Core Viewpoint - 361 Degrees reported a solid performance in the first half of 2025, with revenue and net profit increasing by 11.0% and 8.6% year-on-year, respectively, indicating a positive growth trajectory for the company [1][2]. Financial Performance - The company achieved a revenue of 5.7 billion yuan and a net profit of 0.86 billion yuan in H1 2025, with an EPS of 0.42 yuan and a proposed interim cash dividend of 0.204 HKD per share, resulting in a payout ratio of 45.0% [1]. - Gross margin improved by 0.2 percentage points to 41.5%, while operating margin and net profit margin decreased by 0.7 and 0.3 percentage points to 19.9% and 15.0%, respectively [1][2]. - Revenue from the main brand (offline channels) grew by approximately 10-15%, while e-commerce revenue surged by 35-40% [1]. Revenue Breakdown - Adult and children's clothing revenue increased by 8.2% and 10.0%, respectively, with online sales growing by 45.0% and offline sales remaining flat [1][2]. - The revenue contribution from adult clothing, children's clothing, and other categories was 73.2%, 21.6%, and 5.2%, respectively, with significant growth in adult footwear and children's footwear [1][2]. Channel Performance - Online and offline revenue contributions were 31.8% and 68.2%, respectively, with online sales growing by 45.0% and offline sales remaining stable [2]. - As of June 2025, the company operated 5,669 stores in mainland China and 1,357 overseas, with a slight decrease in the number of stores compared to the beginning of the year [2]. Inventory and Cash Flow - Inventory as of June 2025 was 1.89 billion yuan, a decrease of 10.5% from the beginning of the year, while accounts receivable increased by 7.2% to 4.66 billion yuan [3]. - Operating net cash flow for H1 2025 was 0.52 billion yuan, reflecting a significant increase of 227.2% year-on-year, driven by profit growth and reduced inventory [3]. Strategic Developments - The company is focusing on enhancing its brand competitiveness and expanding into new sports categories, including fitness and yoga [3]. - The launch of new products and the establishment of super stores are part of the strategy to strengthen brand image and improve customer experience [3].

Core Viewpoint - The company reported a steady growth in revenue and net profit for the first half of 2025, indicating a positive performance despite challenges in the retail environment [3][4]. Financial Performance - In the first half of 2025, the company achieved a revenue of 5.7 billion yuan, a year-on-year increase of 11.0%, and a net profit attributable to shareholders of 0.86 billion yuan, up 8.6% year-on-year [3]. - The earnings per share (EPS) stood at 0.42 yuan, with a proposed interim cash dividend of 0.204 HKD per share, resulting in a payout ratio of 45.0% [3]. - The gross profit margin improved by 0.2 percentage points to 41.5%, while the operating profit margin and net profit margin saw slight declines [3][6]. Revenue Breakdown - Adult and children's clothing revenue grew by 8.2% and 10.0% respectively, with online sales increasing by 45.0% while offline sales remained flat [4]. - The revenue contribution from adult clothing, children's clothing, and other categories was 73.2%, 21.6%, and 5.2% respectively, with significant growth in the other category [4]. - Online sales accounted for 31.8% of total revenue, while offline sales made up 68.2% [4]. Channel and Store Expansion - As of June 2025, the company operated 5,669 stores in mainland China and 1,357 overseas, with a slight decrease in the number of stores compared to the beginning of the year [5]. - The company has also opened 49 super stores, including 4 dedicated to children's products [5]. Cost Management and Cash Flow - The company managed to reduce inventory by 10.5% from the beginning of the year, while the operating net cash flow increased significantly by 227.2% year-on-year [6][7]. - The period expense ratio slightly increased to 24.1%, with advertising and market promotion expenses accounting for 10.1% of revenue [7]. Brand Development and Market Positioning - The company has been focusing on enhancing its brand competitiveness by launching new products and entering emerging sports markets [8]. - In July 2025, the company became a global partner of the World Swimming Federation, which is expected to enhance its global brand influence [8].

Investment Rating - The report maintains a "Buy" rating for the company 361 Degrees (1361.HK) [1] Core Views - The company achieved steady growth in the first half of 2025, with revenue and net profit attributable to shareholders increasing by 11.0% and 8.6% year-on-year, respectively [3] - The company is focusing on enhancing its core competitiveness and expanding its new retail formats, including the successful rollout of super premium stores [9] - The online sales channel has shown rapid growth, while the offline channel is innovating with new retail formats to strengthen brand image [9] Financial Performance - For the first half of 2025, the company reported revenue of 5.7 billion HKD and a net profit of 0.86 billion HKD, with earnings per share (EPS) of 0.42 HKD [3] - The gross profit margin improved by 0.2 percentage points to 41.5%, while the operating profit margin and net profit margin decreased by 0.7 and 0.3 percentage points to 19.9% and 15.0%, respectively [3][7] - The company plans to distribute an interim cash dividend of 0.204 HKD per share, with a payout ratio of 45.0% [3] Revenue Breakdown - Revenue from the adult and children's apparel segments grew by 8.2% and 10.0% year-on-year, respectively, with online sales increasing by 45.0% while offline sales remained flat [5] - The company’s main brand and children's brand saw offline sales growth of 10-15% and approximately 10%, respectively, while e-commerce sales grew by 35-40% [4][12] Store Expansion - As of June 2025, the company operated 5,669 stores in mainland China and 1,357 overseas, with a total of 49 super premium stores opened [6] Cash Flow and Inventory - The company reported a significant increase in operating cash flow, which rose by 227.2% year-on-year to 0.52 billion HKD, primarily due to profit growth and a reduction in inventory [8] - Inventory as of June 2025 was 1.89 billion HKD, a decrease of 10.5% from the beginning of the year [8] Future Outlook - The company expects continued revenue growth, with projected earnings per share of 0.64, 0.72, and 0.81 HKD for 2025, 2026, and 2027, respectively [9][10] - The current stock price corresponds to a price-to-earnings (P/E) ratio of 8 times for 2025, 7 times for 2026, and 6 times for 2027 [9]

Core Viewpoint - 361 Degrees has demonstrated strong financial performance in the first half of 2025, achieving revenue of 5.705 billion yuan, a year-on-year increase of 11%, and a net profit of 858 million yuan, up 8.6%, while also enhancing shareholder returns with a dividend payout ratio of 45% [1][2]. Group 1: Financial Performance - 361 Degrees reported a revenue of 5.705 billion yuan for the first half of 2025, marking an 11% increase year-on-year [1]. - The net profit for the same period reached 858 million yuan, reflecting an 8.6% growth compared to the previous year [1]. - The company declared an interim dividend of 20.4 Hong Kong cents, with a payout ratio of 45% [1]. Group 2: Market Position and Competitive Advantage - In a challenging market environment, 361 Degrees stands out with a double-digit growth rate, while other major brands like Nike reported a 21% decline in sales in China [1][2]. - The company has successfully entered the first tier of Chinese sports brands, with revenue expected to exceed 10 billion yuan in 2024, enhancing its growth potential [1][2]. Group 3: Product Development and Innovation - 361 Degrees has launched over 230 new technology products in the first half of 2025, focusing on high quality-to-price ratio and a diverse product matrix [6][10]. - The company has introduced several innovative products across various sports categories, including running, basketball, cycling, and badminton, enhancing consumer experience [6][8]. Group 4: Brand Engagement and Emotional Connection - 361 Degrees has focused on building emotional resonance with consumers, enhancing brand loyalty through participation in major sports events and community engagement [11][12]. - The brand has established a strong presence in professional sports, sponsoring events and athletes, which has helped to strengthen its market recognition and consumer trust [16][19]. Group 5: Business Expansion and Globalization - The company is expanding its retail footprint with the introduction of "super premium" stores, aiming to enhance customer experience and operational efficiency [10][20]. - 361 Degrees has achieved significant growth in cross-border e-commerce, with a 94% year-on-year increase in sales, and has opened its first overseas store in Kuala Lumpur, marking a key step in its Southeast Asia expansion [24][25].

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].

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [4] Core Insights - The company has shown a steady growth in retail sales, with a 10% increase in both the main brand and children's clothing products in offline channels for Q2 2025 compared to the same period last year, and a 20% increase in overall e-commerce platform revenue [1] - The brand strategy upgrade has been effective, focusing on "technology-enabled product innovation" to meet diverse market demands, launching various new products across different sports categories [1] - The company is accelerating channel innovation through the "super store" strategy, having established 49 large-format stores by June 2025, significantly enhancing its market presence in key cities [1] Financial Projections - Revenue forecasts for 2025, 2026, and 2027 are projected at 11.3 billion RMB, 12.8 billion RMB, and 14.5 billion RMB respectively, with net profits expected to be 1.3 billion RMB, 1.4 billion RMB, and 1.6 billion RMB for the same years [3] - The earnings per share (EPS) are estimated to be 0.61 RMB, 0.69 RMB, and 0.79 RMB for 2025, 2026, and 2027 respectively, with corresponding price-to-earnings (PE) ratios of 8x, 7x, and 6x [3]

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]

Core Viewpoint - The company reported strong growth in its main brand's offline, children's clothing offline, and e-commerce sales, with year-on-year increases of approximately 10%, 10%, and 20% respectively, indicating robust performance in various sales channels [1] Group 1: Operational Performance - The company achieved a discount rate of approximately 7.1, maintaining relative stability in pricing [1] - The inventory turnover ratio for Q4 2024 is projected to be between 4.5 to 5 times, reflecting stable inventory management [1] - The new "361-degree Super Store" format was successfully launched, with 49 stores opened by mid-2025 and a target of 80-100 stores for the entire year [1] Group 2: Store Format and Location Strategy - The new super stores have a larger area of 900-1000 square meters and an increased SKU count of 700-800 compared to conventional stores, enhancing product variety [1] - The distribution of the newly opened super stores is 6% in first-tier cities, 40% in second-tier cities, and 54% in third-tier and below, indicating a strategic focus on urban expansion [1] - The layout includes 55% in department stores, 25% in outlet malls, and 20% in street shops, which is an increase in presence in first and second-tier cities and non-street shop formats [1] Group 3: Product Development and Market Position - The running and basketball categories continue to grow rapidly, with new product launches such as the "Fei Biao Future 2" racing shoes and "Kuang Biao 2" basketball shoes [1] - The company is enhancing its brand image through sponsorship of events like the Qingdao Marathon and hosting its own brand IP events [1] - New high-quality and cost-effective products have been introduced in badminton shoes, sun protection clothing, and women's tennis, contributing to rapid growth in these segments [1] Group 4: Financial Forecast and Investment Rating - The company is expected to maintain industry-leading growth rates by deepening its penetration in lower-tier markets and accelerating the opening of super stores [2] - The projected net profits for 2025-2027 are 1.3 billion, 1.46 billion, and 1.62 billion respectively, with corresponding PE ratios of 7, 6, and 6 times [2] - The investment rating is maintained at "Buy" based on the company's growth strategy and market performance [2]

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]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is successfully expanding its "super premium store" format, maintaining its leading position in the market [8] - The company has achieved significant revenue growth, with total revenue projected to reach RMB 10,074 million in 2024, representing a year-on-year increase of 18.26% [1] - The company is focusing on high-quality and cost-effective new products, which is expected to drive continued industry-leading growth [8] Financial Projections - Total revenue (in million RMB) is forecasted as follows: - 2023: 8,518 - 2024: 10,074 (20.24% YoY) - 2025: 11,377 (18.26% YoY) - 2026: 12,653 (12.94% YoY) - 2027: 13,990 (10.57% YoY) [1] - Net profit attributable to the parent company (in million RMB) is projected as follows: - 2023: 961.43 - 2024: 1,148.62 (28.68% YoY) - 2025: 1,304.14 (19.47% YoY) - 2026: 1,457.57 (13.54% YoY) - 2027: 1,616.25 (10.89% YoY) [1] - The latest diluted EPS (in RMB) is expected to be: - 2023: 0.46 - 2024: 0.56 - 2025: 0.63 - 2026: 0.70 - 2027: 0.78 [1] - The P/E ratio is projected as follows: - 2023: 9.67 - 2024: 8.09 - 2025: 7.13 - 2026: 6.38 - 2027: 5.75 [1] Business Development - The company has opened 49 new "super premium stores" in the first half of 2025, with a target of 80-100 for the entire year [8] - The new store format has a significantly larger area (900-1000 square meters) and a higher SKU count (700-800) compared to regular stores, which is expected to enhance customer traffic and sales metrics [8] - The company is actively expanding in niche markets such as running and basketball, with new product launches and sponsorships to enhance brand image [8]