Bocom International has issued a research report adjusting its profit forecasts for TOPSPORTS (06110). The firm lowered its earnings projections for fiscal years 2027 and 2028 by 5% to 11% and introduced an initial forecast for fiscal 2029. Based on a target price-to-earnings multiple of 13 times the fiscal 2027 earnings estimate, Bocom maintains its target price of HK$2.98 and a "Neutral" investment rating. While the company continues to face uncertainties, an expected dividend yield exceeding 10% is seen providing substantial downside protection for the share price.

For fiscal 2026, TOPSPORTS reported operating revenue of RMB 25.74 billion, a decrease of 4.7% year-on-year, aligning with the firm's prior expectations. The revenue decline narrowed to 3.7% in the second half of the fiscal year. Net profit attributable to shareholders decreased by 1.5% to RMB 1.27 billion, while the net profit margin improved by 0.1 percentage points year-on-year to 4.9%, largely in line with expectations.

Management indicated that revenue for fiscal 2027 faces some pressure. The company plans to continue its efficiency-first strategy, aiming to stabilize full-year profit at a level comparable to the previous year and improve the net profit margin through discount management and overall operational efficiency optimization. Regarding recent sales trends, management noted a slowdown in end-consumer demand following the Lunar New Year holiday, and overall discount intensity during the recent 618 shopping festival has not shown significant narrowing.