Investment Rating - The report maintains a "Buy" rating for the company 361 Degrees [2][7] Core Views - The company achieved strong revenue growth in 2023, with total revenue reaching 8.42 billion RMB, a year-on-year increase of 21.0%, and net profit of 0.96 billion RMB, up 28.7% year-on-year [3][4] - The e-commerce segment showed remarkable growth, with revenue from online sales amounting to 2.33 billion RMB, representing a 38% increase year-on-year [4] - The company is expected to continue its growth trajectory, with projected revenues of 9.92 billion RMB, 11.47 billion RMB, and 13.02 billion RMB for 2024, 2025, and 2026 respectively, reflecting growth rates of 17.7%, 15.5%, and 13.5% [7][8] Summary by Sections Financial Performance - In 2023, the company reported a net profit margin of 11.4%, an increase of 0.7 percentage points from the previous year, and a gross profit margin of 41.1%, up 0.6 percentage points year-on-year [3][4] - Revenue breakdown by category shows footwear sales of 3.51 billion RMB (up 23.0%), apparel sales of 2.69 billion RMB (up 9.8%), and children's products sales of 1.96 billion RMB (up 35.7%) [4] Business Segmentation - The company’s e-commerce business accounted for 27.6% of total revenue, while offline sales made up 72.4% [4] - The company expanded its store network, with a total of 5,734 stores in mainland China by the end of 2023, an increase of 254 stores year-on-year [4][7] Future Outlook - The report anticipates continued growth in the company's product lines and market presence, particularly in the children's apparel segment [4][7] - The projected earnings per share (EPS) for 2024, 2025, and 2026 are expected to be 0.55 RMB, 0.65 RMB, and 0.75 RMB respectively, with a corresponding price-to-earnings (P/E) ratio of 7.5, 6.4, and 5.6 [8]

Investment Rating - The report maintains a "Buy-B" rating for the company, indicating a positive outlook for its stock performance [4][8]. Core Insights - The company achieved a revenue of 8.423 billion yuan in 2023, representing a year-on-year growth of 21.0%, with a net profit of 961 million yuan, up 28.7% from the previous year [5][8]. - The company focuses on the mass sports market with a brand positioning of "professional, youthful, and international," which has contributed to its strong revenue growth and stable profit levels [8]. - The company has seen significant growth in its e-commerce channel, which generated 2.326 billion yuan in revenue, a 38.0% increase year-on-year, and accounted for 27.6% of total revenue [2][8]. Revenue Breakdown - E-commerce Channel: Revenue of 2.326 billion yuan, up 38.0% year-on-year, with a consistent growth rate of over 30% across all four quarters of 2023 [2]. - Domestic Offline Stores: Revenue of 5.912 billion yuan, a year-on-year increase of 14.8%, with a net addition of 254 stores, bringing the total to 5,734 [2][3]. - Overseas Market: Revenue of 185 million yuan, a 50.1% increase year-on-year, representing 2.2% of total revenue, with 1,260 sales outlets established by the end of 2023 [2]. Profitability and Financial Metrics - The company's gross margin improved by 0.6 percentage points to 41.1% in 2023, with a net profit margin of 11.4% [7][8]. - The operating profit margin increased by 1.0 percentage points to 16.4%, reflecting effective cost management and improved product mix [7]. - The company plans to distribute a total dividend of 20.4 Hong Kong cents per share for 2023, resulting in a payout ratio of 40.2% [5][8]. Future Projections - Revenue forecasts for 2024-2026 are 10.040 billion, 11.628 billion, and 13.370 billion yuan, with expected growth rates of 19.2%, 15.8%, and 15.0% respectively [8]. - Projected net profits for the same period are 1.152 billion, 1.348 billion, and 1.548 billion yuan, with growth rates of 19.9%, 17.0%, and 14.9% respectively [8].

Investment Rating - The report maintains a "Buy" rating for the company with a current price of HKD 4.58 [1]. Core Insights - The company achieved impressive performance in 2023, with revenue and net profit increasing by 21% and 29% year-on-year, respectively [4][9]. - The company is expected to continue its focus on the mass market and maintain steady growth, benefiting from upcoming major sports events [8][9]. Financial Performance - In 2023, the company reported total revenue of RMB 8.423 billion and a net profit attributable to shareholders of RMB 961 million, with an EPS of RMB 0.47 [4]. - The gross margin improved by 0.6 percentage points to 41.1%, while the operating margin increased by 1.0 percentage points to 16.4% [4][5]. - The company plans to distribute a final cash dividend of HKD 0.139 per share, resulting in an annual payout ratio of 40.2% [4]. Revenue Breakdown - Revenue from adult products, children's clothing, and other categories accounted for 75%, 23%, and 2% of total revenue, respectively, with year-on-year growth rates of 17.4%, 35.7%, and 8.0% [5]. - Online sales grew by 38% year-on-year, while offline sales increased by 15.6% [5][8]. Market Strategy - The company is enhancing its product matrix and brand positioning, focusing on professional sports and youth demographics [8]. - It has launched new products and increased marketing efforts, including sponsorship of major events like the Hangzhou Asian Games [8][9]. Future Outlook - The company has raised its profit forecasts for 2024 and 2025, expecting net profits to increase by 7% and 6%, respectively [9]. - The projected EPS for 2024, 2025, and 2026 are RMB 0.55, RMB 0.64, and RMB 0.72, with corresponding P/E ratios of 8x and 7x for 2024 and 2025 [9].

Investment Rating - The investment rating for the company is "Buy" [1][4][10] Core Views - The company reported a net profit growth of 29% in 2023, with a full-year dividend payout ratio of 40% [1] - Revenue increased by 21% to 8.423 billion yuan, driven by e-commerce and children's clothing [1] - The company is the fourth largest domestic sports brand, with adult and children's clothing revenues growing by 17% and 36% respectively [1] - The international business saw a 50% year-on-year increase, reaching 190 million yuan [1] - The company maintains a healthy operating condition with a low debt-to-asset ratio of 25.6% [1] - The second half of 2023 showed accelerated growth, with revenue and net profit increasing by 24% and 32% year-on-year respectively [1] - The company actively opened new stores, with 254 adult and 257 children's clothing stores added in 2023 [1] - E-commerce sales grew by 38% to 2.33 billion yuan, accounting for 27.6% of total revenue [1] Financial Performance Summary - For 2023, the company achieved a revenue of 8.423 billion yuan, a 21% increase from 2022 [2][9] - The net profit for 2023 was 961 million yuan, reflecting a 28.7% increase year-on-year [2][9] - Earnings per share (EPS) for 2023 was 0.46 yuan, with a net profit margin of 17.7% [2][9] - The return on equity (ROE) improved to 10.6% in 2023 [2][9] - The company expects net profits of 1.135 billion yuan, 1.321 billion yuan, and 1.527 billion yuan for 2024, 2025, and 2026 respectively, with growth rates of 18.0%, 16.4%, and 15.6% [1][9][11]

证券研究报告 | 年报点评报告 2024年03月14日 361 度（01361.HK） 渠道优化，产品升级，期待 24 年持续快速增长 2023年营收/业绩同比增长21%/29%，表现优异，符合预期。公司发布2023 买入（维持） 年年报，期内营收同比+21.0%至84.2亿元，加盟商拿货和补货需求旺盛，毛利 股票信息 率同比+0.6pcts至41.1%，销售费用率同比+1.5pcts至22.1%，管理费用率同比 -0.3pcts至7.5%，期内公司贸易应收款项预期信贷拨回约4500万元（同期为计 行业 鞋类 提拨备约1.7亿元），综上归母净利润同比+28.7%至9.6亿元，归母净利率同比 前次评级 买入 +0.7pcts 至 11.4%，整体表现优异，符合预期。同时公司派发末期股息约 13.9 3月13日收盘价(港元) 4.58 港仙/股，全年共派发股息20.4港仙/股，派息比率40.2%。 总市值(百万港元) 9,469.98 361度成人业务：线下渠道拓店持续+面积扩张，产品端专业品类功能性持续提 总股本(百万股) 2,067.68 升，多因素合力助推增长。2023全年成人营收同比增长17%至63.3亿 ...

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company reported a revenue of HKD 84.2 billion for 2023, representing a year-on-year increase of 21%, and a net profit of HKD 9.6 billion, up 28.7% year-on-year [2] - The adult apparel segment showed strong sales performance, while the children's apparel segment exhibited robust growth [2][3] - The company has optimized its offline channels and differentiated its products to support e-commerce growth [3] - The company's profitability continues to improve, with a healthy inventory level [3] - Future profit projections indicate net profits of HKD 11.51 billion, HKD 13.54 billion, and HKD 15.64 billion for 2024, 2025, and 2026, respectively, with growth rates of 19.7%, 17.6%, and 15.5% [3] Summary by Sections Financial Performance - For 2023, the company achieved a revenue of HKD 84.2 billion, a 21% increase year-on-year, and a net profit of HKD 9.6 billion, reflecting a 28.7% increase [2] - In the second half of 2023, revenue reached HKD 41.1 billion, up 24.3% year-on-year, with a net profit of HKD 2.6 billion, increasing by 31.5% [2] - The company declared a year-end dividend of HKD 0.204 per share, with a payout ratio of 40.2% [2] Business Segments - Revenue from adult apparel was HKD 63.3 billion, up 17.4%, while children's apparel revenue was HKD 19.6 billion, up 35.7% [2] - The adult segment's shoe and clothing sales increased by 19% and 9%, respectively, while children's apparel saw a 31% increase in sales volume [2] Channel Optimization - As of the end of 2023, the company had 6,994 sales outlets globally, with 5,734 in mainland China, marking an increase of 254 outlets [3] - E-commerce revenue for 2023 was HKD 23.3 billion, a 38% increase year-on-year, accounting for 27.6% of total business [3] Profitability and Inventory - The gross margin for 2023 was 41.1%, with adult apparel gross margin at 41.4% and children's apparel gross margin at 41.8% [3] - The company reported an inventory amount of HKD 1.35 billion, a 14.2% increase year-on-year, with 92.9% of inventory being finished goods [3] Future Outlook - The company is expected to continue enhancing its product strength and operational efficiency, with a positive outlook for children's apparel as a growth driver [3] - The current stock price corresponds to an 8x PE ratio for 2024, supporting the "Buy" rating [3]

M N 14 Mar 2024 CMB International Global Markets | Equity Research | Company Update 361 Degrees (1361 HK) Resilient outlook backed by rising popularity Target Price HK$6.25 361 Degrees’s FY23 result was roughly inline but we are delighted to see its dividend payout ratio resumed to 40%. Going forward in FY24E, we are still (Previous TP HK$6.23) confident, thanks to: 1) its wholesale business nature (supported by 80%+ sell Up/Downside 36.6% through rate), 2) resilient retail sales growth (20%+ in Jan-Feb 202 ...

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 6.12 HKD, compared to the last closing price of 4.34 HKD [1][3]. Core Insights - The company's performance in 2023 exceeded expectations, with revenue reaching 8.423 billion HKD, a year-on-year increase of 21.0%, and a net profit of 961 million HKD, up 28.7% year-on-year. The dividend payout ratio was 40.2%, with a dividend of 0.204 HKD per share, slightly above expectations [1][3]. - The growth in children's clothing was particularly strong, with revenue from adult and children's clothing increasing by 17.4% and 35.7% respectively, reaching 6.33 billion HKD and 1.96 billion HKD [1][3]. - The company is expected to achieve revenue exceeding 10 billion HKD in 2024, with a projected growth rate of 15%-20% for the year [3][4]. Summary by Sections Financial Performance - In 2023, the company reported a revenue of 8.423 billion HKD, a 21% increase year-on-year, and a net profit of 961 million HKD, reflecting a 29% increase [4]. - The diluted earnings per share for 2024, 2025, and 2026 are projected to be 0.46, 0.56, and 0.65 HKD respectively, with corresponding price-to-earnings ratios of 9.1, 7.5, and 6.5 [4]. Market Position and Strategy - The company has been focusing on enhancing its core product offerings and optimizing its distribution channels, which has led to a significant increase in market share within the domestic sportswear industry [3][4]. - The report highlights the company's strategic initiatives in e-commerce and the expansion of its children's clothing line as key drivers for future growth [3][4]. Future Outlook - The company anticipates a strong start to 2024, with expectations of double-digit growth in sales driven by successful product launches and marketing strategies [3][4]. - The report projects net profits for 2024, 2025, and 2026 to be 1.162 billion HKD, 1.348 billion HKD, and 1.556 billion HKD respectively, indicating a positive growth trajectory [4].

Financial Performance - Revenue increased by 21.0% to RMB 8.42 billion[23] - Profit attributable to equity holders rose by 28.7% to RMB 960 million[23] - The company's revenue for the fiscal year 2023 reached RMB 8,423.3 million, representing a year-on-year growth of 21.0%[41] - Profit attributable to equity holders increased to RMB 961.4 million, up 28.7% compared to the previous year[41] - The gross profit margin improved to 41.1%, compared to 40.5% in 2022[35] - The operating profit margin also increased to 16.4%, up from 15.4% in the prior year[35] - The company proposed a final dividend of HKD 0.139 per share, equivalent to RMB 0.127, with a payout ratio of 40.2%[41] Business Expansion and Market Strategy - The company aims for market expansion through collaborations with well-known IPs and international sports stars[14] - The company aims to leverage the opportunities presented by the 2024 Olympic year to enhance its brand and product offerings, focusing on innovation and consumer engagement[50] - The company is focused on integrating online and offline channels to enhance retail performance and optimize operational efficiency[49] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[91] - The company is exploring partnerships with local brands to enhance its product offerings and reach[91] Product Development and Innovation - The company has launched new products in the competitive running segment, including professional carbon plate running shoes[14] - The company is committed to deepening research and innovation to strengthen its professional sports product offerings and enhance brand image[50] - The company continues to innovate in product technology, enhancing its competitive edge in the market[104] - The company launched the "Trajectory 4.0" and "Trajectory 5.0" series, which quickly sold out upon release, indicating strong consumer demand for new products[67] - The children's sportswear segment is experiencing rapid growth, with 361º Children's sales outlets increasing to 2,545, a net increase of 257 compared to the end of 2022[47] E-commerce and Online Sales - E-commerce business revenue grew by 38.0% to RMB 2.33 billion[23] - E-commerce sales revenue grew by 38.0% year-on-year to RMB 2,325.5 million, accounting for approximately 27.6% of total revenue[114] - During the "618" shopping festival, 361º e-commerce channels achieved a cumulative sales increase of approximately 43%[103] - The company aims to enhance brand image and sales through e-commerce platforms like Tmall and JD, while also leveraging data analytics for product development[102][104] Brand Positioning and Marketing - 361º has positioned itself as a "youth sports expert" with its children's brand, emphasizing professional functionality and health technology[6] - The company aims to enhance brand value and influence while promoting the spirit of "more love" globally[56] - The company has signed prominent athletes as brand ambassadors, including Chinese women's football player Li Mengwen and basketball player Li Yuan, to strengthen its presence in various sports[44] - The company has been recognized with multiple awards, including the Best Investor Relations Company in Hong Kong[18] Operational Efficiency and Cost Management - The debt ratio decreased to 2.2%, down from 2.4% in 2022[35] - Inventory turnover days improved to 93 days, compared to 91 days in the previous year[35] - The average wholesale price of footwear and apparel rose by 3.0% and 0.5% year-on-year, respectively, due to price adjustments and the introduction of higher-priced new products[112] - The company plans to continue diversifying its supply chain to control production costs more effectively[118] Corporate Governance and Social Responsibility - The company has complied with all relevant environmental laws and regulations, ensuring no significant waste or pollution was produced during the year[156] - Charitable donations made by the group during the year amounted to RMB 13,731,000, a decrease from RMB 14,261,000 in 2022[166] - The group has maintained good relationships with employees, suppliers, distributors, and authorized retailers throughout the year[158][159][160][161] Future Outlook - The group is optimistic about the development of the Chinese sports industry in 2024, driven by major international and domestic sports events, including the Paris Olympics[145] - The group plans to strengthen its online and offline sales channels to meet changing consumer shopping demands and experiences[145] - The group will increase investments in e-commerce to create differentiated online brand advantages while expanding and upgrading offline stores[145]

Investment Rating - The report initiates a BUY rating on 361 Degrees with a target price (TP) of HK$6.23, based on a 10x FY24E P/E ratio, indicating a potential upside of 43.5% from the current price of HK$4.34 [4]. Core Insights - The report highlights a turnaround driven by star products and sponsorships, forecasting a 16% sales CAGR and a 20% net profit CAGR from FY22 to FY25, compared to previous growth rates of 7% and 20% from FY19 to FY22 [2][27]. - 361 Degrees is positioned as the 4th-largest domestic sportswear brand in China, with a market share of 3.1% in 2022 and a robust store network of approximately 5,480 adult stores and 2,288 kids stores [2][19]. Summary by Sections Company Overview - 361 Degrees is recognized as the 4th-largest domestic sportswear company in China, established in 2003 and listed on the HKEX in 2008, with significant sales and net profit figures of RMB7.0 billion and RMB747 million in FY22 [19][23]. Key Positives and Growth Drivers - The brand's successful rebranding strategy initiated in 2019 has led to improved market share and financial performance, with retail sales growth accelerating since FY21 [27][28]. - Significant improvements in product offerings, particularly in running and basketball segments, have been noted, with a focus on R&D and innovative designs [41][53]. - The e-commerce segment has shown remarkable growth, with a sales CAGR of 23% from FY19 to FY22, and is expected to continue its upward trajectory [38][35]. Financial Forecast - Revenue is projected to grow from RMB6.96 billion in FY22 to RMB10.97 billion by FY25, with net profit expected to increase from RMB747 million to RMB1.27 billion over the same period [3][9]. - The report anticipates a P/E ratio decline from 9.0x in FY22 to 6.2x by FY25, indicating an attractive valuation compared to industry averages [3][4]. Market Position and Strategy - The company has effectively utilized sponsorships and endorsements to enhance its professional image and connect with younger consumers, which is crucial for market share expansion [59][60]. - The strategic focus on lower-tier cities has been beneficial, as these markets are expected to show resilience in consumer spending [20][22].