TOPSPORTS(HK:06110) Huachuang Securities·2024-08-29 08:23Investment Rating - The report maintains a "Recommended" investment rating for the company with a target price of HKD 3.6, compared to the current price of HKD 2.9 [1]. Core Insights - The company's performance is under short-term pressure due to weak consumer spending and challenges in offline customer acquisition. The sales in the apparel, footwear, and textile categories showed only a 0.5% year-on-year growth from January to July, with a significant decline of 5.2% in July compared to June [1]. - Nike has lowered its full-year guidance, while Adidas is gradually recovering its sales. Nike's sales in Greater China are expected to decline in FY25, while Adidas has raised its full-year revenue forecast [1]. - The company is facing operational challenges, with a projected decline in revenue for FY25 and a potential decrease in gross margin due to higher online discounting compared to offline sales [1]. - Despite these challenges, the company is committed to maintaining a high dividend policy and enhancing operational efficiency through strategic partnerships [1]. Financial Summary - The total revenue forecast for FY2025 is adjusted to HKD 27.348 billion, reflecting a year-on-year decline of 5.5%. The net profit forecast for FY2025 is revised down to HKD 1.827 billion, a decrease of 17.4% [2]. - The company’s earnings per share (EPS) for FY2025 is projected at HKD 0.29, with a price-to-earnings (P/E) ratio of 8.9 [2]. - The financial indicators show a total revenue of HKD 28.950 billion for FY2024, with a growth rate of 6.9%, and a net profit of HKD 2.213 billion, reflecting a growth rate of 20.5% [2].