HK Stock Market Move | TOPSPORTS (06110) fell more than 4%, with the first half of the year's net profit attributable to shareholders expected to decline by 30%. Institutions point out that its outlook remains bleak.

TOPSPORTS (06110) fell more than 4%, reaching a decline of 4.13% at the time of publication, with a price of HK$2.32 and a turnover of HK$18.8485 million. On the news front, TOPSPORTS had previously issued a profit warning, forecasting a 35% year-on-year decline in net profit attributable to shareholders for the first half of fiscal year 2025. The decline in profit was mainly due to: the impact of weak consumption, with the company's revenue in the first half of the fiscal year declining year-on-year, especially affected by decreased offline customer traffic, leading to an increase in operating leverage and a rise in sales and management expenses; the company intensified promotional efforts in the first half of the fiscal year, with online discounts deeper than offline discounts and an increased proportion of online revenue, resulting in a decrease in gross profit margin year-on-year. CMB International believes that the company's performance is below expectations, mainly due to operational deleveraging, with the company's prospects still dim, but the stock price decline has made the dividend yield attractive. The bank pointed out that TOPSPORTS remains highly cautious about the future. Management believes that there will be no signs of improvement in the next quarter, or even in the entire second half of the fiscal year, based on the weak macroeconomic environment and the drag from certain brands. In light of this, the bank expects the group's retail sales to continue to decline, and gross profit to shrink as well. There is still a high chance of a more than 30% decline in net profit in the second half of the fiscal year.