TOPSPORTS INT. (06110) Frequent pandemic outbreaks and global supply chain disruption, FY2022 sales dropped by 12% August 4, 2022 30

PSR Recommendation: ACCUMULATE Status: Initiation
Target Price: HKD7.54

Frequent pandemic outbreaks and global supply chain disruption, sales dropped by 12%
For the financial year ended 28 February 2022, Topsports recorded revenue of
RMB31,876.5mn (2021: RMB36,009.0mn), a decrease of 11.5% YoY, below our estimates of
RMB4,104mn. operating profit of RMB3,430.1mn, a decrease of 14.0% YoY. The profit
attributable to the shareholders during the year amounted to RMB2,446.5mn, a decrease of
11.7%, also below consensus. Final dividend for the FY2022 of RMB7.00 cents per ordinary
share and a special dividend of RMB23.00 cents per ordinary share, full year dividend of
$0.43, equivalent to a payout ratio of 109% (2021: 143%).
The decline of revenue was mainly due to the impact of frequent pandemic outbreaks and
global supply chain disruption, since late July and the second half of the financial year
respectively. When broken down by brand categories, revenue from the Principal brands
(including Nike and Adidas) was RMB27,569.3mn, down 12.3% YoY, and represents 86.5% of
total revenue. Other brands (including Puma, Converse, VF Corporation’s brands: i.e. VANS,
The North Face and Timberland, ASICS, Onitsuka Tiger, Skechers and LI-NING) generated
revenue of RMB4,005.2mn, down 6.1% YoY, and accounted for 12.6% of total revenue.
Revenue from e-Sports income was RMB66.0mn, down 19.0% YoY and accounted for 0.2%
of total revenue. When broken down by sales channel, retail operations decreased by 14.2%
to RMB26,354.3mn, while Wholesales operations increased by 5.4% to RMB5,202.2mn and
Concessionaire fee income decreased by 1.7% to RMB236.0mn

About the author

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Eric Li
Analyst
Research

李浩然先生(Eric Li) 高級分析師 現任現為輝立証券持牌高級分析師,曾任職股票基金、家族辦公室及證券公司等,擁有多年的證券研究部門從業及投資經驗,並先後於香港最暢銷的財經媒體撰寫投資專欄。畢業於香港理工大學電子計算系。 Eric is currently a licensed research analyst at Phillip Securities. Prior to joining Phillip Securities, he has years of equity research and investment experiences in asset management company, family office and securities company. Meanwhile, he has written investment columns in Hong Kong`s best-selling financial media for years. He holds Bachelor of Arts in Computing from The Hong Kong Polytechnic University.

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