Golden resource news bocom intl released a research report stating that topsports (06110) saw a decline in revenue and net income in the first half of the 2025 fiscal year. Since the beginning of this year, affected by the pressure on customer traffic, revenue decreased by 7.9% year-on-year. The gross margin dropped by 3.6 percentage points year-on-year, mainly due to the deepening discount rate and the increased proportion of wholesale channels with lower gross margins. The net income margin fell by 2.7 percentage points year-on-year to 6.7%. The midterm dividend payout ratio reached 99.4%.

In the first half of the fiscal year, the number of stores decreased by more than 300. By the end of the first half of 2025, topsports operated a total of 5,813 stores, with a total sales area of directly operated stores decreasing by 1.9% year-on-year compared to last year, while the sales area per store increased by 4.8% year-on-year. The company's cumulative memberships increased by 10.8% year-on-year. Membership quality continues to improve. In addition, the company actively expands its brand cooperation matrix and cooperates with the Canadian high-end off-road running brand norda.

Considering the ongoing pressure on customer traffic, the bank has lowered the company's financial estimates. The target price is HK$3.06, based on a PE ratio of 11 times for the 2025-26 fiscal year, and the rating has been downgraded to neutral.