TOPSPORTS(HK:06110)2025-10-23 02:00Financial Performance and Key Indicators - Overall revenue declined by 5.8% to RMB 12.3 billion, affected by weak consumer demand and flight traffic fluctuations [4] - Retail business revenue decreased by 3% year-over-year [4] - Wholesale business revenue declined by 20.3% [5] - Gross profit margin declined by only 0.1 percentage points to 41% despite deeper discounting [7] - Total expenses decreased by 5.5%, with expense ratio slightly increasing to 33.2% [7] - Net profit declined by 6% year-over-year, with net profit rate at 6.4% [11] Business Line Performance - Core brand sales revenue decreased by 4.8% to RMB 10.8 billion, while other brand sales revenue declined by 12.2% to RMB 1.4 billion [5] - Specialized vertical brands performed best, particularly in comprehensive sports and live sports categories [5] Market Data and Key Indicators - The textile and apparel industry grew by 2.5%, but the recovery pace was slower than the overall retail sales growth [20] - Consumer segmentation in the sports industry has become more diverse, with a shift towards specialized vertical interest communities [21] Company Strategy and Development Direction - The company is focused on refining its omni-channel retail agility and operational efficiency [2] - Plans to expand brand partnerships and enhance product R&D to capture segmented demand [22] - Emphasis on building a digital intelligence strategy to improve operational efficiency [23] Management Comments on Operating Environment and Future Outlook - The management remains optimistic about the second half of the fiscal year, aiming for flat net profit and improved net profit rate year-over-year [70] - The company acknowledges challenges in the market but is committed to fulfilling its performance guidelines [70] Other Important Information - Free cash flow was RMB 1.22 billion, representing 1.5 times the net profit for the same period [19] - The company maintains a robust cash generation capacity, with a dividend payout ratio consistent with the previous year [19] Q&A Session Summary Question: Future of Nike in China and partnership strategies - Management noted that Nike's recovery in China is slower than in other markets, and they are supportive of Nike's initiatives to reduce discounts and invest in offline channels [48][49] Question: Sustainability of brand support - Management believes that as a major partner, they will continue to receive strong support from brands, especially in challenging market conditions [65] Question: Outlook for H2 and next fiscal year - Management is committed to fulfilling full-year guidelines and expects net profit to be flat with an improved net profit rate year-over-year [70] Question: Product order breakdown and discount updates - Approximately 70% to 80% of Nike products are new, and the discount rate has stabilized [71][72] Question: Actos project and its future development - Actos is evolving into a community hub for running enthusiasts, emphasizing social interactions and brand collaborations [75][76]