TOPSPORTS(HK:06110) Haitong Securities·2024-11-06 11:16Investment Rating - The investment rating for the company is "Outperform the Market" [1] Core Views - The company reported a revenue of 13.05 billion yuan for FY25H1, a year-on-year decrease of 7.9%, primarily due to weak demand and a double-digit decline in same-store traffic [5] - The net profit attributable to shareholders was 870 million yuan, down 34.7% year-on-year, while operating cash flow increased by 2.5% to 2.61 billion yuan [5] - The gross margin decreased by 3.6 percentage points to 41.1%, attributed to sales weakness and increased inventory pressure [6] - The company maintained a high dividend payout ratio of nearly 100%, declaring an interim dividend of 0.14 yuan per share, resulting in a dividend yield of 5.5% [7] Financial Performance Summary - For FY25H1, retail and wholesale sales fell by 10-20% year-on-year, with retail sales down 8.9% and wholesale down 2.2% [7] - The company ended the period with 61.2 billion yuan in inventory, a 6.4% increase year-on-year, with inventory turnover days rising to 148 days [7] - The company expects net profits for FY2025, FY2026, and FY2027 to be 1.324 billion, 1.799 billion, and 2.152 billion yuan respectively, with a projected PE ratio of 13-15 times for FY2025 [8] Valuation and Forecast - The company is focusing on strengthening its main brand operations and optimizing operational efficiency while maintaining strong cash flow and high dividend rates [8] - The estimated reasonable value range for the stock is between 3.02 and 3.48 HKD per share, based on a conversion rate of 1 HKD = 0.92 CNY [8]