Investment Rating - The report maintains a "Buy" rating for China Overseas Development, expecting a price increase of over 15% in the next 6-12 months [2][6]. Core Insights - The company experienced a decline in revenue and profit during the current period, attributed to project turnover timing and the structural impact of high land prices and low-margin projects [4]. - Despite the challenges, the company demonstrated strong sales resilience, outperforming the top 10 real estate companies in terms of sales decline [4]. - The company is focusing its investments on first and second-tier cities, maintaining a strong land acquisition strategy [4]. - Financially, the company remains robust with low net debt ratios and financing costs, positioning it well for future recovery [4]. Financial Performance Summary - Revenue for 2022 was 180,322 million RMB, with a projected revenue of 202,524 million RMB for 2023, reflecting a growth rate of 12.31% [3]. - The net profit attributable to shareholders for 2022 was 23,265 million RMB, with a forecasted net profit of 25,610 million RMB for 2023, indicating a growth rate of 10.08% [3]. - The diluted earnings per share (EPS) for 2022 was 2.13 RMB, expected to be 2.34 RMB in 2023 [3]. - The company’s price-to-earnings (P/E) ratio is projected to be 5.39 for 2023, indicating a favorable valuation [3]. Sales and Market Position - For the first nine months of 2024, the company achieved sales of 198.848 billion RMB, a decline of 16.8% year-on-year, while the top 10 real estate companies saw a decline of 32.5% [4]. - The company ranked second among the top 100 real estate companies in terms of sales, improving its position from the previous year [4]. Land Acquisition Strategy - In the first nine months of 2024, the company acquired land in 9 cities with a total investment of 20.3 billion RMB, focusing heavily on first and second-tier cities [4]. - The equity acquisition amount reached 18.6 billion RMB, with an equity ratio of 91.5% [4]. Profitability and Valuation - The report projects a slight decrease in net profit for 2024 to 24.252 billion RMB, with expected growth rates of 7.2% and 4.2% for 2025 and 2026, respectively [4]. - The current stock price corresponds to a P/E valuation of 6.0x for 2024, indicating potential for future appreciation [4].

Investment Rating - The investment rating for Topsports has been downgraded to "Hold" with a target price of HK$2.82, based on a 12x P/E for FY2/25E [2][4]. Core Views - The performance in 1H25 aligns with profit warnings, but the underlying conditions are weaker than previously anticipated. The outlook for 2H25E is further deteriorating, and it may take Nike 1-2 years to turn around the situation [1][2]. - Topsports reported a sales decline of 8% year-on-year to RMB 13.1 billion and a net profit drop of 35% to RMB 874 million, consistent with prior profit warnings. The decline is attributed to reduced offline traffic, increased retail discounts, and a higher proportion of low-margin e-commerce sales [1][2]. - Despite a high dividend yield of 8% for FY2/25E, the negative outlook for the second half of the year and Nike's recovery timeline led to the downgrade [2][4]. Revenue Summary - Revenue for FY25E is projected at RMB 26.69 billion, reflecting a year-on-year decrease of 8%. The revenue estimates for FY26E and FY27E are RMB 27.67 billion and RMB 29.84 billion, respectively, indicating a recovery of 4% in FY26E [7][11]. - The gross profit margin is expected to decline to 39.1% in FY25E, with a slight recovery to 39.8% in FY26E and 39.9% in FY27E [7][11]. Profitability Metrics - Net profit for FY25E is estimated at RMB 1.31 billion, down 41% year-on-year, with projections of RMB 1.53 billion and RMB 1.84 billion for FY26E and FY27E, respectively [7][11]. - The diluted earnings per share for FY25E is projected at RMB 0.212, with further declines expected in FY26E and FY27E [7][11]. Market Position and Challenges - The company faces significant challenges due to its reliance on Nike, which is expected to take 1-2 years to recover. The industry is also experiencing inventory risks, with major brands planning increased promotions [1][2]. - The management has provided guidance indicating a full-year sales decline and a net profit drop of 35%-45% for FY25E, reflecting a challenging market environment [1][2].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HK$19.58, reflecting a potential upside of 23.3% from the current price of HK$15.88 [3][6][18]. Core Insights - The company has reiterated its FY24E targets, but the report expresses caution due to weak demand and inventory buildup. However, gradual improvement is anticipated for FY25E [1][6]. - Retail sales in Q3 2024 showed a slight improvement compared to expectations, with e-commerce growth outpacing offline channels. The report highlights the importance of the upcoming Double 11 shopping festival for sales performance [1][6]. - The management's focus on cost-saving measures and efficiency improvements is noted, but concerns remain regarding operating profit margins due to increased retail discounts and fixed operational costs [1][6]. Summary by Sections Revenue Overview - The company reported revenues of RMB 28,162 million for FY24E, with a projected growth of 2% [2][7]. - Revenue growth is expected to improve to 7.2% in FY25E and 8.4% in FY26E [11][14]. Profitability Metrics - The net profit for FY24E is projected at RMB 3,103 million, with a net profit margin of 11% [7][12]. - The report anticipates a gradual increase in net profit to RMB 3,466 million in FY25E and RMB 3,895 million in FY26E [7][12]. Valuation Metrics - The company is currently trading at a P/E ratio of 11x for FY25E, which is considered attractive compared to the target P/E of 13x [6][16]. - The expected dividend yield for FY25E is 4% [6][16]. Inventory and Sales Dynamics - The inventory turnover ratio is approximately 5 months, indicating a slight increase from the previous quarter [1][6]. - Retail discounts have widened in offline channels, while e-commerce discounts have shown improvement [1][6]. Market Position and Strategy - The company has formed a joint venture to expand its brand presence in the Belt and Road regions, with significant investments planned [6][11]. - The management remains committed to achieving sales growth targets despite current market challenges [1][6].

28 Oct 2024 Earnings Summary CMB International Global Markets | Equity Research | Company Update Topsports (6110 HK) More time is needed despite the attractive yield 1H25 results were inline with the profit warning, but the underlying was more fragile than we previously thought. Given the worsening outlook in 2H25E and time Nike may take to turn around (might be 1 to 2 years), we downgrade Topsports' rating to HOLD, even though it has a 8% FY2/25E yield. Topsports (6110 HK) reported inline 1H25 results. Top ...

Investment Rating - The report maintains a BUY rating for the company, indicating a potential return of over 15% over the next 12 months [2][6][17]. Core Views - The company has slightly exceeded retail sales growth expectations in 3Q24, but there are concerns regarding weak demand and inventory levels for FY24E. A gradual improvement into FY25E is anticipated [2][6]. - The management has reiterated a low-single-digit sales growth and low-teen net profit margin for FY24E, but the report adopts a more conservative stance, projecting only 2% sales growth and an 11% net profit margin [2][6]. - The company is focused on cost savings and efficiency improvements, including reductions in advertising and promotional expenses and store closures, but there are concerns about operating profit margins due to increased retail discounts and fixed operating expenses [2][6]. Financial Summary - Revenue is projected to grow from RMB 28,162 million in FY24E to RMB 30,195 million in FY25E, reflecting a growth rate of 7.2% [3][11]. - Net profit is expected to increase from RMB 3,103 million in FY24E to RMB 3,466 million in FY25E, with a net profit margin of 11.5% [3][11]. - The company’s earnings per share (EPS) is forecasted to rise from RMB 1.19 in FY24E to RMB 1.33 in FY25E [3][11]. Valuation Metrics - The target price for the company has been raised to HK$19.58, based on a 13x FY25E P/E ratio, while the current trading P/E is 11x [4][6]. - The report highlights a dividend yield of 4% for FY25E, which is considered attractive [2][6]. Market Performance - The company’s stock has shown a 23.3% upside potential from the current price of HK$15.88 to the target price [4]. - Recent retail sales trends indicate a mixed performance, with e-commerce growth being more resilient compared to offline sales [2][6].

Investment 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]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company is set to enhance its performance through the acquisition of high-quality assets, with a focus on wind and solar energy projects, which are expected to significantly contribute to its profitability in the future [2] - The acquisition involves cash purchases of controlling stakes in eight renewable energy companies, with a total installed capacity of 2.0329 million kilowatts, at a transaction price of 1.686 billion yuan [1][2] - The expected increase in net profit for the company due to the acquisition is approximately 1.46 billion yuan for the year 2024, representing a 3% increase compared to 2023 [2] Summary by Sections Acquisition Details - The company plans to acquire stakes in eight renewable energy companies, with a total installed capacity of 2.0329 million kilowatts, for a price of 1.686 billion yuan [1] - The acquisition is valued at a price-to-book (PB) ratio of approximately 1.13 times, indicating reasonable pricing [1] Financial Performance - As of the first half of 2024, the company has a controlling wind power capacity of 28.35 GW and a photovoltaic capacity of 7.66 GW [2] - The expected net profit from the operational units acquired in the transaction is projected to be 1.41 billion yuan for the first half of 2024 [2] - The company's revenue for 2024 is forecasted to be 40.662 billion yuan, with a net profit of 5.951 billion yuan, reflecting a slight decrease of 4.77% compared to 2023 [3] Market Position and Future Outlook - The company is positioned as a leader in the green energy sector, with significant potential for future asset injections from its controlling shareholder, which holds approximately 40 GW of unlisted renewable energy assets [2] - The recent regulatory changes aimed at optimizing merger and acquisition processes are expected to enhance the company's valuation and market activity [2]

Investment Rating - The report maintains a "Buy" rating for Great Wall Motors [1][2] Core Views - Great Wall Motors' Q3 2024 core earnings align with estimates, and overseas sales growth is expected to support profitability in FY25 [1] - The company plans to launch seven new models in FY25, which may positively impact sales in the Chinese market [1] - The report anticipates a 29% year-on-year increase in overseas sales, targeting 580,000 units in FY25 [1][2] - The net profit for Q3 2024 was RMB 3.4 billion, which was 5.7 billion lower than expected due to unexpected foreign exchange losses and delays in VAT refunds [1][2] Financial Summary - Revenue projections for FY25 have been raised from 1.3 million units to 1.36 million units, with a 3% growth expected in China due to new model launches [2] - The net profit forecast for FY25 has been increased by 7% to RMB 14 billion, while the FY24 net profit estimate has been reduced by 5% [2] - The target price has been adjusted from HKD 14.00 to HKD 17.00, reflecting improved market sentiment [2][4] Performance Metrics - Revenue (in million RMB) is projected to grow from 204,470 in FY24 to 236,000 in FY25, and further to 258,850 in FY26 [3][10] - Net profit is expected to increase from 12,768 in FY24 to 14,023 in FY25, and then to 13,887 in FY26 [3][10] - The gross margin is projected to be 20.0% in FY24, improving to 20.3% in FY25, before slightly declining to 19.7% in FY26 [8][10] Market Position - Great Wall Motors aims to enhance its overseas market presence through local assembly plants and expects stable profit margins in overseas markets despite increasing competition by FY26 [1][2] - The company is focusing on launching new models in the electric vehicle segment, which is seen as crucial for maintaining competitiveness in the evolving automotive landscape [1][2]

Investment Rating - Maintain BUY rating for Great Wall Motor with a target price raised from HK$14.00 to HK$17.00, indicating an upside potential of 18.2% from the current price of HK$14.38 [2][3]. Core Insights - Great Wall Motor's 3Q24 core earnings were in line with estimates, with revenue about 5% higher than previous forecasts, although net profit was impacted by unexpected foreign exchange losses and VAT refund delays [2]. - The company is expected to achieve overseas sales growth of 29% YoY in FY25E, supported by new models and increased local content [2]. - A decline in sales volume in China is anticipated for FY24E, but the introduction of seven new models in FY25E could revitalize sales [2]. Financial Performance Summary - Revenue is projected to grow from RMB 173,212 million in FY23A to RMB 204,470 million in FY24E, reflecting an 18.0% YoY growth [1]. - Net profit is expected to rebound significantly from RMB 7,021.6 million in FY23A to RMB 12,768.3 million in FY24E, marking an 81.8% increase [1]. - The company's gross margin is projected to stabilize around 20.0% in FY24E, with a slight narrowing expected in FY26E due to increased competition in overseas markets [2]. Earnings Revisions - FY25E net profit forecast has been revised up by 7% to RMB 14 billion, while FY24E net profit has been cut by 5% due to the earnings miss in 3Q24 [2][5]. - Sales volume forecast for FY25E has been increased from 1.3 million units to 1.36 million units, indicating a 3% growth in China [2]. Valuation Metrics - The P/E ratio is projected to decrease from 16.5x in FY23A to 9.1x in FY24E, reflecting improved earnings expectations [1][7]. - The dividend yield is expected to rise from 2.2% in FY23A to 3.9% in FY24E, indicating a more attractive return for investors [1][7].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15 HKD, indicating an expected relative return of over 20% within the next six months [1]. Core Insights - The company has reported better-than-expected earnings, with a projected net profit growth of 140-145% year-on-year for Q1-Q3 2024, amounting to approximately 330-340 million USD [1]. - The growth in net profit is attributed to the normalization of the global footwear market and a significant increase in demand for the company's shoe products from brand clients [1]. - The company is balancing demand with order scheduling and has implemented an orderly overtime plan to support net profit growth, alongside steady capacity increases throughout the year [1]. Summary by Sections Financial Performance - The company’s manufacturing revenue growth for the first nine months of 2024 shows a positive trend, with monthly growth rates of 13%, -12%, 0%, +3%, +8%, +3%, +22%, +21%, and +27% [1]. - The report indicates that after previous years of pandemic and inventory destocking, the leading footwear supply chain is regaining its growth momentum [1]. Market Position - Adidas has raised its full-year revenue guidance, which is expected to benefit the company as a key supplier in Adidas' footwear supply chain [1]. - The report expresses optimism regarding Adidas' recovery, suggesting that the improved guidance reinforces the operational cycle of major brands and restores growth momentum [1]. Earnings Forecast - Based on the performance in Q1-Q3 2024, the earnings forecast has been revised upwards, with expected revenues of 8.65 billion USD, 9.645 billion USD, and 10.935 billion USD for FY24-26 [1]. - The projected net profits for these years are 430 million USD, 480 million USD, and 530 million USD, respectively, which are higher than previous estimates [1]. - The expected EPS for FY24-26 is revised to 0.27 USD, 0.30 USD, and 0.33 USD per share, with corresponding PE ratios of 7X, 6X, and 6X [1].