The Zhitong Finance App learned that Everbright Securities released a research report saying that the 361 degree (01361) company's performance in the first half of the year was steady. Adult clothing and children's clothing businesses went hand in hand. At the same time, e-commerce channels continued to be deeply cultivated, and overseas business showed a rapid growth trend. In the second half of the year, the company will continue to adhere to its professional, youthful and international positioning to enhance its brand influence. The company's profit forecast for 26 to 28 years was maintained, and the corresponding net profit to mother was RMB 14.9/16.7/1.8 billion, respectively. Based on the latest share capital, EPS was 0.69/0.77/0.83 yuan, respectively, and PE was 6/5/5 times, respectively, maintaining the “buy” rating.
Incidents:
The 2026 interim results were announced 361. In the first half of 2026, the company achieved operating income of 6.16 billion yuan, a year-on-year increase of 8.0%, net profit to mother of 930 million yuan, an increase of 8.0% year-on-year, and EPS of 0.44 yuan. It plans to distribute an interim cash dividend of HK22.2 cents per share, with a dividend ratio of 45%.
In terms of profit margin indicators, the company's gross margin increased 0.3 PCT to 41.8% year on year in the first half of '26, operating profit margin decreased 0.4 PCT to 19.5% year on year, and net interest rate to mother was 15.0%, the same as year on year. In terms of retail sales, 26Q1-Q2 companies' 361 degree main brand (offline channel) increased by about 10% year-on-year; 361 degree children's clothing (offline channel) increased by about 10% year-on-year per medium to high number of units; and 361 degree e-commerce increased by medium to high units year-on-year.
The main views of Everbright Securities are as follows:
Adult/children's clothing revenue in the first half of the year +8.6%/+6.9%, online/offline +9.5%/+7.3%
By category, the revenue share of adults/children's wear/others (accessories and sole sales, etc.) in the first half of '26 (share of total revenue, same below) was 73.6%/21.4%/5.0%, respectively. Revenue was +8.6%/+6.9%/+3.7%, respectively. Looking at adult products, footwear/clothing revenue accounted for 44.2%/29.4% of total revenue, respectively, and revenue +5.7%/+13.2%, respectively; looking at children's clothing products, shoes/clothing revenue accounted for 12.9%/8.5% of total revenue, respectively, and revenue was +11.7%/+0.5% year-on-year, respectively. Furthermore, overseas business performance was impressive. Overseas sales volume increased by more than 80.0% year on year, and overseas cross-border e-commerce sales volume increased by more than 140.0% year on year.
By channel, the share of online/offline revenue in the first half of '26 was 32.3%/67.7%, respectively, and revenue was +9.5%/+7.3% year-on-year, respectively.
In terms of offline channels, as of the end of June 2026, there were 5076 sales outlets in mainland China (318 compared to the beginning of the year) and 1,167 (compared to the beginning of the year -86); 361 children had 2,202 sales outlets in mainland China (162 compared to the beginning of the year); 188 supermarket stores were opened (+61 compared to the beginning of the year), including 187 in mainland China (152 main brands and 35 children's supermarkets) and 1 overseas in Cambodia.
Gross margin increased, expense ratio remained flat, inventory decreased compared to the beginning of the year, and net operating cash flow increased
Gross profit margin: In the first half of '26, gross margin increased 0.3 PCT to 41.8% year-on-year. By category, the gross margins of adults'wear/children's wear/other in the first half of '26 were 42.6%/42.4%/26.1%, respectively, +0.1/+0.8/-0.3 PCT, respectively.
Expense rate: Expense rate for the first half of '26 was 24.1%, the same as year on year. Among them, the sales/management/finance expenses ratio was 17.5%/6.6%/0.0%, respectively, -0.7/+0.8/-0.1 PCT year on year, respectively. The decrease in the sales expense ratio is mainly due to the decrease in sales staff costs reflecting the improvement in operating efficiency; the increase in the management expense ratio is mainly due to the year-on-year increase in R&D expenses and the year-on-year increase in charitable donations. Also, in the first half of '26, advertising and promotion expenses, R&D expenses, and employee costs accounted for 9.5%/2.9%/6.3% of revenue, respectively, -0.6/+0.1/-0.4 PCT, respectively.
Other financial indicators: 1) Inventory at the end of June '26 was 1.96 billion yuan, a decrease of 5.2% from the beginning of the year; the number of inventory turnover days was 102 days, a decrease of 15 days from 2025. 2) Accounts receivable and notes receivable were $5.37 billion at the end of June '26, an increase of 13.4% over the beginning of the year; the number of accounts receivable turnover days was 149 days, the same as in 2025. 3) Net cash flow through TBoverSeam was 610 million yuan in the first half of '26, an increase of 16.7% over the previous year.
Risk warning: Domestic and foreign demand continues to weaken; abnormal weather affects offline passenger flow; e-commerce channel growth is slowing; improper cost control or investment results fall short of expectations; industry competition intensifies.