TOPSPORTS(HK:06110) ZHESHANG SECURITIES·2024-06-30 10:02Investment Rating - The investment rating for the company is "Buy" [7] Core Insights - The company reported a total sales amount for retail and wholesale business in Q1, showing a mid-single-digit decline year-on-year, attributed to foot traffic pressure and a high base from the previous year, with online performance outperforming offline [1] - For the fiscal year ending February 28, 2024, the company achieved a revenue of 28.933 billion, representing a 6.9% increase, with a gross margin of 41.8% and a net profit of 2.213 billion, reflecting a 20.4% increase [2] - The brand collaboration matrix continues to expand, with sales from Nike and Adidas products reaching 24.8 billion, accounting for 86% of total revenue, and the addition of new brands such as HOKA ONE ONE and norda [3] - Inventory turnover improved, with inventory at 6.29 billion and turnover days decreasing by 13 days year-on-year, while operating cash flow was 3.13 billion, equivalent to 140% of net profit attributable to the parent company [4] - Revenue forecasts for FY25, FY26, and FY27 are projected to grow by 5%, 6%, and 6% respectively, with net profit expected to increase by 8%, 8%, and 7% respectively, maintaining a "Buy" rating due to strong brand collaborations and healthy cash flow [5] Summary by Sections Financial Performance - FY2024 revenue is projected at 28.933 billion, with a year-on-year growth of 6.87%, and net profit at 2.213 billion, reflecting a growth of 20.49% [6] - The company expects revenue growth to continue in the following years, with FY2025E at 30.292 billion and FY2026E at 32.175 billion [10] Brand Collaboration - The company has strengthened its brand collaboration, with significant sales contributions from Nike and Adidas, and new partnerships enhancing its market position [3] Cash Flow and Dividends - The company reported a significant cash flow and a high dividend payout ratio, indicating strong financial health and shareholder returns [4]