by 14.1% but same-store sales area up by 6.5% [2]. E-commerce Growth - The company's e-commerce platform sales grew rapidly, demonstrating excellent omnichannel e-commerce operational capabilities. In FY2026H1, retail online sales, including both public and private domains, achieved double-digit growth. The company continues to strengthen its e-commerce system, leveraging offline stores to extend online boundaries and building channels such as Douyin live streaming, Xiaohongshu, WeChat mini-programs, and instant retail. Additionally, the company is enhancing its refined operational capabilities in platform e-commerce and content e-commerce [2]. Consumer Focus - The company is consumer-centric, focusing on user operations. As of the end of August 2025, the total number of members reached 89.1 million, with a continuous expansion of the membership base. During the same period, the retail total from offline stores and WeChat mini-programs contributed 92.9% of total sales, with repeat member sales accounting for 60% of overall sales, maintaining a high and stable sales contribution [3]. Inventory and Cash Flow - The inventory situation is stable, with a cash flow return that is excellent. As of the end of August 2025, the company's inventory amounted to 5.83 billion yuan, down by 4.7% year-on-year, with inventory turnover days at 150 days, an increase of 1.7 days year-on-year. The company has effectively controlled its total inventory. The net cash flow generated from operating activities during the period was 1.35 billion yuan, 1.7 times the net profit attributable to the parent company, indicating a healthy cash return capability in an uncertain market environment [4]. Future Outlook - For FY2026, the firm expects a slight decline in revenue, with net profit attributable to the parent company remaining roughly stable year-on-year. The company anticipates continued fluctuations in offline foot traffic, while online growth is expected to accelerate. Overall, considering the fluctuations in the consumer environment, the company forecasts a slight decline in revenue for FY2026, with net profit remaining stable year-on-year [5][6].

Core Viewpoint - 中金 maintains a "outperform" rating for 滔搏 (06110) with an adjusted target price of HKD 4.17, reflecting a 23% increase and corresponding to 18/15 times FY26/27 earnings multiples, indicating a 20% upside potential [1] Financial Performance - For 1HFY26 (March-August 2025), the company reported a revenue decline of 6% year-on-year to RMB 12.3 billion and a net profit drop of 10% to RMB 800 million, aligning with expectations [1] - The company declared an interim dividend of RMB 0.13 per share, resulting in a payout ratio of approximately 102% [1] Revenue Breakdown - Revenue from direct sales and wholesale decreased by 3% and 20% respectively in 1HFY26 [2] - The main brands, Nike and Adidas, saw a revenue decline of 5%, accounting for 88% of total revenue, while other brands experienced a 12% drop [1][2] Operational Efficiency - The company operated 4,688 direct stores, a reduction of 332 stores since the beginning of the fiscal year, with same-store sales area increasing by 6.5% year-on-year [2] - The company is focusing on optimizing retail stores and has introduced innovative retail formats, such as the running specialty store, ektos, in Shanghai [2] Profitability and Cost Control - The gross margin slightly decreased by 0.1 percentage points to 41% due to a higher proportion of promotional online sales and increased retail share [3] - The overall expense ratio only increased by 0.1 percentage points to 33.2%, despite the revenue decline [3] - The net profit margin decreased by 0.3 percentage points to 6.4% with a net profit decline of 9.8% [3] Inventory and Cash Flow Management - The company effectively managed inventory, with a 4.7% decrease in inventory levels by the end of August [4] - Operating cash flow for 1HFY25 was RMB 1.35 billion, with a net cash ratio of approximately 1.7, supporting a high dividend payout ratio of 102% [4] Future Outlook - Management indicated that retail performance in September-October aligns with 2QFY26, focusing on profit maintenance and aiming for flat net profit year-on-year for FY26, with an improvement in net profit margin [5]

Core Viewpoint - 中金 maintains a "outperform" rating for 滔搏 (06110) with FY26/27 EPS estimates of 0.21/0.26 HKD, and raises the target price by 23% to 4.17 HKD, indicating a potential upside of 20% based on the adjusted valuation multiples [1] Financial Performance - For 1HFY26 (March-August 2025), the company reported a revenue decline of 6% year-on-year to 12.3 billion HKD and a net profit drop of 10% to 800 million HKD, aligning with expectations [2] - The company declared an interim dividend of 0.13 HKD per share, resulting in a payout ratio of approximately 102% [2] - Revenue was impacted by fluctuations in terminal retail, with the company focusing on optimizing offline channels and expanding online retail operations [2] - Revenue for the main brands Nike and Adidas fell by 5%, accounting for 88% of total revenue, while other brands saw a 12% decline [2] Gross Margin and Cost Control - The gross margin for 1HFY26 slightly decreased by 0.1 percentage points to 41%, attributed to a higher proportion of promotional online sales and increased retail share [3] - The overall expense ratio only increased by 0.1 percentage points to 33.2% due to effective cost management despite revenue decline [3] - The net profit margin for 1HFY26 was 6.4%, down by 0.3 percentage points year-on-year [3] Inventory Management and Cash Flow - The company effectively managed inventory, with a 4.7% year-on-year decrease in inventory levels by the end of August [4] - Operating cash flow for 1HFY25 was 1.35 billion HKD, with a net cash ratio of approximately 1.7, supporting the high dividend payout [4] Future Outlook - Management indicated that terminal retail trends in September-October are consistent with 2QFY26, focusing on profit maintenance for FY26 with guidance for stable net profit and improved net profit margin [5]

Group 1: Macro Insights - The report highlights new goals and strategies from the Fourth Plenary Session, including a focus on enhancing national defense capabilities and international influence by 2035, and the establishment of a "strong aerospace nation" [4] - Key tasks have been prioritized, emphasizing the modernization of the industrial system, opening up to the outside world, and improving people's livelihoods, particularly in promoting high-quality development in real estate [4] - The report suggests that while short-term policies may intensify, the overall approach will lean towards gradual adjustments rather than immediate actions, with a focus on laying groundwork for the upcoming year [4] Group 2: Pharmaceutical Industry - The report on InnoCare Pharma (映恩生物-B) indicates that the company has rapidly advanced its clinical development through a self-built ADC platform, with HER2 ADC expected to file for listing in 2025 [5] - Revenue projections for InnoCare Pharma are set at 1.95 billion, 2.15 billion, and 2.90 billion yuan for 2025-2027, with growth rates of 0.5%, 10.3%, and 35.1% respectively, leading to a target market valuation of approximately 42.67 billion yuan [5] Group 3: Power Sector - The report notes a significant increase in electricity consumption in September, particularly in the secondary industry, which grew by 5.7%, driven by improved water conditions boosting hydropower generation [6] - The report recommends focusing on the thermal power sector, highlighting companies like Huaneng International and Huadian International as potential investment opportunities due to their strong performance and favorable market conditions [6] Group 4: Construction and Decoration - China National Materials (中材国际) has shown steady revenue growth in the first three quarters of 2025, with a strong overseas order intake and an attractive dividend yield [10] - The projected net profits for China National Materials are 3 billion, 3.3 billion, and 3.6 billion yuan for 2025-2027, reflecting growth rates of 1.4%, 10.2%, and 9.2% respectively [10] Group 5: Agriculture and Animal Husbandry - Guibao Pet (乖宝宠物) reported a revenue of 4.737 billion yuan for the first three quarters of 2025, marking a year-on-year increase of 29.03%, while net profit reached 513 million yuan, up 9.05% [11] - The company is focusing on high-end brand strategies, with significant sales growth during the Double Eleven shopping festival, indicating a strong market position in the pet food sector [12] Group 6: Textile and Apparel - Tabo (滔搏) experienced a revenue decline of 5.8% in FY2026H1, but maintained a stable profit margin, with a focus on digital capabilities and operational efficiency [16] - Bosideng (波司登) is expected to achieve stable revenue and healthy profit growth as the winter season approaches, with projected net profits of 3.901 billion, 4.392 billion, and 4.951 billion yuan for FY2026-2028 [18] Group 7: Education Sector - Action Education (行动教育) reported a return to positive growth in Q3, driven by its "effectiveness + AI" strategy, with net profits projected to grow by 11.7%, 10.3%, and 10.3% for 2025-2027 [23] Group 8: Electronics - Shannon Semiconductor (香农芯创) reported a significant revenue increase of 59.9% year-on-year for the first three quarters of 2025, with a strong outlook for Q4 driven by rising demand for enterprise-level SSDs and DRAM products [24][25] - Revenue forecasts for Shannon Semiconductor are set at 38.9 billion, 58 billion, and 79.7 billion yuan for 2025-2027, with corresponding net profits of 605 million, 1.204 billion, and 2.025 billion yuan [26]

Summary of the Conference Call for Top Sports Industry Overview - The conference call discusses the performance and strategies of Top Sports, a leading player in the sports retail industry in China, amidst a challenging market environment. Key Financial Metrics - Total revenue for the first half of 2025 decreased by 5.8% to 12.3 billion RMB - Core sales revenue fell by 4.8% to 10.8 billion RMB - Gross margin slightly decreased by 0.1 percentage points to 41% - Total expense ratio increased by 0.1 percentage points to 33.2% [2][4][5] Operational Efficiency Improvements - The company optimized its aviation channels, online and offline channels, and supply chain in Thailand to enhance operational efficiency - Employee count reduced by 16%, leading to a 5.2% decrease in employee costs - Inventory decreased by 4.7%, but inventory turnover days increased to 150 days - Accounts receivable decreased by 1.5%, with average collection days down to 12.6 days [2][6][7] Digital and Retail Strategy - Top Sports is advancing its digital intelligence strategy, expanding its military channel retail capabilities, and transitioning from a single model to a diversified operational model - As of August 2025, the company operated 4,688 direct stores, with average sales increasing by 6.5% year-on-year [2][10][11] Market Adaptation and Brand Collaboration - The company is focusing on stabilizing its business and expanding its brand collaboration ecosystem to address market challenges - It has engaged in various marketing activities, including collaborations with major brands and sustainability initiatives, such as a second-hand clothing recycling program [3][4][15] Cash Flow and Capital Allocation - Net cash flow from operating activities was 1.35 billion RMB, down 48.2% year-on-year, primarily due to differences in accounts receivable and payable related to the timing of the Spring Festival - Free cash flow was 1.22 billion RMB, providing a solid foundation for dividend payments, although the company decided not to distribute interim dividends to maintain efficient operations [8][9] User Engagement and Digitalization - The company is building a diversified user value system, focusing on military channels and enhancing user engagement through a refined membership system - The popular sports user base has grown to 89 million, with a focus on providing tailored services [13][14] Challenges in Wholesale and Consumer Trends - Wholesale revenue has declined due to a challenging macro environment and reduced confidence among wholesale consumers - Observations indicate a strong growth rate in outdoor running categories, while basketball is under pressure but gradually recovering [28][30] Future Outlook and Strategic Goals - Top Sports aims to maintain a healthy proportion of new products (70% to 80%) and stable discount rates in the fiscal year 2026 - The company is actively pursuing athlete business initiatives and direct communication with runners to enhance brand collaboration [24][29] Conclusion - Top Sports is navigating a complex retail landscape by optimizing operations, enhancing digital capabilities, and focusing on brand collaborations to drive future growth and adapt to changing consumer behaviors [26][27]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [4]. Core Insights - The company reported a revenue of 12.299 billion yuan for H1 FY2026, a decrease of 5.8% year-on-year, with a net profit of 789 million yuan, down 9.7% year-on-year. The interim dividend declared is 0.13 yuan per share, with a payout ratio of approximately 102% [2]. - The consumer environment has impacted sales, but channel optimization and overall growth have mitigated some pressure. The main brands (Nike and Adidas) saw revenue declines of 4.8% and 12.2%, respectively [2]. - The company continues to optimize its store strategy, reducing the number of direct stores to 4,688, a net decrease of 332 stores, while increasing same-store sales area by 6.5% year-on-year [2]. - The user base has grown to 89.1 million, with member sales contributing 92.9% of total sales, and repeat members accounting for about 60% of member consumption [2]. - Online sales have seen double-digit growth, effectively offsetting the decline in offline traffic [2]. Financial Performance - The gross margin for H1 was 41.0%, a slight decrease of 0.1 percentage points, supported by retail business contributions and brand support from Nike and Adidas [3]. - The company has maintained stable sales and management expense ratios, reflecting prudent cost control and flexibility from its omnichannel retail strategy [3]. - Inventory turnover days increased to 150 days, up by 2 days year-on-year, indicating a healthy inventory level [3]. Future Outlook - The company expects stable performance for the full year, with guidance for an increase in net profit margin. Focus will remain on omnichannel retail and operational efficiency improvements [3]. - The recovery of Nike's sales in FY26 Q1 exceeded expectations, suggesting potential for a rebound in the main brand's business [3]. - New brand expansions into running and outdoor segments, including brands like nordaTM and Norrøna, are anticipated to inject new growth momentum [3]. - Earnings per share (EPS) forecasts for FY2026 to FY2028 are projected at 0.21, 0.24, and 0.28 yuan, with price-to-earnings (PE) ratios of 14, 12, and 10 times, respectively [4].

Core Viewpoint - The sports retail operator, Tmall, reported a decline in both revenue and net profit for the first half of the fiscal year 2025/26, indicating challenges in the market [1] Financial Performance - For the six months ending August 31, 2025, the company achieved revenue of approximately 12.3 billion yuan, representing a year-on-year decrease of about 5.8% [1] - The net profit for the same period was approximately 790 million yuan, reflecting a year-on-year decline of about 9.8% [1]

Core Insights - The core viewpoint of the article highlights the performance of Tmall, a leading sports retail operator in China, which reported a revenue of approximately 12.3 billion yuan and a net profit of about 790 million yuan for the six months ending August 31, 2025, driven by policy benefits and market segmentation [2][3]. Group 1: Financial Performance - For the first half of the fiscal year, the company achieved a revenue of approximately 12.3 billion yuan and a net profit of about 790 million yuan, with cash and cash equivalents reaching around 2.54 billion yuan [2]. - The online retail sales experienced a double-digit growth year-on-year, indicating a strong performance in the digital sales channel [2]. Group 2: Retail Strategy and Market Positioning - The company is enhancing its retail strategy by innovating store formats and expanding its store network, positioning stores as brand experience hubs rather than just sales points [2]. - Tmall aims to become a "one-stop sports retail operator," expanding its brand partnerships and operational capabilities, including exclusive operations for brands like Norrna and trend-setting running brands [3]. Group 3: Consumer Engagement and Membership - The company is focusing on community operations, with membership sales accounting for 92.9% of total retail sales, and repeat member sales contributing about 60% of total membership sales [3]. - Tmall has launched a new multi-product running store brand, ektos, which integrates retail, community activities, and cultural promotion for runners, enhancing its influence in the running segment [3]. Group 4: Future Outlook - The company plans to continue focusing on omnichannel retail, user operations, and innovative business models to strengthen its core capabilities and operational efficiency in the sports consumption market [4].

Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company experienced a decline in performance due to fluctuations in demand during the first half of the fiscal year, with revenue and net profit decreasing by 5.8% and 9.7% year-on-year, respectively [5][9] - The company continues to enhance its omnichannel retail capabilities and has optimized its offline store network while expanding its online presence [9] - The company has adjusted its profit forecasts for fiscal years 2026 to 2028, lowering the expected net profit by 5% to 6% [9] Financial Performance Summary - For the first half of fiscal year 2026, the company reported revenue of 12.3 billion RMB, down 5.8% year-on-year, and a net profit of 790 million RMB, down 9.7% year-on-year [5] - The earnings per share (EPS) for the period was 0.13 RMB, with a proposed interim dividend of 0.13 RMB per share, resulting in a payout ratio of 102.2% [5] - The gross margin decreased by 0.1 percentage points to 41.0%, while the operating margin fell by 0.5 percentage points to 8.1% [6][8] Revenue Breakdown - Revenue from the main brands (Nike and Adidas) decreased by 4.8%, while other brand revenues fell by 12.2% [7] - Retail and wholesale revenues declined by 3.0% and 20.3%, respectively, with total store count decreasing by 332 [7] Cash Flow and Inventory Management - The company reported a 48.2% decrease in operating net cash flow to 1.35 billion RMB [8] - Inventory as of August 2025 decreased by 2.8% quarter-on-quarter to 5.83 billion RMB, with inventory turnover days increasing by 2 days year-on-year [8] Future Outlook - The company is focusing on improving operational efficiency and expanding its brand matrix, including collaborations with new running and outdoor brands [9] - The projected EPS for fiscal years 2026 to 2028 is expected to be 0.20, 0.22, and 0.24 RMB, respectively, with corresponding price-to-earnings (P/E) ratios of 15, 14, and 12 [9]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company has shown a decline in revenue and net profit for FY2026H1, with revenue at 12.299 billion and net profit at 0.789 billion, reflecting year-on-year decreases of 5.8% and 9.7% respectively [2] - The company has implemented a strategy to improve inventory management and enhance online sales through a combination of platform e-commerce, content e-commerce, and private domain operations [5][6] - The company has established partnerships with high-end running brands and outdoor brands, which are expected to contribute to revenue growth [6] Summary by Sections Financial Performance - For FY2026H1, the company's revenue, net profit, and operating cash flow were 12.299 billion, 0.789 billion, and 1.355 billion respectively, with year-on-year declines of 5.8%, 9.7%, and 48.2% [2] - The company proposed a cash dividend of 0.13 yuan per share, with a payout ratio of 102% and a dividend yield of 8.52% [2] - The gross profit margin decreased by 0.1 percentage points to 41.0%, while the net profit margin fell by 0.3 percentage points to 6.4% [4] Store and Sales Analysis - The number of stores decreased by 18.3%, while the sales area per store increased by 7.2% [3] - Retail and wholesale revenues were 10.925 billion and 2.035 billion respectively, with year-on-year declines of 3% and 20% [3] - The company has adjusted its retail store structure with a tailored approach for each product [3] Online and Brand Strategy - The company has achieved double-digit growth in online retail sales, leveraging both public and private domains [3] - The company has opened its first running concept store, ektos, in Shanghai, focusing on runner needs to enhance customer loyalty [6] - The company has collaborated with brands like nordaTM and Soar to meet differentiated market demands [6] Future Outlook - The company maintains revenue forecasts of 26.385 billion, 27.918 billion, and 29.449 billion for FY26-28, with net profit forecasts of 1.290 billion, 1.452 billion, and 1.624 billion respectively [6] - The company is expected to benefit from a digital transformation that enhances online sales and optimizes store structures [6]