CMBC International: 361 Degrees (01361) target price raised to HK$7.09, "Buy" rating.

CMB International has released a research report stating that 361 DEGREES (01361) performance in the first half of this year was slightly below expectations. In the view of the bank, although management has confirmed the 2025 fiscal year guidance, they are more concerned about its store opening plan, offline sales growth, and inventory levels. However, due to 361 DEGREES having a relatively lower valuation compared to its peers, and with retail sales growth outperforming peers in the first half of this year, CMB International maintains a "buy" rating on the stock and raises the target price from HK$5.97 to HK$7.09, based on a forecasted 11 times price-to-earnings ratio for the 2025 fiscal year. CMB International stated that they believe the company's 2025 fiscal year guidance is achievable, but they also see some risks or concerns, including risks in the store opening plan, continued pressure on offline sales per store, partly due to weak foot traffic and intensified competition, and increasing inventory levels. The bank stated that if this situation persists, retail discounts may expand or more provisions may be needed in the future. CMB International has downgraded the company's net profit forecasts for the 2025 to 2027 fiscal years by 3%, 5%, and 6%, respectively, reflecting a slowdown in offline sales growth, slower store expansion, and weaker control over operating expenses.