Core Viewpoint - 361 Degrees has demonstrated strong retail performance in Q2 2025, with both adult and children's apparel achieving approximately 10% growth in offline sales and around 20% growth in e-commerce sales, reflecting the company's effective channel operations and product recognition [1][2]. Group 1: Retail Performance - In Q2 2025, 361 Degrees achieved about 10% growth in offline sales for both adult and children's apparel, and approximately 20% growth in e-commerce sales, meeting expectations [1]. - The company maintained a healthy inventory level with a channel sales ratio of 4.5-5 times, and the discount rate remained stable, with offline discounts around 30% and online discounts for shoes and apparel between 40-45% [1]. Group 2: Store Innovation - The company has launched 49 "super product" stores, which feature a wide range of products and a new display method that creates a sports lifestyle shopping experience, significantly enhancing customer attraction and sales [2]. - Each super product store can hold 700-800 SKUs, with 400-450 for apparel and 250-300 for footwear, and aims to provide a one-stop shopping experience [2]. Group 3: Product Innovation - 361 Degrees is focusing on "technology-enabled product innovation," introducing new products in various categories, including running shoes and basketball shoes, to meet diverse consumer needs [3]. - The brand is enhancing its visibility through sponsorships and promotional events, including a partnership with the Qingdao Marathon and a promotional tour by global brand ambassador Nikola Jokic [3]. Group 4: Market Positioning - The company has over 20 years of experience in the sports industry and is enhancing its product, brand, and channel strategies to achieve faster growth than the industry average, particularly in lower-tier markets [4]. - The profit forecast for 2025-2027 is set at 1.3 billion, 1.45 billion, and 1.58 billion yuan, corresponding to PE ratios of 7, 7, and 6 times, indicating a positive outlook for the company's future [4].

Investment Rating - The report maintains a "Buy" rating for the company [2] Core Insights - The company reported strong second-quarter performance, with offline retail for adult and children's apparel achieving approximately 10% growth, and e-commerce sales increasing by about 20%, reflecting the effectiveness of its high-quality products and improved operational capabilities [6][7] - The inventory level remains healthy with a stock-to-sales ratio of 4.5-5 times, and discount rates are stable, indicating robust operational quality [6] - The company is innovating in retail operations with the rollout of its "super product stores," which are designed to enhance customer experience and drive sales [6] - The company continues to deepen its product innovation strategy, launching popular items across various sports categories, which is expected to sustain growth [6] - Brand building efforts are ongoing, with high-profile sponsorships and events aimed at increasing brand visibility and engagement [6] - The company has been enhancing its operational efficiency and brand positioning, which is expected to lead to market share growth and outperform the industry [6] Financial Data and Profit Forecast - Projected revenue growth from RMB 84.23 billion in FY2023 to RMB 134.5 billion in FY2027, with a CAGR of approximately 12% [3][17] - Expected net profit growth from RMB 9.6 billion in FY2023 to RMB 15.8 billion in FY2027, with a CAGR of about 13% [3][17] - Earnings per share are projected to increase from RMB 0.46 in FY2023 to RMB 0.76 in FY2027 [3][17] - The company maintains a stable gross margin, projected to rise from 41.1% in FY2023 to 41.9% in FY2027 [3][17]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company continues to lead the mass sports sector with strong revenue growth in Q2, achieving a 10% increase in both adult and children's apparel sales in offline channels, and a 20% growth in e-commerce sales [1][4] - The company is actively launching new products across various categories to capture market demand, including running shoes, basketball shoes, and children's footwear [2] - The company is expanding its brand exposure through event sponsorships and the establishment of super stores, which are expected to enhance offline channel growth [3][4] Revenue and Profit Forecast - The company is projected to achieve revenues of 11.4 billion, 12.7 billion, and 14.2 billion yuan for the years 2025, 2026, and 2027, respectively, with corresponding net profits of 1.31 billion, 1.47 billion, and 1.65 billion yuan [4][5] - The expected growth rates for revenue are 13%, 12%, and 11% for the years 2025, 2026, and 2027, while net profit growth rates are projected at 14%, 12%, and 12% for the same years [4][5] Market Position and Strategy - The company is positioned as a high-cost performance leader in the mass sports market, with rapid expansion of super stores anticipated to drive future growth [4] - The company maintains a stable operating quality with a retail discount rate of 30% and a stock turnover ratio of 4.5-5.0X [1][4]

Group 1: Market Overview - The Hong Kong stock market has seen a continuous rise, with the Hang Seng Index closing at 24,590 points, up 386 points or 1.60% [2] - The trading volume in the main board increased significantly to HKD 288.4 billion, a rise of 37.1% compared to the previous day [2] - Northbound trading maintained a net inflow status, with a net inflow of HKD 3.824 billion, although this was a decrease of 53.6% from the previous day [2] Group 2: Sector Performance - Among the 12 Hang Seng Composite Industry Indices, 8 sectors rose while 4 fell, with consumer discretionary, healthcare, and information technology leading the gains, rising between 2.48% and 3.72% [3] - The sectors that experienced declines included energy, consumer staples, real estate, and industrials, with decreases ranging from 0.09% to 0.47% [3] Group 3: Company Analysis - 361 Degrees (1361.HK) - The company reported a robust performance in Q2 2025, with its main brand and children's clothing lines both achieving approximately 10% growth in offline sales, while e-commerce sales surged by about 20% [6] - The company continues to innovate with new product launches across various categories, including running shoes and basketball shoes, enhancing consumer choice [6] - 361 Degrees is actively expanding its superstore concept, with plans to increase the number of superstores from 49 to an estimated 80-100 by the end of the year, aiming for an annual store efficiency of nearly HKD 10 million [7] Group 4: Investment Recommendations - The company has a strong focus on high cost-performance and functional product development, with a positive outlook on new store formats contributing to revenue growth [7] - Earnings per share (EPS) forecasts for 2025-2027 are projected at HKD 0.60, HKD 0.69, and HKD 0.76, with a target price of HKD 6.6 based on a 10x PE ratio for 2025, maintaining a "Buy" rating [7]

Core Viewpoint - CICC maintains the EPS forecast for 361 Degrees (01361) at 0.64/0.72 HKD for 2025/26, with a target price of 5.62 HKD, indicating a 14% upside potential from the current stock price [1] Group 1: Financial Performance - In Q2 2025, the main brand and children's clothing offline revenue grew by approximately 10% year-on-year, while online revenue increased by about 20% [2] - Retail discounts remained stable at around 71%, and the inventory-to-sales ratio was in the range of 4.5 to 5 times [2] Group 2: New Store Formats - The company opened 39 new 361 Degrees Super Stores in cities like Guangzhou, Changsha, Tianjin, Shanghai, and Dalian, bringing the total to 49 by the end of June 2025 [3] - Approximately 6% of the Super Stores are located in first-tier cities, 40% in second-tier cities, and 54% in third-tier cities and below, with 55% of stores in shopping malls and department stores [3] Group 3: Product Innovation and Marketing - The company continues to implement a strategy of "technology-driven product innovation," launching various new running shoes and expanding its sports product matrix [4] - The company sponsored the 2025 Qingdao Marathon and enhanced brand visibility through targeted marketing efforts, which increased product attention [4]