ANXIN International released a research report, maintaining a "buy" rating on 361 degrees (01361), with the predicted EPS for 2024/2025/2026 being 0.56/0.64/0.72 yuan and a target price of HKD 6. After being included in the Hong Kong Stock Connect last year, the market's attention has further increased, which also helps to increase trading volume and liquidity. Under the background of consumer segmentation, consumers will pay more attention to product quality, functionality and technology, and the company will continue to launch new products to seize more market share.

Anxin International's main points are as follows:

Q2 revenue maintained rapid growth, and e-commerce performed well.

In Q2 of 24, 361 degrees' adult offline revenue increased by about 10% year-on-year, while children's wear offline revenue increased by a double-digit percentage year-on-year. The offline growth rate slowed down sequentially, but thanks to the differentiated positioning of the company's online and offline, e-commerce maintained high growth, recording a year-on-year growth of 30-35%. During the 618 period, the company's e-commerce channel sales increased by 94% year-on-year, ranking third in national brands, with sales growth of 99%, ranking first in the industry. The sales volume of top-selling products across all channels exceeded 0.24 million pieces, a year-on-year increase of 167%.

Inventory and discounts maintain health, and store efficiency is expected to further improve.

The inventory-sales ratio for Q2 is 4.5-5, maintaining a healthy level. The discount is about 71% and the discount ratio is basically the same as the same period last year, but there is still room for improvement from the level of 7.5% before the outbreak. The sold-out rate is expected to be 80%, maintaining a good trend. In terms of stores, the net increase in adult stores is expected to be maintained in the 24Q2, and the average area of adult and children's stores has increased. At present, the average store effect of adult stores is close to 2 million, and the average store effect of children's clothing stores is 1-1.3 million. In the second half of the year, the store effect of children's clothing stores is expected to be further improved with the increase in the proportion of fifth-generation stores.

New product iteration and spokesperson resources help expand the brand's influence.

The company continues to strengthen product iteration, improve product quality, and continue to reflect functionality and cost-effective price. In the running field, it launched the Titan family series, which focuses on stable support, improving product cushioning performance, comfort, wear resistance, and optimizing the running experience. In the basketball field, combined with spokesperson resources, it launched the Big35.0QuickPRO priced at 799 in April and the Supernova 2.0 Pro in June. At the same time, the company launched innovative products through star spokespersons, IP linkage, and other methods to attract the attention of young consumer groups, and continuously enriched the brand's youthful expression. With the arrival of the Paris Olympics, the company will also launch marketing activities around spokesperson Jokic to help enhance the brand's influence.