Walter Woo, an analyst from CMB International Securities, maintained the Buy rating on Topsports International Holdings Limited. The associated price target is HK$3.77.
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Walter Woo has given his Buy rating due to a combination of factors that highlight Topsports International Holdings Limited’s potential for profitability despite current challenges. The company’s first half of fiscal year 2026 results exceeded expectations, largely due to a robust gross profit margin. Although there is caution regarding sales growth in the second half of fiscal year 2026, margin expansion remains probable, supported by strong backing from key brands and the closure of underperforming stores.
Furthermore, the management’s confidence in maintaining a flat net profit and increasing net profit margin for fiscal year 2026, along with a commitment to distribute approximately 100% of net profit as dividends, reinforces the positive outlook. Despite the challenging environment in the sportswear industry, the company’s gross profit margin is expected to improve, aided by strategic store closures and increasing average sales per store. Additionally, the attractive dividend yield and signs of a turnaround for Nike contribute to the resilience of Topsports’ share price, justifying the Buy rating.
In another report released on October 23, Jefferies also maintained a Buy rating on the stock with a HK$6.40 price target.