TOPSPORTS(06110) 国盛证券·2024-10-25 00:10Investment Rating - The report maintains a "Buy" rating for the company [3] Core Views - The company experienced a revenue decline of 7.9% year-on-year in FY2025H1, with a net profit drop of 34.7% to 870 million RMB, attributed to a challenging consumer environment and increased terminal discounts [1] - Despite short-term performance pressures, the company continues to implement a high dividend strategy, declaring an interim dividend of 0.14 RMB per share, resulting in a dividend payout ratio of 99% and a dividend yield of 5.4% based on the closing price on October 23 [1] - The company is expanding its brand partnerships and optimizing its store structure to ensure long-term growth, including becoming the exclusive operator for the high-end outdoor brand Norda in China [1][2] Revenue and Profitability - For FY2025H1, the company's revenue was 13.055 billion RMB, with a gross margin of 41.1%, down 3.6 percentage points year-on-year [1] - The company's retail and wholesale businesses both saw declines, with wholesale revenue down 2.2% to 2.04 billion RMB and retail revenue down 8.9% to 10.92 billion RMB [2] - The company anticipates a further revenue decline in FY2025, projecting a nearly 40% drop in net profit due to ongoing market uncertainties [6] Business Model and Strategy - The company is focusing on enhancing its online presence, with over 2,500 stores opening mini-programs and a 200% increase in sales through Douyin live streaming, making it the top player in the outdoor sports category on the platform [2] - The company has increased its membership base to 81 million, with member sales accounting for 93.7% of total sales, indicating strong consumer loyalty [2] Financial Forecast - The company’s revenue is projected to decline to 26.523 billion RMB in FY2025, with net profit expected to drop to 1.337 billion RMB [10][14] - The report adjusts the net profit forecasts for FY2025 to FY2027 to 1.337 billion RMB, 1.476 billion RMB, and 1.639 billion RMB respectively, with a corresponding P/E ratio of 12 times for FY2025 [6][10]