Macro Strategy - The report indicates that structural "targeted interest rate cuts" have been implemented, and there is still room for "reserve requirement ratio (RRR) cuts and interest rate cuts" in 2026, especially if the RMB exchange rate and bank net interest margins remain stable [1][2][9] - It is expected that monetary policy in 2026 will be adjusted based on economic and financial conditions, with specific timing to be determined through comprehensive assessment [2][9] Fixed Income and Industry Analysis Industry Overview: Spandex - As of January 15, 2026, the price of spandex in China is 23,000 yuan/ton, with a price difference of 10,864 yuan/ton, indicating a high price percentile since 2018 [3][5] - The spandex industry is nearing the end of capacity expansion, and the elimination of outdated capacity is expected to improve industry conditions [3] - By the end of 2025, China's spandex capacity is projected to be 1.44 million tons/year, with an industry operating rate of 85% [3] - The industry concentration is high, with the top five companies holding 84% of the market share, indicating a significant head effect [3] - Demand for spandex is expected to grow rapidly, with a CAGR of 11% from 2017 to 2024, driven by its applications in textiles and hygiene products [5] Company Analysis: Huafeng Chemical - Huafeng Chemical is expected to maintain a spandex capacity of 400,000 tons/year by the end of 2025, with an additional 75,000 tons/year capacity expected to be gradually put into production by the end of 2026 [5] - The company is positioned to benefit from the anticipated improvement in industry conditions due to capacity elimination and increasing demand [5] Company Analysis: Xinxing Chemical Fiber - Xinxing Chemical Fiber is projected to have a spandex capacity of 220,000 tons/year by the end of 2025, with plans for an additional 100,000 tons/year capacity, with the first phase expected to start construction in Q1 2026 [5] - The company is also expected to benefit from the industry's recovery as outdated capacities are phased out [5] Company Analysis: Taihe New Materials - Taihe New Materials is expected to have a spandex capacity of 100,000 tons/year by the end of 2025, contributing to the overall industry capacity and benefiting from the anticipated demand growth [5]

Group 1: Market Overview - The Hong Kong stock market experienced a decline, with the Hang Seng Index falling by 0.28%, the Hang Seng China Enterprises Index down by 0.52%, and the Hang Seng Tech Index decreasing by 1.35% [2] - The total market turnover was HKD 290.455 billion, with short selling amounting to HKD 35.078 billion, representing 13.62% of the total turnover [2] - Southbound capital saw a net outflow of HKD 1.515 billion, with Alibaba, Tencent, and SMIC being the most bought stocks, while China Mobile, Xiaomi, and CNOOC faced the most selling pressure [2] Group 2: Sector Performance - The AI healthcare and internet healthcare sectors faced adjustments, with notable declines in stocks such as Jingtai Holdings down 10.74% and Alibaba Health down 7.84% [2] - The OTA platform Trip.com Group saw a significant drop of 19.23% due to an investigation by the State Administration for Market Regulation for alleged monopolistic behavior [3] - The optical communication sector performed well, with stocks like Huiju Technology rising by 8.89% and Cambridge Technology increasing by 7.75% [3] Group 3: Monetary Policy and Economic Measures - The People's Bank of China announced a series of targeted monetary easing measures, including a structural interest rate cut of 0.25 percentage points, aimed at reducing financing costs in specific sectors [4] - A total of CNY 1 trillion was allocated to support private enterprises, with an additional CNY 500 billion specifically for small and medium-sized private companies [4] - The bank also increased the quota for technology innovation and technical transformation loans by CNY 400 billion, bringing the total to CNY 1.2 trillion [4] Group 4: Company Analysis - 361 Degrees - 361 Degrees reported better-than-expected performance with offline retail growth of approximately 10% for both its main brand and children's clothing [7] - The company continues to see strong growth in e-commerce, achieving high double-digit growth rates [7] - The launch of new products across various categories, including running, basketball, and outdoor gear, reflects the company's commitment to innovation and brand development [8] Group 5: Investment Outlook for 361 Degrees - The company is expected to benefit from the introduction of new store formats, which will contribute positively to its performance [9] - The forecast for EPS from 2025 to 2027 is projected at CNY 0.60, CNY 0.69, and CNY 0.76, respectively, with a target price of HKD 7.6 based on a 10x PE ratio for 2026 [9]

Core Viewpoint - 361 Degrees reported a solid operational performance in Q4 2025, with both the main brand and children's clothing achieving approximately 10% year-on-year growth in offline retail sales, continuing a steady growth trend despite high comparatives from the previous year [1] Offline Performance - In Q4 2025, the main brand and children's clothing achieved approximately 10% year-on-year growth in offline retail sales, maintaining growth rates similar to Q3 2025 [1] - New product launches in running, basketball, and outdoor categories have driven sales, with notable products including the "Flying Burn 5" running shoes and signature shoes from Nikola Jokic and Aaron Gordon [1] - The company expects low-tier cities to remain a significant growth driver, with over 75% of sales in adult apparel and over 65% in children's clothing coming from these areas [1] - The introduction of "super stores" is expected to enhance customer acquisition and sales performance, with 126 super stores established in mainland China by Q4 2025, including 21 for children's clothing [1] E-commerce Performance - In Q4 2025, the e-commerce platform recorded high double-digit growth in overall sales, continuing a strong performance from the previous year [2] - The company accelerated its instant retail strategy, with 1,000 stores joining Taobao Flash Sale, enhancing retail efficiency and consumer experience [1] Inventory and Financial Outlook - The terminal discount rate is expected to remain stable at 7.0-7.1, with a healthy inventory turnover ratio of 4.5-5.0 times [2] - The company anticipates improved cash flow performance year-on-year due to ongoing efforts in accounts receivable recovery and inventory management [2] - For 2026, the company expects steady growth in order volume and further improvement in retail discounts, leading to enhanced operational quality [2] Profit Forecast and Valuation - The company maintains net profit forecasts of 1.31 billion, 1.49 billion, and 1.66 billion yuan for 2025-2027 [2] - A target price of 8.0 HKD is set based on a target PE of 10.1x for 2026, reflecting a discount due to the brand's current scale and market share compared to peers [2]

Core Viewpoint - The company maintains a "buy" rating for 361 Degrees (01361), highlighting its deep commitment to the sports industry for over 20 years and recent acceleration in product, brand, and channel enhancements, which are expected to drive growth above industry averages and increase market share [1] Group 1: Financial Performance - In Q4 2025, the retail sales of adult and children's apparel increased by approximately 10% year-on-year, continuing the growth trend from previous quarters, with e-commerce sales showing high double-digit growth, outperforming expectations [2] - The discount rate remained stable at 7-7.1, consistent with Q3 trends, and the inventory turnover ratio was maintained at a healthy level of 4.5-5 times, indicating robust operational conditions [3] Group 2: Store Expansion - The number of super stores reached 126 by December 31, 2025, exceeding expectations, with the first overseas super store opening in Cambodia, marking a significant step in international expansion [4] - Super stores, with sizes ranging from 800 to 1200 square meters, have a customer acquisition rate of 60%-70% and a higher sales rate compared to traditional stores, while also reducing operational costs [4] Group 3: Product Development and Marketing - The company focuses on high-quality, rapid product iteration and competitive pricing, launching new products in the running and basketball categories, including the "Flying Burn 5" and signature shoes for athletes, which have shown strong sales conversion [5] - Marketing efforts include strategic partnerships with the Asian Olympic Council and other organizations to enhance brand visibility and support international sports events [5] Group 4: Outdoor Market Strategy - The One Way brand, established in Finland, is being repositioned to capitalize on the outdoor trend, with new store openings and a product line adjustment to meet current market demands [6] - Plans for 2026 include launching more footwear and women's products to tap into the growing outdoor market, potentially creating a second growth curve for the company [6]

Core Viewpoint - The report from Shenwan Hongyuan maintains a "Buy" rating for 361 Degrees (01361), highlighting the company's deep engagement in the sports industry for over 20 years and its accelerated efforts in product, brand, and channel development, which are expected to yield growth faster than the industry average [1] Group 1: Financial Performance - In Q4 2025, 361 Degrees' adult and children's offline retail sales both grew by approximately 10% year-on-year, continuing the growth trend from the previous three quarters, with e-commerce sales showing high double-digit growth, exceeding expectations [1] - The discount rate remained stable at 7-7.1, consistent with the trend from Q3, and the inventory-to-sales ratio maintained a healthy level between 4.5-5 times, indicating robust overall operational conditions [2] Group 2: Store Expansion - As of December 31, 2025, the number of super stores reached 126 (including 21 children's stores), with the opening pace exceeding expectations. The first overseas super store opened in Cambodia, marking a new step in international expansion [3] - Super stores have significant advantages, with store sizes ranging from 800-1200 square meters (equivalent to 5 regular stores), a customer acquisition rate of 60%-70%, and a 50% presence in first- and second-tier cities, effectively complementing traditional stores that mainly cover lower-tier markets [3] Group 3: Product Development and Marketing - The company emphasizes high-quality rapid product iteration and a high cost-performance ratio. New products include the "Feiran 5" and "Feiran 5 FUTURE" in the running category, and the "AG6" and "JOKER2" basketball shoes, leveraging athlete endorsements for strong sales conversion [4] - Marketing efforts include a strategic partnership with the Asian Olympic Council and collaborations with aerospace technology and sports research institutions, as well as becoming the official supplier for the 2025 WTCC World Tennis Continental Championship [4] Group 4: Outdoor Market Strategy - The One Way brand, established in Finland, focuses on winter sports and cycling equipment. 361 Degrees has increased its stake in the brand to 100% and is adjusting its product line to align with the current outdoor trend, opening 6 new stores in Q4 [5] - The new stores, approximately 100-120 square meters in size, offer around 120 SKUs, targeting professional skiing and outdoor products with competitive pricing compared to international brands, aiming to establish a second growth curve in the outdoor market [5]

Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of HKD 8.00 [1][9]. Core Insights - The company has demonstrated robust growth in retail sales, with both the main brand and children's clothing achieving approximately 10% year-on-year growth in 4Q25, continuing a steady growth trend despite high base effects [1][11]. - E-commerce sales recorded a high double-digit growth in 4Q25, indicating strong performance in online channels [7][11]. - The company is enhancing its brand power through innovative products and marketing strategies, including the introduction of "super stores" to upgrade channel efficiency and expand international presence [5][11]. Summary by Sections Operational Performance - In 4Q25, the main brand and children's clothing retail sales both achieved approximately 10% year-on-year growth, maintaining a steady growth trend [1][11]. - The e-commerce platform saw overall sales achieve high double-digit year-on-year growth, continuing a solid performance [7][11]. Product and Marketing Strategy - The company launched new products in various categories, including running, basketball, and outdoor gear, which have received significant market attention [6]. - The introduction of "super stores" is expected to enhance customer acquisition and sales efficiency, with a notable increase in new customer ratios [6]. Financial Projections - Revenue is projected to grow from RMB 10,074 million in 2024 to RMB 14,019 million by 2027, with a compound annual growth rate (CAGR) of approximately 10.30% [4]. - Net profit is expected to increase from RMB 1,149 million in 2024 to RMB 1,655 million by 2027, reflecting a steady growth trajectory [4]. Valuation Metrics - The company is assigned a target PE of 10.1x for 2026, with a target price of HKD 8.00, reflecting a discount compared to comparable companies due to its current brand scale and market share [9][13].

Market Overview - The domestic market indices showed a decline, with the Shanghai Composite Index closing at 4,138.76, down 0.64% [4] - The CSI 300 Index experienced a decrease of 0.60%, closing at 4,761.03 [4] Agricultural Sector Insights - The agricultural sector reported a weekly performance with the CSI 300 Index increasing by 2.79% and the agriculture sector rising by 0.98%, ranking 28th among sectors [6] - Pig prices increased week-on-week, with average prices for external three yuan pigs in Sichuan, Guangdong, and Henan at 13.10, 12.86, and 12.93 CNY/kg respectively, showing a mixed trend [6] - The average pork price was 17.97 CNY/kg, up 1.18% from the previous week, while the average wholesale price for piglets rose by 6.45% to 16.50 CNY/kg [6] - The self-breeding and self-raising profit margin was -11.54 CNY per head, a reduction of approximately 23.05 CNY per head from the previous week [6] - The report suggests focusing on Hai Da Group due to favorable conditions in the feed industry and its competitive advantages in the market [6] Livestock Industry Trends - The pig farming industry has entered a loss phase, prompting a new round of capacity reduction driven by market forces and policy adjustments [6] - The number of breeding sows is expected to decrease rapidly, indicating a trend towards capacity reduction in the first half of the year [6] - Companies such as Wen's Foodstuffs, Shennong Group, and New Hope are recommended for investment due to their potential recovery in fundamentals and valuations [6] Poultry Sector Developments - Shengnong Development's breeding chicken business is progressing steadily, with cost control measures leading to reduced production costs [6] - The company is enhancing its revenue structure by increasing its presence in high-value channels [6] Pet Food Market Outlook - The pet food sector is anticipated to continue growing, with increasing penetration rates in pet ownership [6] - The competition is shifting from marketing to research and supply chain efficiency, suggesting a focus on brands that prioritize R&D [6] Coal Industry Analysis - The coal market is maintaining normal production levels, with a gradual recovery in supply as coal mines resume operations [8] - The demand from downstream sectors remains limited, leading to a stable but weak market outlook [8] - Investment recommendations include companies like Yanzhou Coal Mining, Shaanxi Coal and Chemical Industry, and China Shenhua Energy, with a focus on potential recovery in Q4 performance [8]

Core Viewpoint - 361 Degrees has reported a year-on-year retail revenue growth of approximately 10% for both its main brand and children's clothing in Q4 2025, with e-commerce sales also showing high double-digit growth [1] Group 1: Operational Performance - In Q4 2025, the offline growth rate for the main brand and children's line remained stable compared to Q3 2025, both achieving around 10% year-on-year growth [1] - Online sales growth showed a slight slowdown compared to Q3 2025, where e-commerce revenue grew by approximately 20% year-on-year [1] Group 2: Product Development - 361 Degrees continues to emphasize a "technology-first, brand-first" strategy, launching new products in various categories, including running shoes, basketball shoes, outdoor gear, and women's fitness apparel [1] - Notable product launches include the new racing family models Flyburn 5 and Flyburn 5 FUTURE, as well as the upgraded Speed family and the high-performance trail running shoe Lingci 1 [1] - In the basketball segment, the second signature shoe "JOKER2" for Nikola Jokic and the sixth signature shoe AG6 for Aaron Gordon were introduced, featuring advanced technologies to enhance performance [1] Group 3: Brand Building and Partnerships - 361 Degrees announced a strategic partnership with the Asian Olympic Council and deepened collaborations with Tianjin Sports Institute and other organizations to promote sports development [1] - The company showcased its low-carbon environmentally friendly running shoes at the China International Import Expo, highlighting its commitment to sustainability [1] Group 4: Event Sponsorships - 361 Degrees has been designated as the official supplier for the 2025 WTCC World Tennis Intercontinental Challenge and continues its role as a top strategic partner for the Fuzhou Marathon [2] - The brand's ambassadors achieved significant victories in various marathons, enhancing brand visibility and engagement [2] Group 5: Channel Development - The company is accelerating its e-commerce strategy, with over a thousand stores joining Taobao Flash Sale, and has opened its first overseas superstore in Cambodia [3] - As of December 31, 2025, the total number of super stores in mainland China reached 126, indicating a strong retail network expansion [3] Group 6: Investment Outlook - Short-term benefits are expected from the consumption downgrade trend, with strong sales performance in running shoes and basketball shoes [4] - The opening of super stores is anticipated to contribute positively to store efficiency and revenue growth in the coming years [4] - The company maintains revenue forecasts of 11.616 billion, 13.353 billion, and 15.317 billion yuan for 2025, 2026, and 2027 respectively, with corresponding net profits of 1.395 billion, 1.630 billion, and 1.873 billion yuan [4]

Core Viewpoint - 361 Degrees demonstrates strong growth across various channels in Q4 2025, with adult and children's apparel both achieving approximately 10% growth in offline sales, and e-commerce showing high double-digit growth, aligning with expectations [1][2][3] Group 1: Adult Apparel - Offline sales for adult apparel increased by about 10% year-on-year in Q4 2025, supported by a brand strategy focused on "technology first, brand foremost" [1] - The company launched several flagship technology products in the running category, including the "Feiran 5" and "Feiran 5 FUTURE," along with upgraded models like "Supai FLOAT3" and "Supai CQT3," enhancing cushioning and protection [1] - In the basketball segment, the second-generation signature shoe "JOKER2" and the sixth-generation "AG6" were launched, while the brand also expanded its offerings in outdoor, women's fitness, and cross-training categories [1][2] Group 2: Brand Development - 361 Degrees aims to enhance its influence in multiple sports by renewing its strategic partnership with the Asian Olympic Council and becoming the official supplier for the 2025 WTCC World Tennis Intercontinental Challenge [2] - The brand's ambassador, Li Zicheng, won championships and set records at the Fuzhou and Tangshan marathons, validating the market competitiveness of its professional racing gear [2] Group 3: Channel Expansion - The number of 361 Degrees super stores in mainland China reached 126 by December 31, 2025, contributing significantly to retail efficiency and overall growth [2] - The first overseas super store opened in Cambodia, marking a substantial step in the brand's international retail expansion [2] Group 4: Children's Apparel - Children's apparel sales also grew by approximately 10% year-on-year in Q4 2025, with the introduction of the "Zhengtu 1.0" lightweight outdoor shoes featuring advanced technology [2] Group 5: E-commerce Growth - E-commerce sales recorded high double-digit growth in Q4 2025, with a thousand stores joining Taobao Flash Sale, initiating a new instant retail strategy that enhances delivery efficiency and consumer experience [3] Group 6: Financial Outlook - The company anticipates a 9.5% growth in net profit attributable to shareholders in 2025, with an expected revenue growth of 11.4% [3] - Projections for net profit from 2025 to 2027 are estimated at 1.258 billion, 1.397 billion, and 1.571 billion yuan respectively, with a PE ratio of 8 times for 2026 [3]

Core Viewpoint - The company demonstrates strong growth momentum in Q4 2025, with both adult and children's apparel retail sales increasing by approximately 10% year-on-year, alongside high double-digit growth in e-commerce, despite a general industry slowdown [1] Group 1: Financial Performance - In Q4 2025, the company's retail sales for adult and children's apparel grew by around 10% year-on-year, continuing the growth trend from the previous three quarters [1] - E-commerce sales experienced high double-digit growth, exceeding expectations [1] - The discount rate remained stable at 7-7.1, consistent with Q3 trends, and the inventory turnover ratio was maintained at a healthy level of 4.5-5 times [1] Group 2: Store Expansion - The expansion of super stores exceeded expectations, with a total of 126 super stores (including 21 children's stores) by December 31, 2025 [2] - The first overseas super store opened in Cambodia, marking a significant step in international expansion [2] - Super stores, with an area of 800-1200 square meters, have a customer acquisition rate of 60%-70% and are expected to become the main focus for new store openings in 2026 [2] Group 3: Product Development and Marketing - The company focuses on high-quality, rapid product iteration, launching new products in the running and basketball categories, including the "飞燃5" and "AG6" shoes [3] - Strategic partnerships have been established with organizations such as the Asian Olympic Council and Tianjin Sports University to enhance brand visibility and marketing efforts [3] - The company has become the official supplier for the 2025 WTCC World Tennis Continental Challenge, further promoting its brand in international sports [3] Group 4: Outdoor Market Strategy - The One Way brand, established in Finland, is being repositioned to capitalize on the outdoor trend, with new product lines and six new stores opened in Q4 [4] - The company plans to introduce more footwear and women's products in 2026, aiming to create a second growth curve in the outdoor market [4] Group 5: Long-term Outlook - The company has over 20 years of experience in the sports industry and is enhancing its product, brand, and channel strategies [5] - With a focus on high cost-performance and functionality, the company is expected to achieve growth faster than the industry average, increasing market share [5] - Profit forecasts for 2025-2027 are projected at 1.26 billion, 1.39 billion, and 1.51 billion yuan, with corresponding P/E ratios of 9, 8, and 7 [5]