TOPSPORTS(HK:06110)2024-09-11 10:43Investment Rating - The report maintains a "Buy" rating for the company, Tabo (6110.HK) [1] Core Views - Despite short-term performance pressures and a lack of growth drivers, the current stock price reflects the anticipated decline in profits for 1HFY25 and the management's pessimistic outlook for 2HFY25 [1] - The stock is currently valued at 7.8x CY25 P/E, indicating limited room for further decline [1] - The report anticipates a recovery in brand and product momentum for Nike and Adidas over the next 12 months, which could drive revenue growth for Tabo [1] - The expected dividend yield for FY25 is 11.2%, positioning Tabo as a strong long-term value investment [1] Financial Forecasts - The projected revenue for FY2025 is 26,246 million RMB, reflecting a 9% decline year-on-year [2][3] - The forecasted net profit attributable to shareholders for FY2025 is 1,427 million RMB, a significant decrease of 36% compared to FY2024 [2][3] - The PE ratio for FY2025 is estimated at 8.9x, with a projected ROE of 14% [2][3] Key Financial Metrics - Revenue for FY2023 was 27,073 million RMB, with a year-on-year decline of 15% [2][3] - The company expects to maintain a 100% dividend payout ratio, leading to a high dividend yield [1] - The operating profit margin is projected to stabilize around 41.2% for the upcoming years [3][4] Market Position and Strategy - Tabo is focusing on enhancing its competitive advantages in retail by optimizing its brand matrix and expanding consumption scenarios [1] - The company aims to improve store operations and inventory efficiency to support brand sales and maintain stable gross margins [1] - Management has indicated a need to adjust FY25 full-year performance guidance due to anticipated challenges in terminal demand [1]