Investment Rating - The report initiates coverage with a "Buy" rating for 361 Degrees [3][35]. Core Insights - 361 Degrees has been deeply engaged in the sportswear sector for 20 years, focusing on professional, youthful, and international branding, leading to a return to growth with a revenue CAGR of 10.6% and a net profit CAGR of 22.1% from 2019 to 2023 [8][35]. - The company operates 9,539 offline stores as of the end of 2023, including 5,734 main brand stores, 2,545 children's stores, and 1,260 international stores [8]. - The adult apparel segment achieved revenue of 6.334 billion yuan in 2023, with significant growth in shoes (23%), clothing (10%), and accessories (43%) [9]. - The children's apparel segment has shown robust growth, with a revenue CAGR of 31.6% from 2011 to 2023, contributing 23% to total revenue in 2023 [13]. Summary by Sections Company Overview - 361 Degrees was established in 2003 and has evolved into a leading sportswear brand in China, focusing on running, basketball, training, lifestyle, and children's categories [8]. - The company has undergone three phases: rapid growth due to Olympic demand (2003-2011), adjustment during industry slowdown (2012-2018), and a focus on brand rejuvenation and professional empowerment since 2019 [8]. Core Competitiveness - The adult apparel business has returned to stable growth, driven by demand, with a revenue of 6.334 billion yuan in 2023 and a two-year CAGR of 15.5% [9]. - The children's apparel segment has maintained a net store expansion, reaching 2,545 stores by the end of 2023, with a focus on improving store quality [9][13]. - The company emphasizes high-quality store openings and e-commerce growth, with online sales accounting for 27.6% of total revenue in 2023 [9][31]. Financial Forecast and Investment Recommendations - The company is expected to achieve net profits of 1.151 billion yuan, 1.356 billion yuan, and 1.573 billion yuan from 2024 to 2026, representing growth rates of 20%, 18%, and 16% respectively [35]. - Revenue projections for 2024-2026 are 10.028 billion yuan, 11.900 billion yuan, and 13.800 billion yuan, with respective growth rates of 19.1%, 18.7%, and 16.0% [33][35].
361度：深耕大众运动，品牌力持续上行