Topsports International Holdings Ltd

06110: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	HK$1.30	Vpzbg	Ghhdlycbmp

Topsports: Nike Troubles Continue to Plague; Fair Value Cut 6% to HKD 6.80

Ivan Su

Sep 11, 2024

We lowered Topsport’s fair value estimate to HKD 6.80 per share from HKD 7.20 following the company’s downbeat guidance about potential further deterioration in performance for the second half of fiscal 2025 (ending February), contrary to our previous expectation of sales and margin improvements. We now expect a 4% decline in sales for fiscal 2025, resulting in a 14% decline in net profit. However, we project a rebound in fiscal 2026, with an 8% increase in sales and a 48% growth in earnings. This turnaround is predicated on improvements in Nike's product offerings, driving both sales growth and operating leverage for Topsports.

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