CICC released a research report maintaining its EPS forecasts of RMB0.61/0.72 for 361 DEGREES (01361) for 2025/26, unchanged. The current stock price corresponds to 8.9/7.5x 2025/26 P/E ratios. The firm maintains its outperform rating and target price of HK$6.98, representing 9x 2026 P/E ratio and 18% upside potential from the current stock price.

The company announced its Q3 2025 operational update: both 361 DEGREES main brand and children's line offline sales grew approximately 10% year-over-year, while e-commerce platform sales increased about 20% year-over-year.

CICC's main views are as follows:

**Q3 2025 Continues Previous Positive Trends, Actively Deploying New Retail Formats**

In Q3 2025, both 361 DEGREES main brand and children's line offline sales achieved approximately 10% year-over-year growth, continuing the strong performance since the beginning of the year. On a monthly basis, August showed the best performance, but September faced some pressure due to retail environment volatility. Retail discount remained around 70% during the quarter, with inventory-to-sales ratio maintaining within the 4.5-5x range.

The company is adapting to new retail format development trends, with rapid expansion of super stores reaching 93 locations by the end of September. Meanwhile, it partnered with Meituan to develop instant retail business, empowering offline operations with online traffic. Online, e-commerce platform sales grew approximately 20% year-over-year during the quarter, with the company continuing to focus on premium product deployment and content marketing, with online-exclusive products accounting for over 80%.

**National Day Sales Show Resilience Amid Weak Environment, Confident in Q4 2025 Operations**

During the National Day period, the retail environment continued September's volatility. The company actively promoted online marketing exposure and launched premium new products, with offline sales during National Day growing approximately 3% year-over-year, demonstrating resilience. Management expressed confidence in Q4 2025 sales performance, actively preparing for Double 11 and Double 12 sales campaigns.

**361 DEGREES Main Brand Adapts to Outdoor Trends, ONEWAY Gradually Expands Offline**

361 DEGREES actively adapts to the domestic outdoor apparel trend, increasing product R&D investment. The main brand newly launched the "Light Wild" series of windbreakers, "Mountain Walking" outdoor shoes, and "Energy Release" cycling apparel. Additionally, the company's Finnish outdoor brand ONEWAY began opening offline stores in September, with 6 stores opened in Zhengzhou, Beijing, Jinan, Daqing, Lhasa, and Xi'an as of early October. Management plans to continue brand renewal, presenting consumers with pan-outdoor scenario equipment choices that combine professional outdoor aesthetics with urban minimalist style.

**Risk Factors:** Terminal retail environment underperforms expectations, intensified industry competition, channel expansion falls short of expectations.