FAST NEWS: 361 Degrees profit surges on high-value new products

The latest: Sportswear retailer 361 Degrees International Ltd. (1361.HK) said on Monday it expects to report a profit of 930 million yuan ($131 million) or higher for 2023, up 25% or more from its 747 million yuan profit for 2022.

Looking up: The company attributed the improved results to increased brand recognition and its ongoing introduction of high-performance and high-value new products, as well as a favorable retail environment.

Take Note: The increase also owed partly to the company’s increased shareholding in a subsidiary engaged in the e-commerce business.

Digging Deeper: 361 Degrees is one of China’s top four domestic sportswear brands, alongside Li Ning (2331.HK), Anta (2020.HK) and Xtep (1368.HK). It focuses on smaller cities that tend to be less profitable than major urban centers, with the result that its gross margin and market cap trail its three larger rivals. To keep its revenue growing, the company has focused on its children’s apparel and e-commerce platform in recent years, producing strong results. It posted strong growth in last year’s fourth quarter, with retail sales for its core brand and children’s apparel rising by more than 20% and 40%, respectively.

Market Reaction: Shares of 361 degrees rose on Tuesday, closing up 4.9% at HK$3.66 by the midday break. The stock now trades at the lower end of its 52-week range.

Translation by A. Au

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