TOPSPORTS(06110)2024-11-01 08:43Investment Rating - The investment rating for the company is "Buy" and is maintained [3][4]. Core Views - The company reported a revenue decline of 8% year-on-year to 13.1 billion HKD for FY2025H1, with a net profit attributable to shareholders down 35% to 870 million HKD. The interim dividend payout ratio was 99.4% [3][4]. - The company maintains strong cost control despite pressure on terminal discounts, with a net profit margin decrease of 2.7 percentage points year-on-year to 6.7%, primarily due to a gross margin decline of 3.7 percentage points to 41.1%. This was influenced by significant retail pressure and an increase in online sales, which affected gross margins [4]. - Inventory levels remain manageable, with inventory turnover days increasing by 7 days year-on-year to 148 days. The company reported good cash flow from operating activities at 2.61 billion HKD, maintaining a high dividend payout ratio [4]. - Looking ahead, the company anticipates gradual recovery in performance due to adjustments in previous orders and improved support from Nike's new CEO. The sports industry demand has shown signs of recovery since October, and the company continues to implement cautious cost control measures [4]. Financial Summary - For FY2024, the company expects revenue of 28.93 billion HKD, with a projected decline of 8% in FY2025 to 26.736 billion HKD. The net profit is forecasted to drop to 1.377 billion HKD in FY2025, a decrease of 38% [8]. - The earnings per share (EPS) is projected to be 0.36 HKD for FY2024, decreasing to 0.22 HKD in FY2025, with a price-to-earnings (P/E) ratio of 13.70 for FY2024 and 10.84 for FY2025 [8].