TOPSPORTS(HK:06110) Shenwan Hongyuan Securities·2025-06-28 14:20Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong performance relative to the market [5][22]. Core Insights - The company's FY26 Q1 operational performance met expectations, with a slight decline in sales but a stable inventory situation. The overall consumer demand is slowly recovering, and the company is innovating its sales strategies to mitigate the impact of declining foot traffic [5]. - The company is expanding its outdoor segment by partnering with international brands, aiming to enhance its market presence and profitability [5]. - The focus remains on high-quality growth in the sports apparel retail sector, with ongoing collaborations with major brands like NIKE and Adidas [5]. Financial Data and Profit Forecast - Revenue projections for FY2024 to FY2028 are as follows: - FY2024: 289.3 billion RMB - FY2025: 270.1 billion RMB (down 7% YoY) - FY2026E: 259.4 billion RMB (down 4% YoY) - FY2027E: 273.4 billion RMB (up 5% YoY) - FY2028E: 290.7 billion RMB (up 6% YoY) [2][14] - Net profit forecasts for the same period are: - FY2024: 22.1 billion RMB (up 21% YoY) - FY2025: 12.9 billion RMB (down 42% YoY) - FY2026E: 12.9 billion RMB (flat YoY) - FY2027E: 14.2 billion RMB (up 10% YoY) - FY2028E: 15.5 billion RMB (up 9% YoY) [2][14]. - The company's gross margin is projected to be 41.8% in FY2024, decreasing to 38.4% in FY2025, with a gradual recovery expected thereafter [2][10]. Market Data - As of June 27, 2025, the closing price of the company's stock was 3.12 HKD, with a market capitalization of 19.348 billion HKD [3][5]. - The stock has experienced a 52-week high of 4.37 HKD and a low of 2.11 HKD, indicating volatility in its market performance [3].