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◼️ In 2025Q1, the retail sales of 361o Core Brand/361o Kids Brand/361o E-commerce product grew at 10-15%/10-15%/35-40% yoy respectively.

◼️ Maintain BUY and TP of HK$5.60

Resilient retail sales in 2025Q1. We are impressed that the retail sales of both 361° and 361° Kids registered a 10-15% yoy growth under a higher yoy base. The company mentioned that the retail sales were robust in Jan. The sales become fluctuate in Feb. In Mar, the growth was not as robust as in Jan due to the seasonality effect and the weather condition. In 25Q1, the retail discount level slightly increased (~30% off) while the channel inventory level remained stable. The company mentioned that some wholesalers placed additional orders during the period. E-commerce shine with the active marketing and promotional events on Taobao and other e-commerce platforms, captialisating on the online sales spree of the Chinese New Year holiday.

Broadening product lines. 361° keeps refreshing its product offering with the integration of latest technology and fashion trends. The company upgraded a number of running shoe series and basketball shoe series, introducing “BIG3 6.0”, “SPIRE FLOAT 2” and ” Biospeed CQT 4 PRO” since the end of last year. In addition, 361° diversified the product offerings to better serve customers. For example, 361° introduced the spring ‘‘Ultra Series’’ apparel collection, featuring high-performance windbreakers, pullovers, and track pants, which is enhanced by its “Zero Constraint” technology and the windproof insulation technology. Moreover, it collaborates with Sichuan Jianmen Pass to launch its outdoor product line.

Sale channels. 361 Degrees coordinates online and offline stores, with dual emphasis on domestic and international markets. The company swiftly launched Super Premium Stores with across cities, including Huizhou, Chengdu, Shijiazhuang, Nanning, Jinan, Linyi, Yangzhou, and Anyang. Super Premium Store enhances shoppers experience with a large store area(800m2) and a more SKUs offering. For the overseas market, 361° opened its first directly operated overseas store in Kuala Lumpur. 361 Degrees said it focuses on markets in Southeast Asia and countries across the “Belt and Road”. In FY24, the company operated 1,365 POS in overseas. Overseas business accounted for 1.8% of the total revenue.

Earnings forecast. We maintain our earnings forecast for FY25E and FY26E, expecting the company to report an averagely 14.4% CAGR in EPS between FY25E and FY 26E.

Maintain BUY and TP of HK$5.60. The TP represents an FY25E PE of 8.2x (based on 1 s.d. above the 2-yr average PE ratio). This is to reflect a strong near-term growth outlook.

Risks: (1) Weakening retail market, (2) intensifying price competitions