Citi Gives TOPSPORTS a Buy Rating with a HK$1.70 Target Price, First-Half Net Profit Meets Expectations

Stock News10-29 14:10

Citi has issued a research report giving TOPSPORTS (06110) a "Buy" rating with a target price of HK$1.70.

The company's net profit for the first half of fiscal 2027, covering the period through the end of August, was broadly in line with the bank's expectations, while operating cash flow rose 36% year on year to RMB 1.844 billion, equivalent to 2.8 times net profit, pointing to continued healthy earnings quality.

Supported by strong free cash flow and a solid balance sheet, the company's payout ratio for the first half edged up 1 percentage point year on year to 103%, with an interim dividend of RMB 11 cents per share, down from RMB 13 cents per share in the same period a year earlier.

The company has managed inventory prudently, with inventory balances falling 16% year on year and 10% from the end of the first half to RMB 4.918 billion, while inventory days decreased 3.6 days year on year to 146 days.

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