TOPSPORTS(HK:06110) Zhi Tong Cai Jing·2025-12-24 10:05Core Viewpoint - Huayuan Securities maintains a "Buy" rating for Taobo (06110), highlighting its leading position in the domestic sports apparel distribution industry and its potential for new growth through brand expansion and strong partnerships with international brands [1] Group 1: Financial Performance - For FY25/26 Q3, the total retail amount (including retail and wholesale) decreased by a high single-digit percentage year-on-year, which aligns with expectations [2] - As of November 30, 2025, the gross sales area of direct-operated stores declined by 13.4% year-on-year and 1.3% quarter-on-quarter, with a slower pace of store closures anticipated for FY26 compared to FY25 [2] Group 2: Brand Partnerships and Market Strategy - Nike's Q2 FY26 revenue increased by 1% year-on-year (excluding currency fluctuations), exceeding market expectations, while the Greater China region experienced a 16% decline in revenue [3] - Nike plans to collaborate closely with distributors like Taobo to address challenges in the Greater China market through inventory management, targeted consumer selection, enhanced brand storytelling, and improved visual merchandising [3] - The company is deepening its collaboration with leading international brands such as Nike and Adidas, with new initiatives expected to drive performance growth [4] Group 3: New Brand Development - The opening of exclusive Adidas stores and the appointment of a new Nike CEO are expected to enhance brand support for third-party distributors, benefiting the company's future growth [4] - Recent introductions of new brands like Soar and Norr?na are anticipated to diversify the company's offerings and expand its customer base, creating new growth opportunities [4] Group 4: Profit Forecast - The company forecasts net profits for FY2026, FY2027, and FY2028 to be 1.287 billion, 1.479 billion, and 1.684 billion yuan respectively, reflecting year-on-year growth of 0.09%, 14.91%, and 13.88% [5]