CICC maintains "outperform" rating on 361 Degrees (01361), with a target price of 5.2 Hong Kong dollars.

Zhongjin Securities released a research report stating that it maintains the "Outperform Industry" rating for 361 DEGREES (01361), with unchanged earnings per share (EPS) forecast for 2024/25 of 0.52/0.60 yuan and introducing a forecast of 0.68 yuan for 2026 EPS. Valuation switches to 2025, maintaining a target price of 5.2 Hong Kong dollars. The company announced the operating situation for 4Q24: 361 DEGREES main brand offline retail sales increased by approximately 10% year-on-year, 361 DEGREES children's wear offline retail sales increased by 10-15% year-on-year, and 361 DEGREES e-commerce platform retail sales increased by 30-35% year-on-year. The main points of Zhongjin Securities are as follows: Healthy growth in offline sales in 4Q24. 361 DEGREES main brand offline retail sales in 4Q24 increased by approximately 10% year-on-year, with good performance driven by sales seasons such as National Day and Double Eleven in October and November, and some impact on sales in December due to the weather. The company adheres to the principle of technology-driven product innovation, with core products such as the "Fly Fuel" running series and the "Joker" basketball series performing well, and further enriching the down and outdoor categories. 361 DEGREES children's wear offline retail sales in 4Q24 increased by 10-15% year-on-year, as the company continues to strengthen brand endorsement and product innovation, and strengthens cooperation with youth sports clubs and professional sports teams. Although industry competition was fierce during the quarter, the average retail discount for 361 DEGREES main brand and children's wear offline in 4Q24 was around 70-73%, showing stable performance compared to the previous quarter. As of the end of December, the company's inventory-to-sales ratio was 4.5-5x, maintaining at a relatively healthy level. Online sales growth accelerates quarter-on-quarter on a high base. Although online competition was fierce in 4Q24, 361 DEGREES e-commerce platform retail sales continued to achieve fast growth on a high base, with a year-on-year increase of 30-35% in 4Q24 (more than 30% compared to 4Q23), with a quarterly acceleration. The company continues to deepen the development of e-commerce channels, enhance publicity and exposure around core products, expand off-site promotion efforts, and drive traffic to e-commerce platforms through multiple channels. Partnerships with important events and KOLs, good outlook for 2025. In 4Q24, the company successfully sponsored strategic partners in marathons such as Fuzhou, Putian, and Beijing, and also collaborated with some professional athletes and top KOLs to launch co-creation series, further enhancing brand influence and professional visibility. Looking ahead to 2025, as the official partner of the 2025 Harbin Asian Winter Games, 361 DEGREES is expected to further increase brand exposure and recognition. Management indicated that the performance at the spring, summer, and autumn three-season ordering fairs for 2025 has been good, mainly contributing to volume growth, and there have also been some additional orders since 4Q24. Risks End-point retail environment underperforms expectations, industry competition intensifies, and raw material prices fluctuate.