Macquarie: Downgrade TOPSPORTS (06110) target price by 65% to 2.5 Hong Kong dollars, rating lowered to "Neutral."

Morgan Stanley released a research report stating that they are lowering the target price for TOPSPORTS (06110) by 65%, from 7.2 Hong Kong dollars to 2.5 Hong Kong dollars, and downgrading their rating to "neutral". Based on lower revenue and profit forecasts, the bank has reduced the company's net profit forecast for the fiscal years 2025 and 2026 by 34% and 35% respectively. The report cites the company's profit warning, forecasting a 35% decrease in net profit for the first half of the fiscal year 2025 due to unfavorable revenue and gross profit margin. Although the revenue decline may widen in the second half of the fiscal year, the company is expected to maintain a 100% profit payout ratio if there are no major investments.