Investment Rating - The report suggests a positive outlook for the light industry and textile apparel sectors, indicating a potential "Overweight" rating for these industries based on their fundamentals and expected performance relative to market benchmarks [18]. Core Insights - The light industry is experiencing rapid growth driven by new consumer trends led by Generation Z, with products like blind boxes tapping into deep emotional values. The integration of AI technologies is expected to enhance manufacturing processes, and domestic demand is anticipated to stabilize, leading to valuation recovery [2][3]. - The textile and apparel sector is projected to benefit from increased gold demand and favorable policies aimed at boosting consumer confidence. The outdoor economy is expected to drive sales in sportswear, supported by digital upgrades in the industry [9][10]. Summary by Sections Market Review - During the week of August 11-15, 2025, the A-share SW textile and apparel industry index fell by 1.37%, while the light industry manufacturing sector rose by 1.56%. The Shanghai Composite Index increased by 1.70% [1]. Light Industry - The demand for trendy toys is rapidly increasing, with companies like Pop Mart and Guogu focusing on global expansion. The collaboration between Reading Group and Honor of Kings marks a significant step in the IP derivative market, with Reading Group reporting a net profit of 850 million yuan, a 68.5% increase year-on-year [2]. - The export chain for light industry products such as thermos cups and office furniture is stable, with a 3% increase in furniture import and export value in July. The total import and export value for the first seven months of 2025 reached 3.58 trillion USD, a 2.4% increase [3]. Home Furnishing Sector - Retail sales of furniture grew by 20.6% in July, with a total retail value of 115.9 billion yuan for the first seven months, reflecting a 22.6% year-on-year increase. The ongoing policy to encourage the replacement of old consumer goods is a key driver of this growth [4]. Paper & Packaging - The price of corrugated paper has been rising, with a 0.69% increase noted recently. The market is experiencing a strong upward trend in prices due to increased demand from downstream packaging companies [9]. Textile & Apparel - The domestic gold jewelry market is expected to see improved sales and performance due to rising gold demand. The sportswear segment is also anticipated to thrive, supported by government policies and the ongoing digital transformation of the industry [10][11]. - Retail sales in the textile and apparel sector showed a steady growth of 2.9% year-on-year for the first seven months of 2025, with July sales reaching 961 billion yuan, a 1.8% increase [13]. Investment Recommendations - Suggested companies to watch include: - Textile and Apparel: Weixing Co., Huali Group, Baoxing Bird, Hailan Home, and others [14]. - Light Industry: Nine Company, Oppein Home, Zhijia Home, and others [14]. - Hong Kong Stocks: Pop Mart, Laopu Gold, and others [14].

Market Overview - The textile and apparel sector has shown a performance in line with the broader market since August, with textile manufacturing outperforming branded apparel, recording increases of 4.2% and 3.4% respectively [13][19] - Key companies leading the upward trend include Xtep International (+9.4%), Bosideng (+8.5%), and Li Ning (+8.1%) [13][19] Brand Apparel Insights - In July, the retail sales of clothing grew by 1.8% year-on-year, reflecting a slight deceleration compared to the previous month [21] - E-commerce sales saw a significant rebound, particularly in outdoor apparel, with growth rates of 26% for outdoor clothing and 11% for sportswear [21][28] - Notable brands with double-digit growth include Descente (+63%), Puma (+41%), and Lululemon (+39%) [21] Textile Manufacturing Insights - Vietnam's textile exports accelerated in July, with a month-on-month growth of 16.7%, while China's textile exports showed a modest increase of 0.5% [2] - The PMI for Vietnam, Indonesia, and India rose by 3.5, 2.3, and 0.7 respectively, indicating improved manufacturing conditions [2] - The cotton prices have shown slight fluctuations, with domestic prices decreasing by 0.7% and international prices increasing by 1.8% since August [2] Company Performance and Forecasts - Non-sport apparel brands have generally faced challenges due to macroeconomic conditions, leading to a decline in revenue and increased inventory impairment [4] - Sports apparel brands have maintained robust fundamentals, with management teams optimistic about meeting annual performance targets despite a slowdown in growth [4] - Companies like Shenzhou International and Huayi Group are expected to show significant earnings resilience post the current low point in Q2 and Q3 [4][7] Investment Recommendations - Focus on companies with strong fundamentals and low valuations, particularly those with high performance in mid-year reports [3][7] - Recommended stocks include Anta Sports, Xtep International, and Li Ning for branded apparel, and Shenzhou International and Huayi Group for textile manufacturing [7][8]

[Financial Highlights](index=3&type=section&id=Financial%20Highlights) [Profitability and Operating Data](index=3&type=section&id=Profitability%20and%20Operating%20Data) For the six months ended June 30, 2025, the company's profitability steadily improved, with revenue increasing by 11.0% to RMB 5.705 billion and profit attributable to equity holders growing by 8.6% to RMB 858 million, while gross profit margin slightly rose by 0.2 percentage points to 41.5% Profitability Data for the Six Months Ended June 30, 2025 | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | **Revenue** | RMB 5,704.8 million | RMB 5,141.3 million | +11.0% | | **Gross Profit** | RMB 2,366.5 million | RMB 2,125.0 million | +11.4% | | **Operating Profit** | RMB 1,137.3 million | RMB 1,060.4 million | +7.2% | | **Profit Attributable to Equity Holders** | RMB 857.7 million | RMB 789.7 million | +8.6% | | **Basic Earnings Per Share** | RMB 41.5 cents | RMB 38.2 cents | +8.6% | | **Gross Profit Margin** | 41.5% | 41.3% | +0.2 percentage points | | **Operating Profit Margin** | 19.9% | 20.6% | -0.7 percentage points | [Balance Sheet and Cash Flow Data](index=4&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Data) As of June 30, 2025, the company maintained a healthy asset position and ample liquidity, with net cash inflow from operating activities significantly increasing by 227.2% to RMB 524 million and net cash growing by 7.5% to RMB 4.301 billion Asset and Liquidity Data as of June 30, 2025 | Indicator | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Equity Attributable to Equity Holders** | RMB 10,048.8 million | RMB 9,375.2 million | +7.2% | | **Net Cash Inflow from Operating Activities** | RMB 523.8 million | RMB 160.1 million | +227.2% | | **Net Cash** | RMB 4,300.7 million | RMB 4,001.7 million | +7.5% | | **Current Ratio** | 3.8 | 3.6 | +0.2 | | **Inventory Turnover Days** | 109 days | 107 days | +2 days | | **Trade Receivables and Bills Receivable Turnover Days** | 146 days | 149 days | -3 days | | **Trade Payables and Bills Payable Turnover Days** | 71 days | 88 days | -17 days | [Interim Results Overview](index=5&type=section&id=Interim%20Results%20Overview) [Performance and Store Network Summary](index=5&type=section&id=Performance%20and%20Store%20Network%20Summary) In the first half of 2025, the company achieved significant growth across all business segments, with total revenue increasing by 11.0% to RMB 5.70 billion and profit attributable to equity holders growing by 8.6% to RMB 858 million - Revenue increased by **11.0%** to **RMB 5.70 billion**, with profit attributable to equity holders growing by **8.6%** to **RMB 858 million**[10](index=10&type=chunk)[11](index=11&type=chunk) - E-commerce business showed strong performance, with revenue significantly increasing by **45.0%** year-on-year to **RMB 1.82 billion**[14](index=14&type=chunk) - 361º Children's business achieved steady growth, with revenue increasing by **11.4%** year-on-year to **RMB 1.26 billion**[12](index=12&type=chunk) - The Board recommended an interim dividend of **20.4 HK cents** per share, with a payout ratio of **45.0%**[15](index=15&type=chunk) - As of the end of the period, the company operated **5,669 361° stores** and **2,494 361° Children sales outlets** in mainland China, along with **1,357 sales outlets** in overseas markets[17](index=17&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) [Overall Performance and Brand Strategy](index=7&type=section&id=Overall%20Performance%20and%20Brand%20Strategy) In the first half of 2025, the Group achieved a 11.0% year-on-year revenue increase to RMB 5.7 billion and an 8.6% growth in profit attributable to equity holders to RMB 858 million, while consistently enhancing its professional and international brand image through strategic sponsorships and product innovations H1 2025 Performance Summary | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | RMB 5.7 billion | 11.0% | | Profit Attributable to Equity Holders | RMB 858 million | 8.6% | - The Board recommended an interim dividend of **20.4 HK cents** per share, with a payout ratio of **45.0%**[20](index=20&type=chunk) - The core brand strategy focuses on "professionalization, youthfulness, and internationalization," strengthening its professional image through sponsoring major events like the Asian Winter Games and collaborating with international sports organizations such as World Aquatics[21](index=21&type=chunk)[25](index=25&type=chunk) - The company launched the first signature shoe "JOKER1 GT" for global brand ambassador Nikola Jokić and successfully held his first "China Tour" event, enhancing the brand's international recognition[28](index=28&type=chunk) [Children's Business and Channel Expansion](index=10&type=section&id=Children's%20Business%20and%20Channel%20Expansion) The 361º Children's business, positioned as a "Youth Sports Expert," continues to drive high-quality growth with 2,494 sales outlets, while the Group expands its omnichannel retail presence, including 49 "Super Stores" and 1,357 overseas sales outlets - 361º Children's business is positioned as a "Youth Sports Expert" and is one of the core engines for the Group's steady growth[31](index=31&type=chunk) - As of the end of the period, the number of 361º Children's sales outlets reached **2,494**, with continuous upgrades to store image[35](index=35&type=chunk) - The new retail format "Super Stores" has accumulated **49 locations** as of June 30, 2025[39](index=39&type=chunk) - Accelerated international expansion includes **1,357 offline sales outlets** across the Americas, Europe, and Belt and Road markets, with the first overseas direct-operated store opened in Kuala Lumpur, Malaysia[39](index=39&type=chunk) [Sustainable Development and Outlook](index=12&type=section&id=Sustainable%20Development%20and%20Outlook) The Group integrates sustainable development into its corporate strategy, focusing on green production, product R&D, and social welfare, while aiming to deepen its brand positioning and expand its business ecosystem globally - Integrating sustainable development (ESG) concepts into corporate strategy, promoting deep integration of green technology and product R&D[40](index=40&type=chunk) - Actively fulfilling social responsibility, for example, by promptly donating supplies to disaster areas after the Tibet earthquake in January 2025[40](index=40&type=chunk) - Looking ahead, the Group will continue to deepen its brand positioning, expand its business ecosystem, and achieve more breakthroughs and value accumulation on the global stage[41](index=41&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Review](index=13&type=section&id=Industry%20Review) In the first half of 2025, China's economy demonstrated resilience with 5.3% GDP growth, while the domestic consumer market, particularly sports consumption, saw accelerated transformation driven by supportive policies and technological innovation - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, with the domestic consumer market showing diversified, digitalized, and refined development trends[44](index=44&type=chunk)[45](index=45&type=chunk) - The state has issued multiple policies to support the development of the sports industry, focusing on the ice and snow economy, event economy, outdoor economy, and upgrading of sports goods[45](index=45&type=chunk)[46](index=46&type=chunk) - Technological innovation continues to stimulate new momentum in the sports goods industry, while various sports events (e.g., Asian Winter Games, "Cun Chao") have strong带动 effects[48](index=48&type=chunk) - The domestic children's sportswear market has significant long-term growth potential amid upgraded birth support policies and changing parenting concepts[51](index=51&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) The Group maintained its "professionalization, youthfulness, and internationalization" brand positioning, optimizing its retail network to 5,669 core brand stores and 49 "Super Stores," while achieving strong growth in children's, international, and e-commerce businesses, with e-commerce revenue share increasing to 31.8% [Brand, Positioning and Business Model](index=16&type=section&id=Brand%2C%20Positioning%20and%20Business%20Model) 361º Group, a leading comprehensive sports goods company in China, maintains a "professional, youthful, and international" brand positioning, focusing on the mass professional sports market through an efficient distribution business model - Brand positioning is "professional, youthful, and international," providing consumers with high-value mass professional sports products[55](index=55&type=chunk) - Adopts a distribution business model where first-tier distributors exclusively distribute products in their respective regions, allowing the company to focus on brand management and product R&D[56](index=56&type=chunk) - Holds four ordering fairs annually, typically six months before new product launches, to ensure production delivery times and effectively enhance the certainty of sales revenue[58](index=58&type=chunk) [Retail Network](index=17&type=section&id=Retail%20Network) As of June 30, 2025, the Group operated 5,669 361º core brand stores in China, with an optimized store structure and an average area of 156 square meters, while successfully launching 49 "Super Stores" as a new retail format - As of June 30, 2025, the Group had **5,669 361º brand stores**, with an average single-store area of **156 square meters**[60](index=60&type=chunk) - The new retail format "Super Stores" has accumulated **49 locations**, including **4 dedicated children's Super Stores**, effectively enhancing the shopping experience and brand image[61](index=61&type=chunk) 361º Core Brand Authorized Retail Stores by Region | Region | Number of Stores (As of June 30, 2025) | % of Total | | :--- | :--- | :--- | | East | 1,141 | 20.1% | | South | 684 | 12.1% | | West | 1,252 | 22.1% | | North | 2,592 | 45.7% | | **Total** | **5,669** | **100.0%** | [Brand Promotion and Marketing](index=19&type=section&id=Brand%20Promotion%20and%20Marketing) The Group built a rich brand resource matrix by sponsoring major sports events, professional teams, and elite athletes, significantly enhancing its international influence and professional image in running and basketball through strategic partnerships and IP collaborations - Continuously served as an official partner of the Olympic Council of Asia for **16 years**, becoming the first sports brand to sponsor both the Asian Games and Asian Winter Games simultaneously[70](index=70&type=chunk) - Signed a new partnership with World Aquatics, becoming a global partner for 2026–2029, expanding the brand's overseas presence[70](index=70&type=chunk) - In the running sector, launched its proprietary IP "Track No. 3 10KM Speed Series"; in basketball, its proprietary event "Touchdown and Ignite" has achieved global expansion and entered Japan[71](index=71&type=chunk)[78](index=78&type=chunk) - Successfully broke into younger consumer segments by collaborating with popular IPs such as Xiaoliuya and Peppa Pig to launch co-branded products[81](index=81&type=chunk) [361º Children Business](index=31&type=section&id=361%C2%BA%20Children%20Business) The 361º Children's business, positioned as a "Youth Sports Expert," recorded revenue of RMB 1.261 billion, a 11.4% year-on-year increase, accounting for 22.1% of the Group's total revenue, with 2,494 sales outlets and continuous channel image upgrades 361º Children Business Performance | Indicator | Amount/Quantity | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | RMB 1,260.8 million | +11.4% | | % of Group's Total Revenue | 22.1% | - | | Number of Sales Outlets | 2,494 | - | - Product lines expanded upwards to the **16-year-old age group**, introducing innovative technologies like FLASH technology and arch adaptive system technology to enhance product performance[105](index=105&type=chunk) - Channel image continues to upgrade, with fourth-generation and fifth-generation concept stores collectively accounting for **90.9%**[107](index=107&type=chunk) [361º International Business](index=34&type=section&id=361%C2%BA%20International%20Business) During the review period, the Group's international business achieved steady growth, with revenue of RMB 87.6 million, a 19.7% year-on-year increase, accounting for 1.5% of total revenue, supported by 1,357 overseas sales outlets and the opening of its first direct-operated store in Malaysia 361º International Business Performance | Indicator | Amount/Quantity | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | RMB 87.6 million | +19.7% | | % of Group's Total Revenue | 1.5% | - | | Number of Overseas Sales Outlets | 1,357 | - | - In January 2025, the first overseas direct-operated store was opened in Kuala Lumpur, Malaysia, with good operational performance[118](index=118&type=chunk) [E-commerce Business](index=34&type=section&id=E-commerce%20Business) The Group's e-commerce business demonstrated strong growth momentum, with revenue reaching RMB 1.817 billion, a significant 45.0% year-on-year increase, and its contribution to total revenue rising from 24.4% to 31.8% E-commerce Business Performance | Indicator | Amount | Year-on-Year Growth | | :--- | :--- | :--- | | Revenue | RMB 1,816.9 million | +45.0% | | % of Group's Total Revenue | 31.8% | - | - E-commerce business has become one of the key drivers of the Group's business growth, primarily selling through platforms such as Tmall, Taobao, JD.com, and Vipshop[119](index=119&type=chunk)[122](index=122&type=chunk) - In Q1 and Q2 2025, e-commerce omnichannel GMV achieved year-on-year growth of **35%-40%** and **20%**, respectively[122](index=122&type=chunk) [Production and Research & Development](index=35&type=section&id=Production%20and%20Research%20%26%20Development) The Group employs a flexible production model combining in-house manufacturing and OEM outsourcing, with R&D expenses accounting for 2.8% of total revenue in H1, continuously launching professional products with new technologies and holding 870 patents - Adopts a production model combining in-house manufacturing and OEM outsourcing, with approximately **33.0%** of footwear products and **19.0%** of apparel being self-produced[124](index=124&type=chunk)[126](index=126&type=chunk) - R&D expenses accounted for **2.8%** of total revenue in the first half, with an estimated full-year range of **3% to 4%**[127](index=127&type=chunk)[6](index=6&type=chunk) - Continuously launches new technology products, such as "Feibiao FUTURE2" and "Qianhang 1.0" running shoes, "DVD3" and "JOKER1 GT" basketball shoes, and expands into categories like badminton, cycling, and women's training[132](index=132&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - As of June 30, 2025, the Group had obtained **870 patents** and had **832 technical personnel** involved in product R&D[140](index=140&type=chunk) [Awards and Sustainable Development](index=40&type=section&id=Awards%20and%20Sustainable%20Development) During the review period, the Group received multiple accolades, including "Best IR Hong Kong Stock Company," while actively integrating ESG principles into its operations through eco-friendly materials, green procurement, social responsibility, and enhanced corporate governance - Awarded "8th New Fortune Best IR Hong Kong Stock Company (H-share)" and "16th Tianma Award for Investor Relations Management of Hong Kong Listed Companies," among other capital market awards[142](index=142&type=chunk) - Widely applies environmentally friendly materials in products, such as the "Feibiao FUTURE2" running shoes, which use **30%** eco-friendly yarn[145](index=145&type=chunk) - Actively fulfills social responsibility, for example, by promptly donating **RMB 8 million** worth of winter supplies to the disaster area after the Tibet earthquake in January 2025[146](index=146&type=chunk) [Financial Review](index=42&type=section&id=Financial%20Review) In the first half, the Group's financial performance was robust, with revenue increasing by 11.0% to RMB 5.705 billion, driven by strong growth in adult and children's footwear, while gross profit margin slightly rose to 41.5% and operating cash inflow remained strong [Revenue Analysis](index=42&type=section&id=Revenue%20Analysis) During the review period, the Group's revenue increased by 11.0% to RMB 5.705 billion, primarily driven by strong growth in adult and children's footwear, while apparel categories adjusted average selling prices to boost sales Revenue Breakdown by Product Category (RMB thousands) | Product Category | H1 2025 | % of Total | H1 2024 | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Adult Footwear** | 2,574,949 | 45.1% | 2,283,242 | 44.4% | +12.8% | | **Adult Apparel** | 1,601,482 | 28.1% | 1,575,714 | 30.7% | +1.6% | | **Children's Footwear** | 711,620 | 12.5% | 556,627 | 10.8% | +27.8% | | **Children's Apparel** | 521,850 | 9.1% | 564,668 | 11.0% | -7.6% | | **Others** | 294,929 | 5.2% | 161,033 | 3.1% | +83.2% | | **Total** | **5,704,830** | **100.0%** | **5,141,284** | **100.0%** | **+11.0%** | - The average wholesale selling prices for adult and children's apparel were reduced by **4.5%** and **6.3%** respectively, to enhance value-for-money and boost sales volume[152](index=152&type=chunk)[155](index=155&type=chunk) [Cost, Gross Profit and Expense Analysis](index=45&type=section&id=Cost%2C%20Gross%20Profit%20and%20Expense%20Analysis) In the first half, cost of sales increased by 10.7% to RMB 3.338 billion, in line with revenue growth, leading to an 11.4% increase in gross profit to RMB 2.366 billion and a slight rise in gross profit margin to 41.5%, while selling and distribution expenses increased due to higher advertising and e-commerce platform fees - The Group's overall gross profit margin slightly increased from **41.3%** to **41.5%**, with adult footwear and apparel gross profit margins improving by **0.5** and **1.1 percentage points** respectively[161](index=161&type=chunk)[162](index=162&type=chunk) - Selling and distribution expenses increased by **13.2%** year-on-year to **RMB 1.037 billion**, with advertising and promotion expenses at **RMB 577 million**, accounting for **10.1%** of revenue[168](index=168&type=chunk) - R&D expenses within administrative expenses increased by **12.1%** year-on-year to **RMB 160 million**, accounting for **2.8%** of total revenue[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity, Capital Structure and Working Capital](index=49&type=section&id=Liquidity%2C%20Capital%20Structure%20and%20Working%20Capital) As of the period end, the Group maintained a healthy cash position with RMB 4.612 billion in cash and cash equivalents and a low debt-to-asset ratio of 2.2%, while working capital turnover days increased to 184 days primarily due to a significant reduction in trade payables turnover days - Net cash inflow from operating activities was **RMB 524 million**, primarily contributed by profit before tax[178](index=178&type=chunk) - The debt-to-asset ratio (total bank borrowings/total assets) was **2.2%**, indicating a very healthy financial position[184](index=184&type=chunk) Working Capital Turnover Days | Indicator | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Inventory Turnover Days | 109 | 107 | +2 | | Trade Receivables and Bills Receivable Turnover Days | 146 | 149 | -3 | | Trade Payables and Bills Payable Turnover Days | 71 | 88 | -17 | | **Working Capital Turnover Days** | **184** | **168** | **+16** | [Dividends](index=53&type=section&id=Dividends) The Board resolved to declare an interim dividend of 20.4 HK cents per share, an increase from the previous year, with the payout ratio rising to 45.0% and return on equity improving to 8.8%, reflecting enhanced profitability and commitment to shareholder returns - Declared an interim dividend of **20.4 HK cents** per share, higher than **16.5 HK cents** in the same period last year[194](index=194&type=chunk) - The payout ratio reached **45.0%**, a steady increase from **40.3%** in the first half of 2024[194](index=194&type=chunk) - Return on equity (ROE) rose to **8.8%**, showing continuous improvement for three consecutive reporting periods[194](index=194&type=chunk) [Outlook](index=54&type=section&id=Outlook) Looking ahead to H2 2025, the Group will continue to prioritize consumer-centricity, strengthen its "professional, youthful, and international" brand positioning, and expand its global market reach through omnichannel development and cross-border e-commerce - Will continue to solidify the "professional, youthful, and international" brand positioning, focusing on technological innovation and brand building[201](index=201&type=chunk) - The children's brand will extend its product matrix around structural changes in demand, strengthening its positioning as a "Youth Sports Expert"[201](index=201&type=chunk) - Channel development will fully promote online-offline integration, expanding global market coverage through dual empowerment of cross-border e-commerce and overseas offline outlets[201](index=201&type=chunk) [Condensed Consolidated Financial Statements](index=55&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=55&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement presents the income, costs, expenses, and profit for the six months ended June 30, 2025, showing revenue of RMB 5.705 billion, operating profit of RMB 1.137 billion, and profit attributable to equity holders of RMB 858 million Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Item (RMB thousands) | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | **Revenue** | **5,704,830** | **5,141,284** | | Cost of sales | (3,338,380) | (3,016,287) | | **Gross Profit** | **2,366,450** | **2,124,997** | | Operating profit | 1,137,251 | 1,060,445 | | Profit before income tax | 1,131,854 | 1,052,282 | | **Profit for the period** | **872,396** | **821,709** | | **Profit attributable to equity holders of the Company** | **857,690** | **789,703** | | **Basic and diluted earnings per share (RMB cents)** | **41.48** | **38.19** | [Condensed Consolidated Statement of Financial Position](index=57&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement reflects the assets, liabilities, and equity as of June 30, 2025, with total assets of RMB 14.129 billion, total liabilities of RMB 3.612 billion, and net assets of RMB 10.517 billion, indicating a strong short-term solvency position Condensed Consolidated Statement of Financial Position Summary (As of reporting period end) | Item (RMB thousands) | As of June 30, 2025 (Unaudited) | As of December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | 1,335,978 | 1,355,479 | | **Current assets** | 12,793,009 | 12,058,073 | | **Total assets** | **14,128,987** | **13,413,552** | | **Current liabilities** | 3,396,808 | 3,362,734 | | **Non-current liabilities** | 214,826 | 221,690 | | **Total liabilities** | **3,611,634** | **3,584,424** | | **Net assets** | **10,517,353** | **9,829,128** | | **Total equity attributable to equity holders of the Company** | 10,048,761 | 9,375,242 | [Condensed Consolidated Statement of Cash Flows](index=60&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement details cash inflows and outflows for the period, with net cash generated from operating activities of RMB 524 million, net cash used in investing activities of RMB 36 million, and net cash used in financing activities of RMB 149 million, resulting in a net increase of RMB 348 million in cash and cash equivalents to RMB 4.603 billion Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item (RMB thousands) | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | **Net cash generated from operating activities** | **523,764** | **160,093** | | **Net cash used in investing activities** | **(35,918)** | **(104,181)** | | **Net cash used in financing activities** | **(149,174)** | **(241,440)** | | Net increase/(decrease) in cash and cash equivalents | 338,672 | (185,528) | | Cash and cash equivalents at January 1 | 4,254,236 | 3,596,489 | | **Cash and cash equivalents at June 30** | **4,602,802** | **3,410,468** | [Notes to the Condensed Consolidated Interim Financial Statements](index=61&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide detailed explanations and supplementary information for the financial statements, covering key aspects such as basis of preparation, accounting policy changes, revenue and segment reporting, expense breakdowns, taxation, earnings per share calculation, balance sheet item details, dividend policy, related party transactions, and fair value of financial instruments - Revenue is divided into two reportable segments: adult and children's apparel, with the adult segment contributing **RMB 4.445 billion** and the children's segment contributing **RMB 1.260 billion**[225](index=225&type=chunk)[226](index=226&type=chunk) - As of the end of the reporting period, total trade receivables and bills receivable amounted to **RMB 4.744 billion**, with **92.7%** aged within **180 days**, indicating an improved aging structure[190](index=190&type=chunk)[242](index=242&type=chunk) - The Board declared an interim dividend of **20.4 HK cents** per ordinary share, totaling approximately **RMB 386 million**; the final dividend for the year ended December 31, 2024 (10.0 HK cents per share, totaling approximately RMB 191 million) was paid during the period[254](index=254&type=chunk)[255](index=255&type=chunk) [Corporate Governance and Other Information](index=77&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance and Shareholder Interests](index=77&type=section&id=Corporate%20Governance%20and%20Shareholder%20Interests) During this reporting period, the company complied with the Corporate Governance Code, disclosing detailed shareholdings of directors and major shareholders, with the Audit Committee reviewing the interim financial statements - The company has complied with the code provisions of the Corporate Governance Code as set out in the Listing Rules for the six months ended June 30, 2025[269](index=269&type=chunk) - Major shareholders and executive directors Ding Wuhou, Ding Huihuang, Ding Huirong, and others collectively hold over **60%** of the company's shares through discretionary trusts[270](index=270&type=chunk)[282](index=282&type=chunk) - The company adopted a new share option scheme in April 2023, but no share options have been granted, exercised, cancelled, or lapsed since its adoption[275](index=275&type=chunk)[280](index=280&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial statements for the six months ended June 30, 2025[288](index=288&type=chunk) [Shareholder Information](index=82&type=section&id=Shareholder%20Information) [Dividend and Registration Information](index=82&type=section&id=Dividend%20and%20Registration%20Information) This section provides key dates and shareholder registration information for the interim dividend payment, which is 20.4 HK cents per share, with an ex-dividend date of September 10, 2025, and payment around September 25 Interim Dividend Timetable | Event | Date | | :--- | :--- | | Interim Results Announcement | August 12, 2025 | | Ex-dividend Date for Interim Dividend | September 10, 2025 | | Book Closure Period | September 12 to September 16, 2025 | | Record Date | September 16, 2025 | | Interim Dividend Payment Date | On or about September 25, 2025 | - The Board resolved to declare an interim dividend of **20.4 HK cents** per share[290](index=290&type=chunk) [Company Information](index=83&type=section&id=Company%20Information) [Basic Company Information](index=83&type=section&id=Basic%20Company%20Information) This section lists the company's core information, including board members, committee compositions, company secretary, registered office, principal place of business, auditors, legal advisors, and principal bankers, with the company's stock code being 01361 - Executive Directors include Ding Wuhou, Ding Huihuang (Chairman), Ding Huirong, and Wang Jiabi[296](index=296&type=chunk) - The company's auditors are UHY CPA Limited[295](index=295&type=chunk) - The company's stock code is **01361**, and its website is www.361sport.com[295](index=295&type=chunk)[296](index=296&type=chunk)

Core Viewpoint - The company reported a revenue of 5.7 billion RMB for the first half of 2025, representing an 11% year-on-year increase, with a net profit of 858 million RMB, up 8.6% year-on-year [1][2] Financial Performance - The gross profit margin stood at 41.5%, reflecting a 0.2 percentage point increase year-on-year [1] - The company plans to distribute an interim dividend of 20.4 Hong Kong cents, with a payout ratio of 45.0% [1] Product Development - Research and development expenditure accounted for 2.8% of revenue, with over 230 new SKUs of high-quality products launched in the first half of 2025 [1] - The company achieved sales of over 14.6 million units of its premium products across all channels [1] Brand and Market Expansion - The company officially launched the official sports apparel for the 20th Asian Games and is a partner for the 2025 Harbin Winter Games, showcasing its commitment to supporting sports in China [1] - The company has become a global partner of FINA for the 2026-2029 period, promoting water sports worldwide [1] New Category Development - The professional racing shoe lineup has achieved significant success, helping athletes reach the podium 85 times [1] - The company is expanding into popular sports categories such as skateboarding, badminton, and cycling to meet diverse market demands [1] Retail Innovation - The company operates 7,026 global sales outlets, with 5,669 located in mainland China and 2,494 dedicated to children's products [1] - The company opened 49 new stores in the first half of the year, enhancing its retail presence and creating a differentiated advantage in the market [2] Profit Forecast - The company maintains its profit forecast for 2025-2027, expecting revenues of 11.3 billion RMB, 12.8 billion RMB, and 14.5 billion RMB, with net profits of 1.3 billion RMB, 1.4 billion RMB, and 1.6 billion RMB respectively [2] - Corresponding EPS is projected to be 0.61 RMB, 0.69 RMB, and 0.79 RMB, with PE ratios of 9x, 8x, and 7x [2]

Core Insights - The Chinese football shoe market is experiencing significant growth driven by an increase in football participation and favorable policies, with production and sales both thriving [1][9] - Domestic brands are enhancing their R&D efforts and adopting new materials and advanced technologies, enabling them to compete with international brands [1][9] - The market is projected to reach a production volume of 115.86 million pairs and a sales revenue of 15.463 billion yuan in 2024, with further growth expected in 2025 [1][9] Industry Overview - Football shoes are specialized footwear for players, categorized based on the playing surface, including FG, AG, MG, and TF types [2][3] - The domestic market primarily offers MG and TF types, while FG and AG types are less common due to stringent surface requirements [5][9] Market Dynamics - The global football shoe market is also expanding, with a projected production of 233.42 million pairs and a market size of 6.446 billion USD in 2024 [7][9] - In China, the demand for football shoes is largely driven by amateur players, with 59.52 million pairs expected to be sold in 2024, contributing to a market size of approximately 6.708 billion yuan [11][9] Competitive Landscape - The competition in the Chinese football shoe market is characterized by international brands dominating the high-end segment, while domestic brands focus on cost-effectiveness and local market needs [21][26] - Domestic brands are increasingly investing in R&D to improve their product offerings and compete in the mid-range market [26][29] Policy Environment - Recent government policies aim to support the sports industry, including financial backing for sports manufacturing and encouraging participation in outdoor activities [18][20] Future Outlook - The demand for football shoes in China is expected to continue growing, with a structural trend of "amateur dominance and professional follow-up" [29] - Domestic brands are encouraged to enhance their material and design capabilities to penetrate the high-end market effectively [29]

Group 1: Macro Strategy and Market Overview - The A-share market saw significant gains, with the ChiNext Index rising by 8.58% and the CSI 500 and Shenzhen Component Index both increasing over 3.5% [1] - The central bank injected a net of 85.1 billion yuan into the market, maintaining stable liquidity [1][28] - The U.S. dollar index fell to 97.84, down 0.43% week-on-week, while the RMB remained stable at 7.19 [1][29] - The report anticipates continued policy stability and flexibility in the second half of the year, with a focus on gold and convertible bonds [1][30] Group 2: Fixed Income Market Insights - The current market shows a divergence between stock and bond performance, driven by policy expectations and market sentiment [2][31] - The central bank's timely interventions have provided support to the bond market, especially during periods of rising interest rates [2][33] - The report suggests that the 10-year government bond yield may reach a temporary peak around 1.80% [2][34] Group 3: Banking Sector Analysis - The banking sector is experiencing a trend of "credit pre-positioning," with a focus on early-year lending [4] - There is a notable divergence in credit growth between large state-owned banks and smaller banks, with the latter facing negative growth [4] - The report indicates that 2025 may see the smallest decline in loan rates since the LPR reform, with corporate and mortgage rates stabilizing around 3.2% and 3.1% respectively [4] Group 4: Cement Industry Overview - The necessity for "anti-involution" in the cement industry remains, with average prices down 43.7 yuan/ton year-on-year [7] - The previous supply-side reforms have led to a significant recovery in industry profits, with profits rising from 51.8 billion yuan in 2016 to 186.7 billion yuan in 2019 [7] - The report anticipates a continued decline in cement demand, with a potential drop of 18%-34% from 2024 levels [7] Group 5: Oil and Gas Sector Insights - The IEA has revised down its oil demand growth forecast by 350,000 barrels per day for the year, citing weak consumer confidence [8] - The IEA has increased its supply growth forecast for 2025 by 370,000 barrels per day, driven by OPEC's easing of production cuts [8] - Oil inventories have risen for five consecutive months, reaching a 46-month high of 783.6 million barrels [8] Group 6: Semiconductor Industry Trends - The "storage instead of computing" approach is expected to significantly enhance AI inference efficiency, driving rapid growth in SSD demand [17] - The semiconductor industry is experiencing stable growth in equipment and materials, with improved orders in wafer foundries and packaging [17] - The report maintains an optimistic outlook for global semiconductor growth driven by AI applications [17] Group 7: Home Appliance Sector Performance - Ecovacs reported a revenue of 8.68 billion yuan for H1 2025, a year-on-year increase of 24.4%, with a net profit of 980 million yuan, up 60.8% [35] - The company has seen strong growth in both domestic and overseas markets, particularly in Europe, where revenue increased by 66.6% [35][36] - The report highlights the company's strategic focus on optimizing its marketing investment model to improve profitability [36]

Core Viewpoint - 361 Degrees is entering the robot wearables industry through a strategic partnership with Stand Robot, aiming to leverage both companies' strengths in developing AI-integrated sports apparel and accessories [1][2]. Group 1: Company Developments - 361 Degrees has reported impressive financial growth, with a revenue of 10.07 billion yuan in 2024, marking a year-on-year increase of 19.6%, and a net profit of 1.15 billion yuan, up 19.5% [2]. - The collaboration with Stand Robot signifies a strategic shift for 361 Degrees from a traditional sports brand to a "technology + sports" ecosystem enterprise [2]. - The company aims to establish a new brand identity and enhance its market position by integrating artificial intelligence and smart manufacturing into its operations [2]. Group 2: Market Position and Challenges - Despite the growth, 361 Degrees faces challenges in competing with major players like Anta, Li Ning, and Xtep, which have stronger marketing and product strategies [2][3]. - The company has been perceived as adopting a cautious approach, which may hinder its ability to capitalize on emerging trends, particularly in the outdoor product category [2][3]. - To improve its market ranking and consumer perception, 361 Degrees needs a significant breakthrough, similar to successful branding strategies employed by competitors [3].

Core Viewpoint - 361 Degrees is entering the robot wearables industry through a strategic partnership with Stand Robot, aiming to leverage both companies' strengths in developing clothing, footwear, and accessories suitable for robots, as well as materials for embodied intelligent robots [2][3]. Group 1: Strategic Partnership - 361 Degrees has signed a strategic cooperation agreement with Stand Robot to establish a joint company focused on AI and intelligent manufacturing [2]. - The collaboration will lead to the creation of a "Future Sports Exploration Laboratory" to develop robot-compatible apparel and accessories, promoting the integration of traditional manufacturing with artificial intelligence [2]. Group 2: Market Context and Criticism - The entry into the robot wearables market has sparked skepticism, with some industry commentators questioning the rationale behind creating clothing for robots, suggesting it may be a mere attempt to capitalize on current trends [2]. - Critics argue that the demand for smart wearables among humans is significantly higher than for robots, likening the initiative to producing clothing for pets [2]. Group 3: Financial Performance - In 2024, 361 Degrees reported revenue of 10.07 billion yuan, a year-on-year increase of 19.6%, and a net profit of 1.15 billion yuan, also up by 19.5%, marking its entry into the billion-yuan revenue club [3]. - The company aims to transition from a traditional sports brand to a "technology + sports" ecosystem, indicating a strategic shift in its business model [3]. Group 4: Competitive Landscape - 361 Degrees is currently positioned behind major competitors like Xtep, which reported revenue of 13.58 billion yuan in 2024, highlighting the challenge of surpassing them [3]. - The company has been criticized for its slow development pace and lack of innovative products in the outdoor category, which has seen significant growth in recent years [3].

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [8] Core Insights - The company reported a revenue of 5.7 billion RMB for the first half of 2025, representing an 11% year-on-year increase, and a net profit attributable to shareholders of 858 million RMB, up 8.6% [1] - The gross margin stands at 41.5%, reflecting a 0.2 percentage point increase year-on-year [1] - The company plans to distribute an interim dividend of 20.4 Hong Kong cents, with a payout ratio of 45% [1] - Research and development expenses accounted for 2.8% of revenue, with over 230 new SKUs launched in the first half of 2025, and over 14.6 million units of premium products sold across all channels [2] - The company has expanded its resource matrix by becoming the official sportswear partner for the 20th Asian Games and the 2026-2029 FINA global partner [3] - The professional racing shoe matrix has achieved significant success, contributing to athletes winning 85 medals [4] - The retail network includes 7,026 global sales points, with 5,669 in mainland China and 2,494 dedicated to children's products [5] - The company has opened 49 new stores in the first half of 2025, enhancing its retail presence and creating a differentiated advantage [5] - The company maintains its profit forecasts for 2025-2027, expecting revenues of 11.3 billion RMB, 12.8 billion RMB, and 14.5 billion RMB, with net profits of 1.3 billion RMB, 1.4 billion RMB, and 1.6 billion RMB respectively [6]

Group 1 - In July, the total retail sales of consumer goods reached 38,780 billion yuan, with a year-on-year growth of 3.7% [1][6] - Excluding automobiles, the retail sales of consumer goods amounted to 34,931 billion yuan, growing by 4.3% [1][6] - From January to July, the total retail sales of consumer goods were 284,238 billion yuan, with a growth rate of 4.8% [1][6] Group 2 - Urban retail sales in July were 33,620 billion yuan, reflecting a year-on-year increase of 3.6%, while rural retail sales reached 5,160 billion yuan, growing by 3.9% [3] - For the first seven months, urban retail sales totaled 246,669 billion yuan, with a growth of 4.8%, and rural retail sales were 37,569 billion yuan, increasing by 4.7% [3] Group 3 - In July, the retail sales of goods were 34,276 billion yuan, with a year-on-year growth of 4.0%, while catering revenue was 4,504 billion yuan, growing by 1.1% [3][6] - From January to July, the retail sales of goods reached 252,254 billion yuan, with a growth of 4.9%, and catering revenue was 31,984 billion yuan, increasing by 3.8% [3] Group 4 - For the first seven months, retail sales in convenience stores, supermarkets, department stores, specialty stores, and brand exclusive stores grew by 7.0%, 5.2%, 1.1%, 5.8%, and 1.9% respectively [4] - The national online retail sales reached 86,835 billion yuan, with a year-on-year growth of 9.2%, and the physical goods online retail sales were 70,790 billion yuan, growing by 6.3% [4] Group 5 - The newly opened Apple Store in Shenzhen is the third in the city and the 58th in Greater China, completing the layout along the east-west axis of Shenzhen [11] - The first city duty-free store in Shenzhen is set to open on August 26, featuring a diverse range of products including beauty, watches, and high-end liquor [13] Group 6 - The local fashion brand Lemanism is opening its first store in Nanchang, focusing on a comfortable and sunny shopping experience for the youth [25] - The brand BornTooth is expanding with its fourth store in Shanghai, emphasizing natural pet care products [27] Group 7 - The high-end dining brand PIZZERIA from Pizza Hut has opened its first store in South China, targeting young consumers with a focus on aesthetic dining experiences [30] - JD's first outlet in Nanjing has opened, featuring over 70 brands and a unique shopping experience [31] Group 8 - The sports brand 361 Degrees reported a revenue of 5.705 billion yuan for the first half of 2025, with a year-on-year growth of 11% [38] - Lilang Group's revenue for the first half of the year was 1.727 billion yuan, reflecting a growth of 7.9% [41] Group 9 - The company Bubu Gao reported a net profit of 201 million yuan for the first half of 2025, marking a significant turnaround [42] - The company has improved its operational quality by closing underperforming stores and focusing on high-potential locations [43]