CMB International issued a research report stating that 361 DEGREES (01361) delivered first-half results slightly below expectations. While management has confirmed its FY2025 guidance, the firm expressed increased concerns regarding the company's store opening plans, offline sales growth, and inventory turnover days.

However, given 361 DEGREES' relatively low valuation compared to industry peers and its superior first-half retail sales growth versus competitors, CMB International maintains its "Buy" rating on the stock and raises its target price from HK$5.97 to HK$7.09, based on a forecast FY2025 P/E ratio of 11x.

CMB International believes the company's FY2025 guidance is achievable but identifies several risks and concerns, including: risks associated with store opening plans; continued pressure on offline same-store sales, partly due to weak foot traffic and intensified competition; and increasing inventory days. The firm noted that if these conditions persist, retail discounts may widen or additional provisions may be required.

CMB International has revised down its net profit forecasts for FY2025-27 by 3%, 5%, and 6% respectively, to reflect slower offline sales growth, decelerated store expansion, and weaker operational expense control.