Guotai Haitong: Maintain "Buy" rating on TOPSPORTS (06110) with a target price of HK$3.81.

Guotai Haitong released a research report stating that TOPSPORTS (06110) Q3 sales amount dropped by a high single digit, continuing the trend from H1. It is expected that the number of store closures will decrease significantly in the fiscal year 2026, maintaining the full-year guidance unchanged. NIKE has strengthened its cooperation with the company, recovering old inventory and reducing promotional efforts. Considering the short-term pressure on retail terminals, the bank slightly lowered the company's profit forecast. The bank expects the company's net profit attributable to owners to be 1.25/1.45/1.72 billion yuan for FY2026/27/28, giving a FY2027 PE of 15X. After conversion at a rate of 1 Hong Kong dollar to 0.92 RMB, the corresponding target price is 3.81 Hong Kong dollars per share, maintaining a "buy" rating. Guotai Haitong's main points are as follows: - Q3 sales amount dropped by a high single digit, continuing the trend from H1 - It is expected that the number of store closures will decrease significantly in the fiscal year 2026, maintaining the full-year guidance unchanged - NIKE has strengthened its cooperation with the company, recovering old inventory and reducing promotional efforts The bank also mentioned the risks of a deteriorating retail environment, increased industry competition, and deteriorating brand partnerships.