Topsports International Holdings (6110.HK), a leading Chinese sportswear distributor, saw its shares plummet 10.68% in intraday trading, marking its most significant single-day decline since April 7. The sharp drop comes in the wake of Citi maintaining a "buy" rating on the stock but trimming its target price from HK$3.80 to HK$3.75.

The downward adjustment in the target price follows Topsports management's cautious outlook for the fiscal year 2026. In an investor meeting, the company indicated that it expects the full-year net profit value for FY26E to be "largely flat year-over-year," implying weak topline growth. This conservative projection reflects the ongoing promotional environment in the marketplace and various uncertainties facing the industry.

In response to the challenging market conditions, Topsports has adopted a prudent approach by carefully placing pre-orders with its principal brands, Nike and Adidas, for the second half of the calendar year. Despite these challenges, management remains "cautiously optimistic" about the FY26E outlook and has not observed any material changes in support from its principal brands to China retail partners at this stage. The stock's sharp decline today brings its year-to-date performance to a 5.7% drop, underscoring the ongoing pressures faced by the sportswear sector in China.