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.

Equity Bottom-Up

Topsports International / Equity Bottom-Up

<ul><li>1H26 (ending Aug 2025) results were slightly better than expected, thanks to resilient GP margin.</li><li>Even though we are cautious about sales growth ahead in 2H26E, margin expansion is still likely given the strong support from principal brands and closure of many under-performing stores.</li><li>Thanks to various positive signs out of Nike, we start to have more confidence on its turnaround (even it may take quite some time). Due to the 8% FY27E yield, we maintain BUY.</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.

1H26 (ending Aug 2025) results were slightly better than expected, thanks to resilient GP margin.Even though we are cautious about sales growth ahead in 2H26E, margin expansion is still likely given the strong support from principal brands and closure of many under-performing stores.Thanks to various positive signs out of Nike, we start to have more confidence on its turnaround (even it may take quite some time). Due to the 8% FY27E yield, we maintain BUY.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) - Guidance Kept; Prioritizing Profit over Sales

Thematic (Sector/Industry)

<ul><li>On one hand, retail sales growth in 5-1 Golden Week was a beat (after a soft Feb-Mar and an inline Apr).</li><li>On the other hand, retail discounts surprisingly widened due to increased competition from the de-stocking by brands like Adidas and Li Ning.</li><li>While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes on the end demand and intensity of competition. </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.

On one hand, retail sales growth in 5-1 Golden Week was a beat (after a soft Feb-Mar and an inline Apr).On the other hand, retail discounts surprisingly widened due to increased competition from the de-stocking by brands like Adidas and Li Ning.While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes on the end demand and intensity of competition. 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.

China Sportswear Sector – 5-1 sales beat but competition intensified

<ul><li>Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.</li><li>While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.</li><li>Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.</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.

Even though we are trimming our FY22E net profit forecasts, we believe the sector has already bottomed out in 1Q23E, supported by: 1) decent YTD retail sales growth, 2) turn around in inventory level and retail discounts.While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better retail discounts and cheaper input costs, etc.Therefore, for brands with a higher DTC mix, we believe brands like Anta (2020 HK) and Topsports (6110 HK) are going to outperform.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.

China Sportswear Sector – We expect prudent guidance but decent margins

<ul><li>Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.</li><li>Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.</li><li>In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.</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.

Resilient online sales growth during double 11, where Tik Tok, PDD and JD platforms continued to outperform.Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market expectation, similar to online sales growth in Sep 2022 and had picked up vs Oct 2022.In terms of platforms, YoY growth for Alibaba (Tmall + Tao Bao)/ JD/ PDD/ TikTok increased by ~flattish/ ~teens/ 27%/ 38%.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.

China Sportswear Sector – Sequential improvements during double 11

<ul><li>Sales drop of the principal brands narrowed in 2H25 (ending Feb 2025) vs 1H25.</li><li>However, because of the weaker-than-expected GP margin and other brands’ sales, FY25 net profit was a miss; and FY26E guidance is conservative in our view.</li><li>However, thanks to an impressive payout ratio of 135% and strong cash flow, we tend to believe that the dividend yield in FY26E could also be decent (CMBI est. 9%). Hence we maintain our BUY rating.</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.

Sales drop of the principal brands narrowed in 2H25 (ending Feb 2025) vs 1H25.However, because of the weaker-than-expected GP margin and other brands’ sales, FY25 net profit was a miss; and FY26E guidance is conservative in our view.However, thanks to an impressive payout ratio of 135% and strong cash flow, we tend to believe that the dividend yield in FY26E could also be decent (CMBI est. 9%). Hence we maintain our BUY rating.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) - Prudent Guidance but Strong Cash Flow & Yield

Hong Kong

Topsports International Holdings Limited is a leading sportswear retailer primarily engaged in the trading of sports shoes and apparel, and the distribution of international brands such as Nike, Adidas, and Puma. The company also leases commercial spaces for concessionaire sales and operates in the esports sector. It was founded in 1999 and is headquartered in Kwai Chung, Hong Kong.

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Topsports International (6110 HK)

Topsports (6110 HK) - Guidance Kept; Prioritizing Profit over Sales

Even though we are cautious about sales growth ahead in 2H26E, margin expansion is still likely given the strong support from principal brands and...

CMB International

China Sportswear Sector – 5-1 sales beat but competition intensified

While fundamentals (sales, discounts and inventory) are trending good into 2H23E and setting up for a decent FY24E, we should still keep our eyes...

CMB International

China Sportswear Sector – We expect prudent guidance but decent margins

While we expect a more conservative FY23E guidance by the brands, we do see decent upside surprises from GP margin improvements, helped by better...

CMB International

China Sportswear Sector – Sequential improvements during double 11

Based on our channel check and CMBI est., the online GMV growth during 2022’s double 11 was at ~14% YoY, inline with CMBI est. and beat market...

CMB International

Topsports (6110 HK) - Prudent Guidance but Strong Cash Flow & Yield

Sales drop of the principal brands narrowed in 2H25 (ending Feb 2025) vs 1H25. However, because of the weaker-than-expected GP margin and other...

CMB International

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