Topsports International Holding Ltd. May-Q operational update below expectation; cut estimates and PO

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Topsports International Holding Ltd. May-Q operational update below expectation; cut estimates and PO

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Topsports International Holding Ltd.

May-Q operational update below

expectation; cut estimates and PO

Reiterate Rating: NEUTRAL | PO: 2.50 HKD | Price: 2.05 HKD

Weak near-term retail largely priced in; reiterate Neutral 26 June 2026

Topsports’ May-Q results came in below expectations, with retail sales declining by low- Equity

teens% (vs LSD% decline in Feb-Q). The weakness was mainly driven by soft demand,

stiff competition, front-loaded CNY purchase, and unfavorable weather during seasonal

Key Changestransitions. The performance was also worse than closest peer Pou Sheng’s -3%, likely

due to base effect and ongoing store network optimization. June sales were also under (CNY) Previous Current

pressure, with no clear inflection point yet. We cut FY27/28E estimates by 7%/5% to Price Obj. HK$3.00 HK$2.50

reflect a slower growth outlook and PO by 17% to HK$2.5 on a lower P/E (from 11x to 2027E Rev (m) 25,334.5 24,452.5

10x), factoring in the risk of reliance on principal brands (87% of total sales in FY26). We 2028E Rev (m) 25,926.3 25,327.9

reiterate Neutral on limited earnings visibility amid stiff industry competition/deepening 2029E Rev (m) 26,754.4 26,320.5

retail discounts. Nonetheless, solid dividend yields (>10%) should continue to offer 2027E EPS 0.20 0.19

downside support. 2028E EPS 0.21 0.20

May-Q highlights 2029E EPS 0.23 0.22

Total retail sales declined low-teens% YoY in May quarter, deteriorating from Feb

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quarter (LSD% decline). Online channel continued to outperform, but to a lesser extent Research Analyst

QoQ. Gross floor space continued to shrink, down 2.9% QoQ/11.2% YoY, which slightly Merrill Lynch (Singapore) +65 6678 0417