SDIC Securities: The launch of the premium store has exceeded expectations, and is expected to bring more performance growth

361 DEGREES wrote a column · Jan 19 03:34

Recently, 361 Degrees announced its Q4 2025 operating results, with approximately 10% growth in offline retail for the main brand, about 10% growth in offline retail for the children's brand, and high double-digit growth on the e-commerce platform. Taking all factors into consideration, we forecast EPS for 2025-2027 to be RMB 0.60/0.69/0.76, target price at HKD 7.6, and maintain a 'Buy' rating.

E-commerce continues to grow rapidly, while offline revenue shows steady performance.361 Degrees announced its Q4 2025 revenue performance, with approximately 10% growth in offline retail for the main brand, about 10% growth in offline retail for the children’s brand, and continued rapid growth on the e-commerce platform, achieving high double-digit growth. Discounts remained stable and healthy, staying at 70-71% off, with inventory-to-sales ratio remaining flat month-over-month at around 4-4.5.

Continuous development of new products, enhancing capabilities from multiple dimensions.The company continues to innovate its product lineup, deepening the implementation of its 'Technology as the foundation, brand first' strategy. In the running category, the all-new racing family models Feiran 5, Feiran 5 FUTURE have been launched; the Supai family's third generation, including Supai FLOAT3, Supai CQT3, and Lingci 1, has been fully upgraded. In basketball, the second generation of Nikola Jokic signature basketball shoes, JOKER2, debuted in the U.S., and the sixth generation of Aaron Gordon signature basketball shoes, AG6, was released. In the outdoor segment, new products such as the Yiping trench coat, URBAN冲锋衣 (URBAN冲锋衣 translates directly to冲锋衣 which refers to a specialized jacket for outdoor activities,冲锋衣 is often translated as 'mountain jacket', 'outdoor jacket' or simply 'jacket' depending on context), and溯风shoes were introduced, giving consumers more choices for outdoor activities. In women’s fitness, the Little Eggshell 1.0 series and New Muscle SE series were launched, balancing lightness, warmth, flexibility, and comfort. In cross-training, the ULTRA极睿down jacket was introduced, offering a new experience in lightweight warmth. In the children’s segment, the Children’s Light Outdoor Shoes Journey 1.0 were launched, providing protection for children exploring the outdoors.

Superstores continue to be established, with the first overseas superstore opening.The company actively explores emerging channel development, and the continually expanding 361 Degrees superstores offer consumers exceptional value and a one-stop full-category shopping experience. As of December 31, 2025, 126 superstores have opened in mainland China, significantly surpassing the management's target of 100 stores. The first overseas superstore also opened in Cambodia, marking a new step in the brand’s overseas market expansion.

Investment advice:With over two decades of focus in the sports industry, the company has dedicated itself to developing high-value-for-money and highly functional products while actively exploring opportunities in emerging channels. It is expected to continuously benefit from the launch of new store formats, adding incremental growth to its performance. Considering that the company achieved solid growth despite a high base from last year, aligning with our overall expectations, we maintain our previous forecast, expecting EPS for 2025-2027 to be RMB 0.60/0.69/0.76. Based on historical valuation levels, we assign a 10x PE for 2026, corresponding to a target price of HKD 7.6, maintaining a 'Buy' rating.

Risk warnings: Economic downturns, inventory accumulation; intensified industry competition; channel expansion falling short of expectations.

Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty. Read more