Topsports (6110.HK) Narratives on Nike/Adidas; 1HFY27 Earnings Call Takeaways

Citi published a flash note on Topsports' (6110.HK) 1HFY27 earnings call, reiterating Buy with a HK$1.70 target price based on 11x CY2027E P/E, a 60% discount to Nike's historical trading P/E given lower earnings visibility after Nike's termination of most online distribution with China retailers from Jan 2027. On Nike: management is in close communication with Nike to manage the impact of its China distribution strategic pivot, jointly developing phased promotional and transition plans including inventory buybacks and promotional subsidies; Nike's intention to take back aged inventories from China retailers is unchanged. Topsports believes the foundation of the partnership is unchanged, with its retail operational efficiency and localized expertise essential to Nike's long-term China growth and offline channels remaining Nike's most critical ground for sales and consumer experience;