Top Win International: This Isn’t About Luxury Watches Anymore

Summary Top Win International pivoted from a struggling luxury watch business to focus on digital assets, Bitcoin treasury, and Web3 investments. The company’s traditional watch segment is in decline, with low margins, weak cash flow, and little relevance to the current investment thesis. Valuation now hinges on Bitcoin accumulation and strategic stakes in digital asset firms, but assumptions are speculative and details remain unclear. Given limited disclosure and a bullish scenario already priced in, I rate Top Win International as ‘Hold’ due to high-risk and uncertain upside. About fourteen years ago, in the bustling district of Wan Chai, Hong Kong, Top Win International ( SORA ) came to life. It started out as an operating arm of Pride River Limited, focused on reselling stylish luxury watches to a global B2B crowd (think distributors, independent dealers, and retailers). The brands are the most varied—if you are a watch guy (definitely not my thing), you will most likely recognize most of them: Omega, Cartier, Rolex, Longines, Audemars Piguet, Patek Philippe, Blancpain, Casio, Breguet, and Hublot. Top Win website But if you think this story is just about watches, think again. In May of this year, the company made a major pivot —diving head first into the world of digital assets and Web3. They even changed their ticker to SORA and brought in Jason Fang, the founder of Sora Ventures, as co-CEO to help steer this new direction. On top of that, they made two key strategic moves to kick off this new chapter : Strategic investment in HK Asia Holdings since May of this year. Before Top Win invested in this company, its shares soared due to the integration of Bitcoin into its corporate treasury in February. Their idea is to protect shareholders’ capital by avoiding fiat currencies and leveraging blockchain technology to their advantage. Importantly, the company has a Bitcoin balance of 28.88 (approximately $3.39 million) at an average cost of $87 (they have already had 34% unrealized profit); Top Win also made another investment in Metaplanet ( MTPLF ), a Japanese company leading the corporate adoption of Bitcoin. They hold a whopping 15,555 Bitcoins (valued at $1.83 billion) and aim to reach 21,000 by 2026. The Near Irrelevance of Watches for Top Win If you took a look at their watch division today, you’d probably see a struggling—maybe even downright weak—business. First of all, revenue peaked in FY 2023 ($18.8 million), falling more than 6% year-over-year to $17.6 million in FY 2024. A weak sign for a company that recently went public. Second point: extremely tight margins. We know the resale business is tough, but in Top Win’s case, gross margin is 7 to 8%, almost reaching 9% in the best years. Now, imagine that more than half of that goes to SG&A expenses. The result? An EBIT margin that peaked at just 2.8% in FY 2023, falling again to 1.3% in FY 2024. Then come the interest expenses. In two of the last three years I looked at (FY 2022 and FY 2024), interest on debt completely wiped out EBIT—leaving net income either flat or in the red. Third, and no less important, Top Win International only reported a positive OCF in FY 2023, needing to offset deficits by issuing debt. It’s clear that all of this is irrelevant to the thesis. We’re facing a pre-pivot case: all that matters here is Bitcoin. Putting on the Speculative Hat It’s clear that Top Win International’s business is fragmented, extremely speculative, and therefore extremely difficult to model. For our SOTP model, we can break down Top Win’s model as follows: Traditional watch business (here we already know its characteristics: declining, very low margins and irrelevant cash generator); Bitcoin Treasury (as I said before, Top Win intends to start a business model similar to HK Holdings and Metaplanet, and the first step to do so is to accumulate Bitcoin. Let’s make some assumptions about both the amount of Bitcoin they will hold and the price); Strategic holdings. Let’s start with the watch business—perhaps the easiest to model. I don’t think anyone is looking at it at this point. Using a P/S of 0.2x to 0.3x for it. Since I project $17 million in revenue for FY 2025, we can assume a valuation of $3.5 to $5 million. Note that if the thesis revolved around watches, the shares would be trading at pennies. Of course, if you assumed a 1x multiple, it wouldn’t make much of a difference in the end. Moving on to the much-talked-about Bitcoin Treasury, we can imagine three scenarios: They will accumulate 250 BTC by FY 2025 . This would be a timid entry, but it’s a start; They will accumulate 1,000 BTC by FY 2025 . Solid entry, in line with other small-caps in the sector; They will accumulate 3,000 BTC by FY 2025 . A very strong entry, but not very credible. For the BTC price, we can simplify by using $150,000 as the target. I’ll also model it based on a 1.5x NAV multiple (which seems appropriate for companies of this caliber). 250 BTC : Nominal value of $37.5 million. Market value at a 1.5x multiple would be around $73.1 million; 1,000 BTC : Nominal value of $150 million. Market value at a 1.5x multiple would be around $225 million; 3,000 BTC : Nominal value of $450 million. Market value at a 1.5x multiple would be around $675 million. In my opinion, the most likely scenario here is the bottom end. Even so, if it does, it will still be in the Top 60 public companies with the largest Bitcoin treasuries! Let’s take it slow. BitcoinTreasuries.Net Last but not least, let’s talk about the Top Win investments made in May. This part’s a bit tricky, since they didn’t disclose how big their stake is. So, I’m going to assume they started small—after all, we’re talking about a pretty small player in a very specific niche. Given that Metaplanet is the largest of these companies with a market cap of over $7 billion, let’s assume a small stake of 0.05% ($35 million), plus another stake in HK Asia, totaling $50 to $70 million. Adding this all up and accounting for the $6 million in net cash, in the most likely scenario, we have: $5 million + $73 million + $50 million = $136 million. Dividing by the number of shares (22.2 million), we would find a price target of approximately $6.10, slightly below where the stock is trading today. Beware of Headwinds To reach a price target of $6, we would have to have: Bitcoin rising another 28% by next year (BTC is almost $117,000); A treasury of at least 250 BTC, reaching the Top 60 in the amount of Bitcoin in treasury for public companies; A stake of at least $50 million in the invested companies. But what if other variables come into play? First, let’s assume Bitcoin is priced at $100,000 for FY 2026. This would give us a nominal value of $25 million and a market value of $37.5 million based on a NAV of 1.5x. In this case, holding the other assumptions steady, we would have a price target of approximately $4. We also have to consider the possibility that we’re valuing these equity stakes a bit too generously. If the invested companies are worth less than $50 million, then the fair value—and ultimately the price target—will likely come in lower as well. A Very Risky Play Right Now I think you get the idea: Top Win International is a very, very risky play that could even generate decent returns based on a very bullish scenario (strong BTC, holdings above $50 to $70 million). However, I believe the base case is already priced in here (BTC at $150,000 by 2026 and holdings at $50 to $70 million). Bitcoin USD (Seeking Alpha) As the chart clearly shows, that massive 400% rally back in May was fueled by the announcement of the pivot into the digital assets space. So, at least for now, it’s unlikely we’ll see another spike of that magnitude anytime soon. Top Win International stock (Seeking Alpha) With just about 12% downside based on my estimates, I’m slapping a ‘Hold’ rating to Top Win International. We simply don’t have enough details yet—like the size of their equity stakes or how much BTC they actually plan to hold—to model this accurately. And from where the stock is trading now, it looks like the market is leaning more toward optimism than caution.

Source: Seeking Alpha