Equity Analyst

Steve Zhou, CFA

Equity Bottom-Up

Topsports International Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/topsports-international-holdin" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International Holdin (6110 HK)</a> is a pure-play on Nike and Adidas retail sales in China, as it is a leading retail partner of Nike and Adidas in China.</li>
<li>Nike's Greater China sales grew 12% yoy during the most recent quarter.  During the earnings call, Nike management was bullish on the prospects of the China business.</li>
<li>The company currently trades at 13x forward PE, with a forward dividend yielf of 7%.  </li>
</ul>



Topsports International Holdin (6110 HK) is a pure-play on Nike and Adidas retail sales in China, as it is a leading retail partner of Nike and Adidas in China.
Nike's Greater China sales grew 12% yoy during the most recent quarter.  During the earnings call, Nike management was bullish on the prospects of the China business.
The company currently trades at 13x forward PE, with a forward dividend yielf of 7%.  


Topsports (6110 HK):  Beneficiary Of An Improving Nike China

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>3Q24 retail sales growth was at low-teens, in line with expectations but the underlying fundamentals are good.</li><li>We still think the outlook for Topsports is solid, despite industry headwinds.</li><li>Maintain BUY and TP of HK$9.23, based on 18x FY2/25E P/E (unchanged).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

3Q24 retail sales growth was at low-teens, in line with expectations but the underlying fundamentals are good.We still think the outlook for Topsports is solid, despite industry headwinds.Maintain BUY and TP of HK$9.23, based on 18x FY2/25E P/E (unchanged).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Topsports (6110 HK) – Turnaround Continues After a Resilient 3Q24

<ul><li>We believe Topsorts is undergoing a turnaround despite the macro uncertainty.</li><li>Sales growth may still be bumpy but boosted by increased efforts from the principal brands (on new products and marketing) and Topsports (self-initiated efficiency gains), we do foresee faster sales growth and margin improvements onwards.</li><li>The Company is only trading at 12x FY2/25E P/E, still attractive vs 4- year avg. of 13x and a 21% 3-year NP CAGR.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We believe Topsorts is undergoing a turnaround despite the macro uncertainty.Sales growth may still be bumpy but boosted by increased efforts from the principal brands (on new products and marketing) and Topsports (self-initiated efficiency gains), we do foresee faster sales growth and margin improvements onwards.The Company is only trading at 12x FY2/25E P/E, still attractive vs 4- year avg. of 13x and a 21% 3-year NP CAGR.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Topsports (6110 HK) – Turnaround Is on Track Despite Bumpy Sales

<ul>
<li>
<a href="https://www.smartkarma.com/entities/topsports-international-holdings" target="_blank" data-smartkarma-citation="entities:28153:1" rel="noopener">Topsports International Holdings (6110 HK)</a> announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.</li>
<li>The company trades at a 7% dividend yield, backed by strong free cash flow.</li>
<li>The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas' retail performance in China.</li>
</ul>



Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
The company trades at a 7% dividend yield, backed by strong free cash flow.
The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas' retail performance in China.


Topsports (6110 HK):  High Dividend Yield Supported By Strong Free Cash Flow

<ul><li>We initiate BUY on Topsports with TP based on 18x FY2/25E P/E and put it as our sector top pick.</li><li>We forecast 12%/ 20% of sales/ NP CAGR in FY2/23-26E vs -5%/ -4% during FY2/19-23, driven by major improvements in: 1) international brand sales (Nike to maintain its leadership and Adidas to see turnaround with effective strategy in China),</li><li>2) sales per store (driven by higher sales per sq. and increase in store size) and 3) the associated operating leverage.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We initiate BUY on Topsports with TP based on 18x FY2/25E P/E and put it as our sector top pick.We forecast 12%/ 20% of sales/ NP CAGR in FY2/23-26E vs -5%/ -4% during FY2/19-23, driven by major improvements in: 1) international brand sales (Nike to maintain its leadership and Adidas to see turnaround with effective strategy in China),2) sales per store (driven by higher sales per sq. and increase in store size) and 3) the associated operating leverage.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Topsports (6110 HK) – Localization and Efficiency-Led Turnaround

China

Topsports International Holdings Limited operates as a sports shoes and apparel retailer. The Company sells sports shoes, sports shirts, and other products. Topsports International Holdings markets its products throughout China.

Topsports International Holdings (6110 HK)

Topsports International Holdings (6110 HK)

Topsports (6110 HK): Beneficiary Of An Improving Nike China

Topsports International (6110 HK) is a play on improving Nike sales in China, trading at 13x forward PE and 7% forward dividend yield.

Steve Zhou, CFA

Topsports (6110 HK) – Turnaround Continues After a Resilient 3Q24

Sales growth acceleration should be from the new products and better marketing while margin improvement should be from self-initiated efficiency...

CMB International

Topsports (6110 HK) – Turnaround Is on Track Despite Bumpy Sales

Sales growth may still be bumpy but boosted by increased efforts from the principal brands (on new products and marketing) and Topsports (self...

CMB International

Topsports (6110 HK): High Dividend Yield Supported By Strong Free Cash Flow

Topsports is not only a yield play, but also a call option on the recovery of Nike and Adidas' retail performance in China, which have been...

Steve Zhou, CFA

Topsports (6110 HK) – Localization and Efficiency-Led Turnaround

We forecast 12%/ 20% of sales/ NP CAGR in FY2/23-26E vs -5%/ -4% during FY2/19-23, driven by major improvements in: 1) international brand sales

CMB International

Topsports (6110 HK): Beneficiary Of An Improving Nike China

​Topsports International (6110 HK) is a play on improving Nike sales in China, trading at 13x forward PE and 7% forward dividend yield.

Steve Zhou, CFA

Topsports (6110 HK) – Turnaround Continues After a Resilient 3Q24

Sales growth acceleration should be from the new products and better marketing while margin improvement should be from self-initiated efficiency...

CMB International

Topsports (6110 HK) – Turnaround Is on Track Despite Bumpy Sales

Sales growth may still be bumpy but boosted by increased efforts from the principal brands (on new products and marketing) and Topsports (self...

CMB International

Topsports (6110 HK): High Dividend Yield Supported By Strong Free Cash Flow

Topsports is not only a yield play, but also a call option on the recovery of Nike and Adidas' retail performance in China, which have been...

Steve Zhou, CFA

Topsports (6110 HK) – Localization and Efficiency-Led Turnaround

We forecast 12%/ 20% of sales/ NP CAGR in FY2/23-26E vs -5%/ -4% during FY2/19-23, driven by major improvements in: 1) international brand sales

CMB International

Topsports International (6110 HK) is a play on improving Nike sales in China, trading at 13x forward PE and 7% forward dividend yield.