Daheng: Raises the target price of 361 DEGREES (01361) to HKD 5.4 and maintains the "Outperform" rating.

Daiwa issued a research report stating that it has raised the target price for 361 DEGREES (01361) from HKD 4.7 to HKD 5.4, corresponding to a projected price-to-earnings ratio of 7.5 times over the next 12 months, maintaining an "Outperform" rating. Daiwa pointed out that 361 DEGREES' revenue in the first half of the year grew by 8% year-on-year, with a gross profit margin reaching 41.8% and a net profit increase of 8% year-on-year, in line with the bank's and market expectations. The company is expected to achieve full-year revenue growth of 8% to 10%, a gross profit margin of 41% to 42%, and an increase in net profit. The bank believes that 361 DEGREES will benefit from the K-shaped consumption trend in China, and its cost-effective positioning allows it to exhibit more resilience compared to its peers. The company recently appointed Simon Men, the former Vice President of Sales for Nike China, and it is anticipated that more top international brand talents will join, which is expected to improve product, channel, and execution capabilities. In the first and second quarters of next year, 361 DEGREES will hold new product ordering meetings, and Daiwa estimates that orders at that time could see high single-digit growth.