TF Securities: 361 Degrees: A Strong Start to Q1 2026

The company released its Q1 2026 sales performance

361 Degrees' main brand products achieved a year-over-year retail sales growth of approximately 10% in Q1 2026; 361 Degrees' children's brand products also saw a year-over-year retail sales increase of about 10% in Q1 2026; the overall sales volume of products on 361 Degrees' e-commerce platform grew significantly during Q1 2026.

Centering around the strategic core of 'technology as the foundation, brand as the priority'

Promote the transformation of technology research and development into practical product value, reinforcing the professional barriers of the two core categories: running and basketball. Actively advance the iterative upgrades of classic product lines and launch several strategic new products to build a clear and function-focused product matrix. Meanwhile, by venturing into emerging sectors like women’s fitness and outdoor activities, create a multi-dimensional product ecosystem that flexibly responds to diverse consumer demands.

To deepen brand collaboration, the company continues to operate its proprietary flagship events such as 'Track 3,' 'Ignite at Contact,' 'Women’s Fitness League,' and 'On Board.' It actively expands into various sports scenarios including tennis, badminton, cycling, and outdoor activities, continuously enhancing both the breadth and depth of public participation in sports.

Moreover, leveraging an international and professional ambassador lineup, the brand vividly demonstrates its technological capabilities and professional pursuits through on- and off-field attire displays and interactive storytelling, injecting long-term upward momentum into the brand.

Deepen comprehensive channel transformation and explore diverse growth potential.

Based on the global development strategy, comprehensively strengthen the channel system, promote the integration of online and offline platforms, innovate retail formats, and expand globally, accelerating the construction of an all-channel, highly collaborative ecosystem. By enhancing terminal customer acquisition capabilities and deepening fine-grained operations, drive simultaneous improvements in retail efficiency and market share.

Facing the rapidly evolving digital retail environment, the company accelerates the iterative upgrade of e-commerce channels, establishing it as the core hub for connecting with consumers, conveying brand values, and boosting performance. Strengthen differentiated online product offerings and deepen the exclusive online product strategy to accurately meet diverse market demands, improving customer reach efficiency.

The 361 Degrees Super Store, featuring an 'integrated' and 'full-category' immersive experience, has become a key driver in strengthening the brand's differentiation. By the end of 2025, a total of 127 Super Stores will be established nationwide, successfully achieving the milestone of 100 stores and becoming a new hub for refreshing the brand image and deepening user relationships.

Maintain profit forecasts and uphold a 'Buy' rating.

We forecast the company’s revenue for 2026-2028 to reach 12.35/13.87/15.45 billion RMB respectively; net profits attributable to shareholders are expected to be 1.479/1.633/1.801 billion RMB respectively; EPS will be 0.72/0.79/0.87 RMB per share, corresponding to PE ratios of 7x, 7x, and 6x respectively.

Risk Warning:Risks such as intensified market competition, weaker-than-expected end-user consumption, and exchange rate fluctuations.

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