TOPSPORTS(06110) Guotai Junan Securities·2024-08-17 12:07Investment Rating - The report assigns a rating of "Accumulate" for the company [2][4]. Core Views - Short-term sales pressure is expected to continue, but the company has significant long-term operational advantages. The report anticipates a healthy and steady growth driven by strong retail operational capabilities [4]. - The company has adjusted its net profit forecasts for 2024-2026 to RMB 1.9 billion, RMB 2.21 billion, and RMB 2.45 billion respectively, down from previous estimates of RMB 2.39 billion, RMB 2.62 billion, and RMB 2.89 billion [4]. - The report highlights that online sales are expected to continue growing, with a projected increase in online revenue share to 30% in FY2025Q1, compared to 20-30% in FY2024 [4]. Summary by Sections Sales Performance - The company’s retail and wholesale business total revenue is expected to show a year-on-year decline in the mid-single digits for FY2025Q1, with online growth outpacing offline due to fluctuating consumer demand and weak foot traffic [4]. - The report references industry peers, noting that the company’s revenue performance in June and July is expected to mirror Q1 trends, with continued differentiation between online and offline channels [4]. Profitability - The report indicates that the increase in online sales and negative operating leverage may impact overall profit margins. The overall discounting is expected to deepen slightly due to the higher proportion of online sales [4]. - The company’s historical return on equity (ROE) remains high, and it is expected to achieve further growth through enhanced multi-channel retail operations and optimized store structures [4]. Dividend Policy - The company has maintained a high dividend payout ratio of around 100% since 2021, demonstrating a commitment to returning value to shareholders [4].