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Topsports International Holdings Limited (6110.HK) reported FY22 results on May 30, 2023, missing both revenue and profit expectations. The company recorded RMB31.9 billion in revenue (YoY -11%) and RMB2.4 billion in net profit (YoY -12%), both below expectations by 6% and 12%, respectively. In 2HFY22, Topsports' revenue decreased to RMB16.3 billion (YoY -19%) and net profit dropped to RMB1.0 billion (YoY -30%), compared to the 4Q22 results. Despite a narrower YoY decline in 2HFY22 compared to 2Q22, the company attributed the drop to holiday shopping. The gross profit margin (GPM) remained stable at 43.4% (YoY +2.6ppt), while the operating profit margin (OPM) decreased to 10.8% (YoY -0.3ppt). The company raised discount rates to boost sales, particularly in the online channel, according to management. The market sentiment remains cautious, with CDS Spread Monitor - USD SR 5Y currently at 83bp, which is above the 5D special dividend paid to shareholders. The company declared a CNY0.23 special dividend, resulting in a dividend yield of 9%.