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].

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]

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1] Core Views - In Q2 2025, the main brand's offline retail revenue recorded approximately 10% growth, while the children's clothing brand also saw about 10% growth. E-commerce platforms experienced around 20% growth [2][3] - The company continues to introduce new products to meet diverse consumer demands and has expanded its super stores to 49 locations, with stable inventory and discount levels [3][5] Summary by Relevant Sections Revenue Growth - In Q2 2025, adult apparel offline revenue grew approximately 10%, children's apparel offline revenue also grew about 10%, and e-commerce revenue increased by around 20%, although the growth rate has slowed compared to previous quarters [4][5] Product Development - The company is actively launching competitive new products in various categories, including running shoes and basketball shoes. Notable new releases include the FUTURE 2 and Q弹超 6 running shoes, and the 禅 7 basketball shoes [5] Channel Expansion - The number of super stores has expanded to 49, with 39 new stores opened in Q2. The stores focus on comprehensive category coverage and a one-stop shopping experience, with an expected total of 80-100 new stores for the year [5][6] Inventory and Discount Management - The inventory-to-sales ratio remains stable at 4.5-5.0, with retail discounts around 71%, showing no significant year-on-year change and a slight increase quarter-on-quarter [6] Financial Forecast - The company maintains its profit forecast, expecting net profits of 1.3 billion, 1.46 billion, and 1.63 billion yuan for 2025-2027, representing year-on-year growth rates of 13.1%, 12.2%, and 11.8% respectively. The target price is maintained at 4.7-5.4 HKD, corresponding to a PE ratio of 7-8x for 2025 [8][9]