CSC Financial has released a research report maintaining a "Buy" rating on 361 Degrees International Ltd (HKEX: 01361). The firm projects the company's operating revenue for 2026-2028 to reach RMB 12.10 billion, RMB 13.16 billion, and RMB 14.23 billion, representing year-on-year growth of 8.6%, 8.7%, and 8.2% respectively. Net profit attributable to shareholders is estimated at RMB 1.44 billion, RMB 1.59 billion, and RMB 1.75 billion, up 10.2%, 10.3%, and 10.1% year-on-year. The corresponding P/E ratios based on the latest valuation are 6.3x, 5.7x, and 5.2x. CSC Financial's key observations are as follows:
Main Brand, Children's Business, and E-Commerce Sustain Steady Growth Momentum in 26Q3
According to the company's 2026 Q3 operational announcement, the main brand offline, children's wear offline, and e-commerce platform gross merchandise value recorded mid-single-digit, mid-single-digit, and mid-to-high-single-digit positive growth respectively in 2026 Q3. Despite the impact of the consumption environment and weather conditions in Q3, the company's various channel GMV still maintained steady growth momentum. In 26Q3, offline discounts for the main apparel and children's wear stood at around 30% off, slightly deeper than the 29% off in 26Q2. As of the end of the quarter, the company's inventory-to-sales ratio remained between 4.5 and 5 months, indicating healthy channel inventory. The company's online focus is on exclusive offerings, bestsellers, and co-branded products, with emerging social platforms estimated to contribute higher growth rates. The e-commerce channel balances GMV growth with profitability quality.
Superstores Continue to Advance, Overseas Business Scales Rapidly
In 26Q3, the company operated 208 domestic superstores, with 21 newly added during the quarter, plus 2 overseas superstores. By the end of 26H1, the company had accumulated 188 superstores, a net increase of 61 compared to the end of 2025, comprising 152 for the main brand, 35 for children's, and 1 overseas. The proportion of new customer acquisition through superstores continued to rise, driving improvements in store efficiency and profitability. Regarding overseas business, 26Q3 is expected to extend the rapid growth momentum seen in 26H1. Currently, directly operated stores in Southeast Asia are performing well, with 2 overseas superstores already established in Cambodia, gradually building a second growth curve internationally.
26Q4 Outlook: Domestic Terminal Environment Still Faces Disturbances, Asian Games to Strengthen Overseas Brand Momentum, Channels Continue Quality Upgrading
1) Overall planning: The company maintains its full-year revenue growth guidance of 8%-10%. 2) It will increase investment in overseas brand marketing, with its proprietary mass sports event IP continuing to land in multiple domestic cities, achieving conversion from brand exposure to terminal sales. At the channel level, it will continue to promote superstore openings while strictly controlling the quality of new stores. Overseas physical outlets and cross-border e-commerce businesses will continue to expand rapidly, building a second growth engine.
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