Investment Rating - The investment rating for the company is "Buy" (maintained) [1][9]. Core Insights - The company has shown strong performance in Q2 2025, with a 10% year-on-year increase in retail sales for its main brand and children's clothing, and a 20% increase in overall e-commerce sales [5][8]. - The company has successfully expanded its new retail format, with 49 stores opened by H1 2025, enhancing operational efficiency and customer experience [5][8]. - The company continues to innovate and launch new products to meet diverse market demands, particularly in the running and basketball segments [5][8]. Summary by Sections Financial Performance - In Q2 2025, the main brand's retail sales increased by 10%, children's clothing retail sales also rose by 10%, and e-commerce platform sales grew by 20% [5]. - During the "618" shopping festival, the company's e-commerce sales surged by 94%, ranking third among domestic brands [5]. Retail Expansion - The company has accelerated the expansion of its new retail format, with 49 stores opened, including 45 large stores and 4 children's clothing stores [5]. - The stores offer a comprehensive range of products and utilize a self-service shopping model to enhance customer convenience [5]. Product Innovation - The company has launched several new products, including the "Flying Speed FUTURE2" running shoes and the "Qianxing 1.0" training shoes, focusing on high cost-performance ratios [5][8]. - New product lines in basketball and cycling have also been introduced, catering to various consumer needs [5][8]. Financial Projections - Projected revenue for 2025 is 11,332.7 million RMB, with a growth rate of 12.5% [7]. - Expected net profit for 2025 is 1,294.5 million RMB, reflecting a growth rate of 12.7% [7].

Core Insights - 361° is expanding into the badminton market, showcasing its new professional badminton shoe "Victory PRO" during a city tournament called "One Shot, One Match" in Dongguan, Guangdong [1] - The company achieved a record revenue of 10.07 billion yuan in 2024, a year-on-year increase of 19.6%, with a net profit of 1.149 billion yuan, also up by 19.5% [1] - Despite reaching the 10 billion yuan revenue mark, 361°'s profitability remains low, with a gross margin of only 41.5%, significantly lower than competitors like Anta (62.2%) and Li Ning (49.4%) [1] Financial Performance - 361°'s revenue for 2024 is reported at 10.07 billion yuan, marking a 19.6% increase from the previous year [1] - The net profit for the same period is 1.149 billion yuan, reflecting a 19.5% year-on-year growth [1] - The company's gross margin stands at 41.5%, which is considerably lower than its main competitors [1] Market Strategy - 361° is diversifying its product offerings by entering the badminton segment, which is seen as a potential growth area due to its popularity in China, with 250 million participants [2][4] - The company aims to leverage its existing technology from running and basketball shoes to develop badminton shoes and rackets [4] - 361° is adopting a low-price strategy to penetrate the badminton market, with its best-selling rackets priced under 50 yuan, targeting mass consumers and lower-tier markets [9] Competitive Landscape - The badminton equipment market is dominated by three major brands: YONEX, VICTOR, and Li Ning, which collectively hold over 60% of the online market share [6][9] - YONEX, for instance, has a strong brand presence, with its high-end rackets and shuttlecocks commanding premium prices in the market [6][9] - 361° faces challenges in gaining market share due to the established dominance of these brands and their strong association with top athletes and events [9] Brand Positioning - 361° is focusing on grassroots engagement by organizing local tournaments and avoiding high-profile endorsements at this stage [10] - The company has positioned itself to appeal to a broader audience by creating accessible events and products, differentiating itself from competitors who target elite athletes [10] - The brand's current approach is cautious, with limited investment in large-scale events or sponsorships, indicating a wait-and-see strategy in the badminton market [10]