Investment Rating - The report maintains an "Outperform" rating for the company, with a target price of HKD 6.31 per share, based on a FY25 PE of 18X [2]. Core Insights - The sustained profitability of Moncler and Canada Goose is attributed to precise targeting of high-end consumer demographics, an increase in direct sales channels, and an expansion of product categories. The report highlights that Bosideng has outperformed other leading apparel brands in the domestic and international markets over the past six years, which is closely linked to its reforms and expansions in these areas [2]. - The report projects Bosideng's net profits for FY25 and FY26 to be CNY 35.7 billion and CNY 41.3 billion, respectively, with an upward revision from the previous estimate of CNY 32.4 billion for FY25 [2]. Summary by Sections Company Performance - Both Moncler and Canada Goose have achieved a compound annual growth rate (CAGR) of over 20% in revenue and net profit since their listings, with Moncler showing a CAGR of 20% in revenue and 24% in net profit from 2011 to 2022 [3][4]. - Moncler's revenue in 2022 reached EUR 2.603 billion, while Canada Goose's revenue for FY2023 was CAD 1.217 billion, reflecting a CAGR of 24% from FY2015 to FY2023 [5]. Market Positioning - Moncler has established a strong luxury brand positioning through product, marketing, and channel iterations since its inception in 1952, while Canada Goose emphasizes functionality and Canadian manufacturing in its branding strategy [20][27]. - The report notes that Moncler's direct retail channel accounted for 80% of its sales in 2022, significantly higher than Canada Goose's 67% [35]. Product Strategy - Moncler has diversified its product offerings through initiatives like the Moncler Genius project, which targets younger consumers and aims to extend the brand's appeal beyond traditional outerwear [23][25]. - Canada Goose has expanded its product range to include lightweight down products and non-outerwear items, responding to diverse consumer needs and preferences [27]. Financial Projections - The report anticipates Bosideng's net profit for FY25 to be CNY 35.7 billion, with a target price adjustment reflecting a 15% increase from previous estimates [2]. - The projected net profit for FY26 is CNY 41.3 billion, indicating a positive growth trajectory for the company [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1]. Core Views - The company's FY2025H1 revenue was 13.055 billion HKD, a decrease of 7.9% year-on-year, primarily due to a weak retail environment and a double-digit decline in offline same-store traffic. The net profit attributable to shareholders was 874 million HKD, down 34.7%, mainly due to a decrease in gross margin and an increase in expense ratio due to negative operating leverage. Despite the challenging consumption environment, the company maintains its profit forecast for FY2024-2026, expecting net profits of 1.33 billion, 1.53 billion, and 1.81 billion HKD respectively, with current stock prices corresponding to PE ratios of 12.0, 10.4, and 8.8 times [1][21]. Summary by Sections 1. Profit Pressure from Discounts and Negative Operating Leverage - FY2025H1 revenue was 13.055 billion HKD, down 7.9% year-on-year, attributed to a weak retail environment and a decline in offline traffic. The main brand revenue was 11.351 billion HKD, down 8.1%, while other brands generated 1.609 billion HKD, down 6.5% [1][10][12]. - The company has seen a shift towards online and wholesale revenue, with online direct sales accounting for over 30% of total direct sales [15] 2. Margin Decline and Cost Control - The gross margin for FY2025H1 was 41.1%, a decrease of 3.6 percentage points, primarily due to increased discounts and a higher proportion of online sales. The SG&A expense ratio was 33.1%, slightly up by 0.2 percentage points [16][18]. - Operating profit margin was 8.6%, down 3.6 percentage points, while the net profit margin was 6.7%, down 2.7 percentage points [17][18]. 3. Operational Efficiency and Cash Flow - As of FY2025H1, the company had inventory of 6.12 billion HKD, up 6.4%, with inventory turnover days at 148.3 days, an increase of 7.4 days year-on-year. The net operating cash flow was 2.614 billion HKD, up 2.5%, supporting a high dividend payout ratio of 99.4% [19][20]. - The company continues to focus on efficiency in its offline stores, reducing the number of stores by 6.4% to 5,813, while maintaining single-store sales area growth of 4.8% [13][14]. 4. Profit Forecast and Investment Recommendations - The company maintains its profit forecast for FY2024-2026, expecting net profits of 1.33 billion, 1.53 billion, and 1.81 billion HKD respectively. The current stock price corresponds to PE ratios of 12.0, 10.4, and 8.8 times [21].

Investment Rating - The report maintains a "Buy" rating for Pop Mart (9992 HK) with a 6-month outlook [2] Core Views - Pop Mart's Q3 2024 revenue surged over 120% YoY, with overseas revenue growing 4x [2] - Domestic online and offline channels showed strong growth, with e-commerce platforms increasing 135%-140% YoY [2] - International expansion accelerated, with 22 new stores opened in Q3 2024, bringing total overseas stores to 114 [3] - The company continues to diversify IP monetization channels and expand product categories [4] Financial Performance - Q3 2024 mainland China revenue grew 55%-60% YoY [2] - Hong Kong, Macau, Taiwan, and overseas revenue increased 440%-445% YoY [2] - The company is projected to achieve 2024-2025 revenues of 12 5/17 2 billion yuan, representing 98 4%/37 4% growth respectively [5] - Adjusted net profit (Non-IFRS) for 2024-2025 is forecasted at 3 14/4 40 billion yuan, with 163%/40% growth [5] Channel Performance - Offline retail stores grew 30%-35% YoY [2] - Offline robot stores increased 20%-25% YoY [2] - Online blind box machines rose 55%-60% YoY [2] - Tmall flagship store sales jumped 155%-160% YoY [2] - Douyin flagship store sales increased 115%-120% YoY [2] Product Development - Released 11/12/9 blind box products in July/August/September 2024 [2] - Launched 6/8/4 MEGA collectible series in July/August/September 2024 [2] - Introduced new product categories including cards, building blocks, and POP CUBE series [4] - Expanded IP monetization through game integration and physical product collaborations [4] International Expansion - Opened 22 new overseas stores in Q3 2024, exceeding H1 2024 additions [3] - Expanded to multiple countries including Thailand, Netherlands, Italy, USA, and Indonesia [3] - Total overseas stores reached 114 by September 2024 [3] Market Position - Current share price: 70 75 HKD [2] - Market capitalization: 95 013 23 million HKD [1] - Price-to-book ratio: 6 85 HKD [1] - Debt-to-asset ratio: 23 28% [1]

Investment Rating - The investment rating for the company is "Buy" with a target price set above the current price of 70.75 HKD, maintaining the rating for the next six months [2][5]. Core Insights - The company reported a significant revenue increase of 120%-125% year-on-year for Q3 2024, with mainland China revenue growing by 55%-60% and revenue from Hong Kong, Macau, and overseas regions soaring by 440%-445% [2][3]. - The company is expanding its retail presence, with 22 new stores opened in Hong Kong, Macau, and overseas by the end of September 2024, bringing the total to 114 stores [3]. - The company is diversifying its IP monetization channels and enhancing product interactivity, with new product lines and collaborations with various retail partners [4][5]. Summary by Sections Financial Performance - For 2024-2025, the company is projected to achieve revenues of 12.5 billion HKD and 17.2 billion HKD, representing year-on-year growth of 98.4% and 37.4% respectively [5]. - Adjusted net profit for the same period is expected to be 3.14 billion HKD and 4.4 billion HKD, with growth rates of 163% and 40% [5]. Market Expansion - The company has accelerated its international market expansion, with notable growth in overseas revenue driven by strong demand and rapid store openings [3]. - The online channels in Hong Kong, Macau, and overseas are transitioning from broad strategies to more refined operations, leveraging membership systems and holiday promotions [3]. Product Development - The company continues to innovate its product offerings, launching new categories such as cards and building blocks, and enhancing the playability of its products [4]. - Collaborations with various retail outlets have been established to facilitate rapid distribution of products [4].

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]