Daily focus：Topsports (6110)
Retail sales from September to November recorded a high single-digit year-on-year decline, but the decline narrowed significantly compared to the first half of the year. This reflects that against the backdrop of store contraction and weak demand, the company is gradually stabilizing its overall operating performance by optimizing its store structure and increasing its online presence. Inventory balance has decreased year-on-year, and the slower pace of store closures is conducive to the future recovery of gross profit margin and sales per square meter. However, December sales "significantly" deteriorated due to weak industry demand, a mild winter, and the postponement of the Lunar New Year, putting pressure on short-term profit expectations. The key in the medium term lies in Nike's strategic adjustment and in-depth cooperation with Topsports: the brand is increasing wholesale discounts, accelerating the recycling of old goods, and extending payment terms. Combined with tightening online self-operated discounts in China and increasing offline investment, this is expected to drive improvements in Topsports' gross profit margin, inventory structure, and cash flow. However, the company still needs to pay attention to industry demand fluctuations and brand competition risks.
Federal Reserve Officials Show Growing Divergence
The most striking aspect of the latest Federal Reserve minutes was not the interest rate cut itself, but rather the extremely rare and intense division within the policymaking body. Although the final decision was to cut rates by 0.25%, the vote was an unusual 9-3, setting a record for the most dissenting votes in recent years, revealing a severe divide among officials regarding the economic outlook. Three distinct camps emerged: two hawkish officials, concerned about persistent inflation, insisted on "holding rates steady"; one dovish official, viewing the deteriorating employment situation as urgent, strongly demanded a "large 0.5% rate cut." This "three-way struggle" reflects a loss of consensus within the Fed on balancing inflation and employment risks. Officials have become more cautious about the pace of rate cuts in 2026, with the median forecast indicating only one more rate cut next year, and seven officials even predicting no rate cuts in 2026, reflecting uncertainty.
On Tuesday, Hong Kong stocks saw a net outflow of HK$3.84 billion through the Stock Connect program. SMIC (981) saw the largest net inflow at HK$760 million, followed by CNOOC (883). The Tracker Fund of Hong Kong (2800) saw the largest net outflow at HK$1.61 billion, followed by Tencent Holdings (700).
The HSI opened 1 point higher and then extended its gains, closing up 219 points or 0.9% at 25,854; the HSCEI rose 99 points or 1.1% to 8,991; and the HSTECH gained 95 points or 1.7% to 5,578. Total market turnover was HK$199.8bn. Market anticipation of the Kunlun chip concept under Baidu boosted Baidu (9888) shares by 8.9%. Robotics concept stocks generally rose, with Johnson Electric (0179) up 4.7% and Lens Technology (6613) up 5.1%. DOBOT (2432) proposed its IPO on the Shenzhen Stock Exchange, and its share price rose 13.5%. UBTECH (9880), a peer company, announced that its chairman would not reduce his shareholding within one year, and its share price rose 8.3%.
Source: KGI Investment Products and Solutions Department
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