Topsports INTL. (6110 HK) Profit in FY21 was in line with expectations, gradually recovered after the Xinjiang cotton incident June 16, 2021 289

PSR Recommendation: BUY Status: Upgraded
Target Price: HKDHKD15.34

Investment summary
Profits in FY21 are in line with expectations, and costs are under controlled
Topsports INT’L announced on May 24 the company’s annual results for the year ended
February 28, 2021. The company’s annual revenue was approximately CNY 36.01 billion, an
increase of 6.9% Yoy (2020: CNY 33.69 billion), which was slightly lower than our previous
expectation (previous expectation: CNY 37.37 billion), it was approximately 3.6% lower. The
company’s cost control during the period was adequate, and its OPM improved by 1.3 pcts
Yoy, offsetting the slower revenue growth. The adjusted net profit for the year was CNY 2.77
billion, an increase of 16.4%, which was in line with our expectations (previously expected:
CNY: 27.67) Billion). The company proposes to distribute 12 cents per share for the final period.
Together with the interim dividend, the dividend payout ratio is approximately 54% (excluding
special dividends). The annual dividend (including one special dividend) totals 64 cents per

About the author

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Timothy Chong

Timothy Chong received Bachelor’s Degree with first class honor in Banking and Finance from University of Leicester. He is currently studying Master of investment management in Hong Kong Polytechnic University. Before joining Phillip Securities, Timothy worked at BOCOM international and he is equipped with years of experience in the capital market. Timothy is now a licensed research analyst at Phillip Securities and covers Consumer / Property Management sectors.

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