Guoxin Securities: Maintaining a 361 degree (01361) “better than the market” rating, target price of HK$4.5-5.1

The Zhitong Finance App learned that Guoxin Securities released a research report stating that it maintains the 361 degree (01361) “superior to the market” rating and expects net profit to be 11.4/13.2/1.53 billion yuan in 2024-2026, up 18.1%/16.5%/15.6% year on year, with a target price of HK$4.5-5.1. On October 14, the company announced retail performance for the third quarter of 2024. The 361 degree offline retail sales of major brands recorded a positive 10% increase, children's clothing brands recorded a positive 10% increase in offline retail sales, and e-commerce platforms recorded a positive 20% increase.

According to the report, the company's turnover performance in the third quarter was steady, and it is optimistic about professional sports series, children's clothing, and e-commerce driven growth in the medium to long term. The industry's consumption environment in the third quarter was full of challenges. The company's turnover continued to grow steadily. It continued to launch new market-competitive running shoes, and the inventory ratio and discount rate were stable month-on-month; with the National Day and peak consumption season, industry trends improved, and I am optimistic that the company will continue to maintain an industry-leading growth rate in the fourth quarter.

Furthermore, since the launch of the rebranding program at 361 degrees, product and channel adjustments have begun to improve, brand product potential has improved, and financial management conditions have improved. In the medium to long term, the company's rich IP matrix for professional products will drive a sharp rise in volume and price, and there is plenty of room for brand growth.