CICC has maintained its 2025 EPS forecast for 361 DEGREES (01361) at 0.61 yuan. Considering ongoing fluctuations in the retail environment, the firm has introduced a 2027 EPS forecast of 0.74 yuan. The current stock price implies a P/E ratio of 7.7x and 6.9x for 2026 and 2027, respectively. CICC reiterates its Outperform industry rating. The company announced its operational performance for the fourth quarter of 2025. The offline gross merchandise volume (GMV) for both the main 361 DEGREES brand and the children's wear line increased by approximately 10% year-over-year, while the GMV on e-commerce platforms registered a high double-digit year-over-year increase. CICC's primary views are as follows: The fourth quarter of 2025 continued the strong growth momentum, with discounts and inventory levels remaining stable. During the quarter, both the main 361 DEGREES brand and the children's wear line achieved offline GMV growth of around 10% year-over-year, extending the robust performance seen since the beginning of the year. The average retail discount was approximately 28-30% off (or 70-71% of the original price), remaining relatively stable both year-over-year and quarter-over-quarter. The inventory-to-sales ratio stood at 4.5–5.0x, staying within a healthy range. Online, the GMV for the fourth quarter of 2025 saw a high double-digit year-over-year increase, with online discount levels and the proportion of new products remaining generally stable. The rollout of the Super Product Store format is progressing smoothly, with the store opening pace exceeding management's expectations. The company is actively advancing the expansion of its new Super Product Store format. As of the end of December 2025, 126 Super Product Stores had been opened in mainland China (including 21 children's wear Super Product Stores), with stores in Tier 1 and Tier 2 cities accounting for nearly 50% of the total. This opening count surpassed management's initial full-year guidance of 100 stores. The average size of a Super Product Store ranges from 800 to 1,200 square meters. These stores have demonstrated significant improvements in customer acquisition effectiveness and operational efficiency, while also achieving better sell-through rates and average transaction values compared to regular stores. CICC believes that the differentiated layout of the new Super Product Store format has the potential to further enhance brand recognition for 361 DEGREES and provide solid support for sales. Brand building efforts continue to intensify, and the outlook for 2026 is positive. Adhering to its brand strategy of "Technology as the Foundation, Brand as the Priority," 361 DEGREES continues to focus on developing professional products and key sports event marketing. The company has commenced a new strategic cooperation cycle with the Olympic Council of Asia and has been appointed as the official supplier for the 2025 WTCC World Tennis Continental Cup, indicating continuous strengthening of its brand building. The company's order fairs for the first two quarters of 2026 performed well, overall meeting company expectations. Order growth was primarily driven by volume increase, with average selling price (ASP) improvement being relatively limited. Looking ahead to 2026, the company is confident in continuing to achieve business growth that outpaces the industry average and plans to further increase its market share through high-quality, high-value products.
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