TOPSPORTS(06110) Soochow Securities·2024-10-28 02:20Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company reported FY25H1 results showing a revenue of 13.055 billion yuan, down 7.9% year-on-year, and a net profit of 874 million yuan, down 34.7% year-on-year, primarily due to increased promotional efforts and deeper discounts leading to a decline in gross margin [2] - The company continues to enhance its brand matrix, optimize offline stores, and strengthen membership operations, with significant growth in online sales through platforms like Douyin [2][3] - Despite the challenging retail environment, the long-term growth potential in the sports sector remains, supported by stable cash flow and high dividend payouts [3] Financial Performance Summary - FY2023A total revenue was 27.074 billion yuan, with a year-on-year decline of 15.07%. For FY2024A, revenue is projected to increase to 28.950 billion yuan, a growth of 6.93% [1] - The net profit for FY2023A was 1.837 billion yuan, with a year-on-year decrease of 24.93%. The forecast for FY2024A is a net profit of 2.213 billion yuan, reflecting a growth of 20.49% [1] - The latest diluted EPS for FY2023A was 0.30 yuan per share, with projections of 0.36 yuan for FY2024A and a decline to 0.21 yuan for FY2025E [1][11] - The company’s gross margin for FY25H1 was 41.1%, down 3.6 percentage points year-on-year, attributed to increased promotional activities and a higher proportion of lower-margin wholesale sales [3] - The inventory as of FY25H1 was 6.12 billion yuan, an increase of 6.4% year-on-year, with inventory turnover days rising to 145 days [3]