TOPSPORTS(06110) Guotai Junan Securities·2024-10-26 22:36Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for medium to long-term growth driven by strong retail operational capabilities [1][3]. Core Insights - The company is expected to achieve healthy and steady growth in the medium to long term, despite a downward adjustment in net profit forecasts for FY2025-FY2027 due to the current domestic apparel consumption environment [1]. - For FY2025H1, the company's revenue was 13.05 billion RMB, a year-on-year decline of 8%, and net profit was 870 million RMB, down 35% year-on-year, which was in line with expectations [1][2]. - The gross margin for FY2025H1 was 41.1%, a decrease of 3.6 percentage points year-on-year, influenced by deeper discounts and changes in channel mix [1]. - The company plans to distribute an interim dividend of 0.14 RMB per share, maintaining a high dividend payout ratio of 100%, which is an increase from 74.2% in the same period of 2023 [1][2]. Financial Summary - The financial summary indicates a decline in revenue from 36.01 billion RMB in FY2021 to an estimated 26.55 billion RMB in FY2025, reflecting a compound annual growth rate (CAGR) of -8.3% [2]. - Net profit is projected to decrease from 2.77 billion RMB in FY2021 to 1.39 billion RMB in FY2025, representing a significant decline of 37.1% [2]. - The price-to-earnings (PE) ratio is expected to decrease from 18.9 in FY2022 to 11.3 in FY2025, indicating a more attractive valuation over time [2]. Market Performance - The company's stock is currently priced at 2.76 HKD, with a market capitalization of 17.115 billion HKD [5]. - The stock has experienced a 52-week price range between 2.23 and 6.74 HKD, indicating significant volatility [5].