TOPSPORTS(06110) 浙商证券·2024-12-20 00:23Investment Rating - Buy (Maintained) [8] Core Views - The company's Q3 sales decline narrowed slightly compared to the first half of the fiscal year, with a mid-single-digit drop in total retail and wholesale sales for FY2025Q3 (9/1/2024-11/30/2024) [3] - E-commerce performance is expected to be better than offline, and direct sales are expected to outperform franchised sales [3] - The company continues to prioritize inventory health, aiming for optimization by year-end [3] - Direct sales channels are undergoing optimization, with a 4.4% YoY and 2.1% QoQ decrease in gross sales area for direct stores in Q3 2024 [4] - The company's brand partnership matrix remains strong, with Nike and Adidas being key partners, and new collaborations in outdoor, trail running, and IP culture sectors [5] - FY25/26/27 revenue is forecasted at -7%/+5%/+5% to 26.8/28.2/29.7 billion yuan, with net profit attributable to the parent company at -39%/+21%/+13% to 1.36/1.64/1.85 billion yuan [6] Financial Forecasts - FY2025E revenue: 26.8 billion yuan (-7.34% YoY), FY2026E: 28.2 billion yuan (+5.36% YoY), FY2027E: 29.7 billion yuan (+5.04% YoY) [6] - FY2025E net profit attributable to the parent company: 1.36 billion yuan (-38.61% YoY), FY2026E: 1.64 billion yuan (+21.05% YoY), FY2027E: 1.85 billion yuan (+12.62% YoY) [6] - FY2025E EPS: 0.22 yuan, FY2026E: 0.27 yuan, FY2027E: 0.30 yuan [6] - FY2025E P/E: 12.33X, FY2026E: 10.19X, FY2027E: 9.05X [6] Operational Highlights - Direct sales channels reduced by 331 stores in the first half of the fiscal year, with total sales area down 1.9% YoY but single-store sales area up 4.8% [4] - The company is focusing on opening larger stores and closing smaller ones to enhance the offline shopping experience [4] - Nike's new management team is expected to bring positive changes, reflecting the brand's emphasis on the Chinese and outdoor markets [5] - The company has expanded its brand portfolio with new partnerships in outdoor, trail running, and IP culture sectors, including HOKA ONE ONE, Kailas, Fanatics, and Norda [5] Valuation and Dividends - The company has maintained a cash dividend payout ratio of around 100% over the past three years [6] - The strong brand partnership matrix, healthy cash flow, and high dividend yield support the "Buy" rating [6]