Core Viewpoint - The company 361 Degrees (01361) has announced a significant equity change involving its executive directors, aimed at establishing family trusts for succession and wealth management purposes [1][2]. Group 1: Equity Change Details - The equity change involves the establishment of family trusts by Mr. Ding Wuhao, Mr. Ding Huihuang, Mr. Ding Huirong, and Mr. Wang Jiabi, with the trusts named The DWH Trust, The DHH Trust, The DHR Trust, The WJB Trust, The DJT Trust, and The WJC Trust [1]. - Prior to the equity change, the aforementioned directors held approximately 65.60% of the shares in 361 Degrees through various investment companies [1][2]. - The trusts were established in the British Virgin Islands, with the trustees holding 100% ownership of the respective companies [1]. Group 2: Implications of the Equity Change - Following the equity change, the trustee's indirect equity interest in the companies increased from zero to approximately 65.60%, although the trustee does not have voting rights in the company [2]. - The directors remain as board members of their respective investment companies and can exercise voting rights through these companies [2]. - The company has sought a ruling from the executive officers regarding the equity change, confirming that it does not trigger a mandatory general offer under Rule 26.1 of the Takeovers Code [2].

Investment Rating - The report maintains a "Positive" outlook on the textile and apparel industry [2]. Core Insights - The textile and apparel sector outperformed the market, with the SW textile and apparel index rising by 1.6% from April 14-18, 2025, surpassing the SW All A index by 1.3 percentage points [6]. - Retail sales of clothing and textiles showed steady improvement, with a year-on-year growth of 3.4% in the first quarter of 2025, totaling 386.9 billion yuan [30]. - Textile exports rebounded significantly in March, with a year-on-year increase of 12.9%, driven by accelerated shipments of previously placed orders [10][37]. Summary by Sections Industry Performance - The SW textile and apparel index increased by 1.6%, outperforming the SW All A index by 1.3 percentage points during the specified period [6]. - The SW apparel and home textiles index rose by 1.4%, while the SW textile manufacturing index also increased by 1.6% [6]. Retail Sales - In March, clothing retail sales grew by 3.6% year-on-year, slightly up from 3.3% in January-February [13]. - The total retail sales of clothing, shoes, and textiles for the first three months reached 386.9 billion yuan, reflecting a 3.4% increase year-on-year [30]. Export Data - In the first quarter, China exported textiles and apparel worth 66.3 billion USD, a year-on-year increase of 0.6% [37]. - March saw textile and apparel exports amounting to 23.4 billion USD, marking a 12.9% year-on-year growth [37]. Cotton Prices - As of April 18, 2025, the national cotton price index was reported at 14,252 yuan per ton, with a weekly increase of 0.2% [40]. - The main contract for Zhengzhou cotton was priced at 12,885 yuan per ton, reflecting a 0.6% increase [40]. Market Trends - The report highlights the necessity for domestic demand to improve in 2025, especially in light of changing international trade dynamics [15]. - The focus on new outdoor activities, new business models, and supportive policies is emphasized as key growth areas [15]. Company Performance - 361 Degrees reported a 10-15% year-on-year growth in its main brand for the first quarter of 2025, with e-commerce sales increasing by 35-40% [28]. - Xtep International's main brand sales grew in the mid-single digits, with a significant increase of over 40% for the Saucony brand [28]. - The annual report for Baoshihua indicated a revenue of 5.15 billion yuan, down 1.9% year-on-year, with a net profit decline of 29.1% [28].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 5.67, compared to the current price of HKD 4.14 [7]. Core Insights - The company has shown strong sales performance in the first quarter, with the main brand's offline retail sales growing by 10%-15% year-on-year, and children's brand sales also increasing by 10%-15%. E-commerce sales recorded a robust growth of 35%-40% year-on-year [1]. - The company is expanding its superstore format, aiming to enhance the shopping experience by offering a wide range of products. In the first quarter, 10 superstores were opened, with plans to reach 50-100 by year-end [2]. - Product innovation is a focus, with several core products being upgraded and new models launched, including running shoes and basketball shoes featuring advanced technology [3]. - The impact of increased tariffs on overseas sales is limited, as overseas sales account for only 1.8% of total revenue, primarily managed by distributors [4]. - Revenue and profit forecasts for FY25 are maintained at RMB 11.87 billion and RMB 1.33 billion, respectively, reflecting year-on-year growth of 17.8% and 16.0% [5]. Summary by Sections Sales Performance - The first quarter saw a continuation of high growth in sales, with offline retail and e-commerce both performing strongly [1][2]. Store Expansion - The company is actively expanding its superstore format, with a goal of enhancing customer experience and increasing product variety [2]. Product Development - The company is focusing on technological innovation in its product offerings, with several new and upgraded products launched in the first quarter [3]. Tariff Impact - The company is well-positioned to mitigate the effects of increased tariffs due to its limited exposure to overseas sales [4]. Financial Projections - The financial outlook remains positive, with steady growth expected in revenue and net profit for the upcoming fiscal year [5].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative return of over 20% within the next six months [6]. Core Insights - The company has introduced a new retail format called "Super Brand Store," which features an 800 square meter shopping space, high-quality products, and a scene-based shopping experience, aiming to create a new model for sports retail [2]. - In Q1 2025, the main brand's offline revenue is expected to grow by 10%-15%, while the children's clothing segment is also projected to see a similar increase. Online revenue is anticipated to grow by 35%-40% [1][5]. - The company continues to innovate its product lineup, with new releases in the running and basketball categories, enhancing performance and design, which has garnered industry recognition [3][4]. Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are estimated at 11.3 billion RMB, 12.8 billion RMB, and 14.5 billion RMB, respectively. Net profits are projected to be 1.3 billion RMB, 1.4 billion RMB, and 1.6 billion RMB for the same years [5]. - The expected earnings per share (EPS) for 2025, 2026, and 2027 are 0.61 RMB, 0.69 RMB, and 0.79 RMB, with corresponding price-to-earnings (PE) ratios of 6x, 6x, and 5x [5].

Investment Rating - The investment rating for the company is "Buy" [8][26]. Core Insights - The company reported strong retail performance in Q1 2025, with main brand offline sales growth of 10-15%, children's clothing offline sales growth of 10-15%, and e-commerce sales growth of 35-40%, reflecting a robust market presence [6][8]. - The company is actively innovating its store formats, launching the "Super Product Store" concept, with plans to expand from 10 to 50-100 stores by 2025, enhancing customer shopping experience [8]. - The company maintains a healthy inventory turnover ratio of 4.5-5 times, with a stable discount rate of around 30% in Q1 2025, indicating effective inventory management [8]. Financial Data and Profit Forecast - Revenue projections for FY2023 to FY2027 are as follows: - FY2023: 84.23 billion RMB - FY2024: 100.7 billion RMB (20% YoY growth) - FY2025E: 113.0 billion RMB (12% YoY growth) - FY2026E: 123.8 billion RMB (10% YoY growth) - FY2027E: 134.5 billion RMB (9% YoY growth) [7][17]. - Net profit forecasts for the same period are: - FY2023: 9.6 billion RMB - FY2024: 11.5 billion RMB (20% YoY growth) - FY2025E: 13.0 billion RMB (13% YoY growth) - FY2026E: 14.5 billion RMB (12% YoY growth) - FY2027E: 15.8 billion RMB (9% YoY growth) [7][17]. - The company’s gross margin is projected to improve slightly from 41.1% in FY2023 to 41.9% in FY2027 [7][17]. Market Position and Strategy - The company has over 700 sales points in Europe and North America, with a focus on Southeast Asia and Belt and Road countries for future expansion, indicating a strategic approach to international markets [8]. - The management expresses confidence in achieving a sales growth of 10-15% in 2025, primarily driven by volume growth [8].

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [2][5][9] Core Views - In the first quarter of 2025, the company's main brand recorded a 10-15% growth in offline retail sales, while the children's clothing brand also saw a 10-15% increase. The e-commerce platform experienced a growth of 35-40% [3][4][6] - The company has successfully expanded its "super premium" stores to 10 locations, with a stable inventory-to-sales ratio of 4.5-5.0 and retail discounts around 30% [4][7] - The company is optimistic about its brand momentum, with a focus on launching competitive new products in the running and basketball shoe categories, and a brand revitalization plan showing initial positive results [5][9] Summary by Sections Retail Performance - The first quarter of 2025 saw a 10-15% growth in offline sales for both adult and children's clothing, with e-commerce growth at 35-40%, indicating a strong performance [3][4][6] Product Development - The company continues to innovate with monthly new product launches in core categories, including running shoes and basketball shoes, which have gained market attention [7][9] Channel Expansion - The expansion of "super premium" stores has reached 10 locations, with each store covering over 800 square meters and offering around 700 SKUs [7][9] Financial Forecast - The company maintains its profit forecast, expecting net profits of 1.3 billion, 1.46 billion, and 1.63 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 13.1%, 12.2%, and 11.8% [5][10]

Group 1 - The core viewpoint of the report maintains the EPS forecast for 361 Degrees at 0.64/0.72 HKD for 2025/26, with a target price of 5.62 HKD, corresponding to 8 times the 2025 P/E ratio [1] - The main brand's offline retail sales grew by 10-15% year-on-year in Q1 2025, while the children's clothing line also saw a similar growth rate [2] - The company's e-commerce platform retail sales increased by 35-40% year-on-year in Q1 2025, compared to a 20-25% growth in Q1 2024 [3] Group 2 - The company is actively exploring new channel forms, focusing on improving terminal store operational efficiency and expanding super stores of 800 square meters or more [2] - The company maintains a healthy discount level of approximately 30% for offline retail, which is consistent with the previous year [2] - The company has 1,365 overseas retail points, primarily in Europe, North America, Southeast Asia, and Belt and Road regions, with a low contribution to overall revenue [4] Group 3 - The company emphasizes differentiated operations between online and offline channels, leveraging the advantages of exclusive products, with 84% of sales in 2024 expected to come from exclusive items [3] - The management plans to focus on developing markets in Southeast Asia and Belt and Road regions, which align closely with Chinese cultural and aesthetic values [4]

Core Insights - The report emphasizes the recovery of credit demand in March, indicating a potential stabilization in the economy, although the impact of exports has yet to be fully realized [5] - The report suggests that monetary easing remains essential for sustaining domestic demand, with interest rates expected to trend downward [5] - The semiconductor industry is poised for growth due to stricter origin rules, which may favor domestic chip manufacturers [7] Macroeconomic Overview - In Q1, exports increased by 5.8% year-on-year, with March showing a significant 12.4% rise, attributed to a low base effect and resilient external demand [3] - Imports, however, fell by 7% year-on-year, primarily due to declining commodity prices and weak domestic demand [3] - The overall tariff rate imposed by the U.S. on Chinese goods is approximately 105.6%, which could negatively impact China's exports by 8.5-10.7 percentage points [3] Fixed Income Analysis - The report notes a gradual recovery in the yield curve, with R007 dropping to 1.7%, the lowest since January 10, indicating a more accommodative stance from the central bank [5] - The report highlights that the spread between deposit certificates and funding costs has turned positive, suggesting further declines in deposit rates [5] Industry Insights Textile and Apparel - 361 Degrees reported a strong performance in Q1 2025, with adult apparel sales increasing by 10-15% and e-commerce sales growing by 35-40% [8] - The company is expected to maintain a robust growth trajectory, with projected net profits of 1.31 billion, 1.49 billion, and 1.66 billion yuan for 2025-2027 [8] Healthcare - Kaili Medical's revenue for 2024 was 2.014 billion yuan, down 5.02% year-on-year, with a significant drop in net profit due to industry restructuring and increased competition [9] - The company is focusing on high-end product development, with expectations of revenue growth of 20.7%, 19.6%, and 19.7% for 2025-2027 [10] Social Services - China Youth Travel Service is projected to achieve revenues of 10.6 billion, 11.3 billion, and 12 billion yuan from 2025 to 2027, benefiting from the recovery in outbound tourism [13] Consumer Electronics - Edifier reported a revenue increase of 9.27% year-on-year for 2024, with a focus on brand building and new product investments [14] - The company anticipates revenues of 3.40 billion, 3.96 billion, and 4.63 billion yuan for 2025-2027 [16] Home Appliances - Ninebot's two-wheeler business continues to grow, with a 76.6% increase in sales volume, while its robotics segment saw a 323.5% increase in sales [18] - The company expects net profits of 1.63 billion, 2.24 billion, and 2.89 billion yuan for 2025-2027, driven by growth in both segments [18]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company reported a retail revenue growth of 10%-15% for its main brand and children's clothing in Q1 2025, with e-commerce revenue growth of approximately 35%-40% [2][3] - The company is benefiting from a high cost-performance positioning that aligns with current consumer trends, and there is still room for store openings and expansion [3] - The company has successfully launched new products in various categories, including running and basketball shoes, which have received positive market attention [4][5] - The company is expanding its market presence with new store formats and international locations, including the opening of its first overseas store in Malaysia [6] Summary by Sections Event Overview - The company announced Q1 2025 operational data showing significant growth in retail revenue across its main brand, children's clothing, and e-commerce platforms [2] Analysis and Judgments - The company has seen improved revenue growth rates in both offline and online channels compared to previous quarters, driven by effective marketing strategies and product launches [3] - The company is focusing on product innovation in the professional sports sector, enhancing its offerings in running and basketball categories [4] - The company is actively participating in sports events and sponsorships to strengthen its brand presence [5] Investment Recommendations - The company is expected to benefit from the current consumer downgrade trend, with strong sales performance in running shoes and basketball shoes [7] - The company has room for store expansion and is likely to see continued online revenue growth, contributing positively to its overall performance [8] - Revenue forecasts for 2025, 2026, and 2027 are projected at 11.62 billion, 13.35 billion, and 15.32 billion respectively, with net profits of 1.39 billion, 1.63 billion, and 1.87 billion [8]

Group 1 - The 2025 season of "Touch the Ground and Ignite" basketball event officially kicked off in Wuhan, marking a significant milestone in grassroots basketball in China, providing a platform for thousands of basketball enthusiasts [1][2] - The new season emphasizes "competitive upgrade and professional empowerment," enhancing the event's professionalism, competitiveness, and viewing experience [1][5] - The event attracted 24 grassroots teams and 4 invited guest teams, including well-known basketball brands, enriching the competitive landscape [2] Group 2 - The "1980s" team, led by Meng Bolong, won the championship at the Wuhan station of the 2025 season, securing a ticket to the national championship [4] - The victory highlighted the importance of player performance, teamwork, physical conditioning, and tactical resilience, showcasing the upgraded competition format's demands [4][7] - The new season's format includes a reduction in the number of teams advancing from city preliminaries, an increase in match duration, and a shift to pure game time, enhancing the competitive intensity and player performance [6][7] Group 3 - The "Touch the Ground and Ignite" event has evolved into a key player in the grassroots basketball ecosystem, providing a platform for players from diverse backgrounds to showcase their talents and progress [8] - Success stories from participants illustrate the event's role in empowering grassroots players and facilitating their growth within the basketball community [8] - The event's strategy includes innovative venue selection, moving from traditional courts to commercial complexes, creating a closed loop of "viewing-experience-consumption" for enhanced brand and commercial value [9][10]