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    1361   KYG884931042

361 DEGREES INTERNATIONAL LIMITED

(1361)
  Report
End-of-day quote. End-of-day quote Hong Kong Stock Exchange - 10/20
4.15 HKD   +7.51%
06:27a361 DEGREES INTERNATIONAL : ' Retail Sales Rise in Q3
MT
08/17EQS-NEWS : Net profit grew by 32.9% to RMB401.4 -2-
DJ
08/17EQS-NEWS : Net profit grew by 32.9% to RMB401.4 million in 1H2021
DJ
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EQS-News : Net profit grew by 32.9% to RMB401.4 million in 1H2021

08/17/2021 | 02:05am EDT

EQS-News / 17/08/2021 / 14:04 UTC+8

?For Immediate Release?

361 Degrees International Limited

361 ???????

Net profit grew by 32.9% to RMB401.4 million in 1H2021

****

361° unlocked potential for future success with passion and

one extra degree of effort in the sports market

(17 August 2021 - Hong Kong) -361 Degrees International Limited ("361°" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 1361), a leading sportswear brand enterprise in China, announces its unaudited interim results for the six months ended 30 June 2021.

Financial performance

-- Revenue increased by 15.7% year on year to RMB3,107.1 million

-- Gross profit increased by 28.0% year on year to RMB 1,299.7 million

-- Net profit increased by 32.9% year on year to RMB 401.4 million

-- Cash and cash equivalents (including bank deposits and cash in hands, and fixed deposits with originalmaturities not exceeding three months) amounted to RMB2,966.1 million

-- The final redemption of 7.25% Senior Unsecured Notes due 3 June 2021 was completed by the Group with itsinternal resources

Operational performance

-- With its twin drivers of professional and fashionable sporing products, the Group has optimised andupgraded its brand resource matrix. The Group also signed a contract with GONG Jun, a well-known young actor inChina, to engage him as the global endorser of its products. This has accentuated such characteristics astrendiness and youthfulness of the Group's products and enhanced its brand image. The Group has promoted the trendof China-Chic culture and officially entered into a strategic cooperation agreement with the China Cotton IndustryAlliance (CCIA).

-- 361° Kids kept the growth momentum with year-on-year growth of 24.0% in revenue and accounted forapproximately 16.0% of the Group's total revenue. 361° Kids constantly enhanced its competitive advantages todifferentiate itself from its peer with its brand statement "Love it, Kids!" and launched "technology-driven, newChina-Chic" products, reinforcing the Group's leading position in the kids' wear industry.

-- Sales of web-exclusive products at the e-commerce business increased by 54.5% year on year and accountedfor 15.7% of the Group's total revenue. Capitalising on the development trend of e-commerce, the Group continued toadopt a consumer-centric approach and upgraded the consumer experience through omnichannel by leveraging itsproduct upgrade, digital transformation and operational efficiency enhancement.

-Cont'd - Financial Highlights

                                                 For the six months ended 30 June 
                                                                                               Change 
                                                         2021           2020 
Profitability Data (RMB million) 
Revenue                                              3,107.1            2,686.1                +15.7% 
Gross profit                                         1,299.7            1,015.8                +28.0% 
Operating profit                                     710.2              538.2                  +32.0% 
Profit attributable to equity shareholders           401.4              302.0                  +32.9% 
Basic EPS (RMB cents)                                19.4               14.6                   +32.9% 
 
Profitability ratios (%) 
Gross margin                                         41.8               37.8                   +4.0 p.p. 
Operating margin                                     22.9               20.0                   +2.9 p.p. 
Margin of profit attributable to equity shareholders 12.9               11.2                   +1.7 p.p. 
Effective income tax rate                            30.7               27.3                   +3.4 p.p. 
Return on shareholders' equity                       6.0                4.7                    +1.3 p.p. 
 
Operating ratios as percentage of revenue (%) 
Advertising and Promotional expenses                 8.0                7.4                    +0.6 p.p. 
Staff costs                                          8.7                9.0                    -0.3 p.p. 
Research and Development                             3.6                3.8                    -0.2 p.p. 
 
Cash position (RMB million)                          As at 30 June 2021 As at 31 December 2020 
Cash and cash equivalents                            2,966.1            3,451.3                -14.1% 
 

Financial Analysis

In the first half of 2021, the Group's total revenue increased by 15.7% to RMB3,107.1 million. Sales of the Group's two core products, namely footwears and apparels, grew by 22.5% year on year to RMB1,380.5 million and 6.1% year on year to RMB1,167.7 million respectively. During the period under review, the sales of footwear products accounted for 44.4% of the Group's total revenue while apparel sales accounted for 37.6%. In addition, the revenue from 361° Kids continued an upward trend, increasing by 24.0% year on year to RMB498.2 million and accounting for approximately 16.0% of the Group's total revenue. During the period under review, the revenue from the sales of web-exclusive products at the e-commerce business increased by 54.5% year on year to RMB487.8 million, accounting for 15.7% of the Group's total revenue.

The gross profit in the first half of 2021 was RMB1,299.7 million, representing a year-on-year increase of 28.0%. Gross margin increased by 4.0 percentage points year on year to 41.8%. Profit attributable to equity shareholders increased by 32.9% year on year to RMB401.1 million, equivalent to earnings of RMB19.4 cents per share.

As at 30 June 2021, cash and cash equivalents (including bank deposits and cash in hands, and fixed deposits with original maturities not exceeding three months) amounted to RMB2,996.1 million (31 December 2020: RMB3,451.3 million). Trade and bills receivable turnover days improved from 159 days as at the end of 2020 to 146 days. Inventory turnover days dropped substantially from 111 days as at the end of 2020 to 70 days.

In view of the lingering uncertainties in the post-pandemic era, the Board has prudently resolved not to recommend interim dividend for the six months ended 30 June 2021 in order to preserve cash for the long-term financial health of the Company and bolster its ability to tide over the challenging business environment.

-Cont'd -

Operation review

In the first half of 2021, pandemic prevention and control already became a normal practice in China yet there were still uncertainties such as sporadic recurrences of the epidemic. The country's economy resumed growth with steadily increasing momentum. The "internal circulation" component of the country's "dual circulation" strategy for economic development stimulated the market and unleashed the potential for growth in consumption. The sports industry also recovered steadily on the back of a good recovery in the domestic consumption. The Group adhered to the "consumer-centric" approach to business, strengthened the brand positioning that manifests "professionalism, youthfulness and internationalisation", deeply tapped into consumer needs and actively enhanced consumer experience through its omnichannel with the aim of expanding the market.

Focusing on resources with advantages to develop 361° core brand and enhancing its brand strength on multiple dimensions

Focusing its resources on the development of the 361° core brand, the Group adhered to its brand positioning that manifests "professionalism, youthfulness and internationalisation", satisfying customers' needs with its brand value and product value and maintaining stable and sustainable growth amid the fierce competition. Leveraging its tradition of actively sponsoring large-scale sports events, the Group officially became the official partner of the 19th Asian Games in Hangzhou in 2022, getting ready to shine again in 2022. The Group realised its business growth in the first half of 2021 which was driven by the Group's 361° core brand, 361° Kids and its e-commerce business.

The Group keeps on investing in research and innovation, which lay a solid foundation of for the professionalism of its products. As of 30 June 2021, the Group obtained approval for 387 patents. During the period under review, many of the Group's products won international awards. For example, the "Flying Flame" shoes became the IAAF certified carbon running shoes, 361-FIERCE, the international product line of running shoes, was rated as the "Best Deal" by Test 4 Outside, a professional review website in France; 361-STRATA 4 was rated as One of the 25 Top Picks for Running Shoes in 2021 by the United States' "Runner's World" magazine; and the "Lightspeed" suit won the German Red Dot Design Award in 2021. The remarkable results reflected the Group's efforts and perseverance in the field of professional sports.

Consumer experience fosters a sense of connection between brands and consumers. The Group always puts consumers first and upgrades the consumer experience through its omnichannel, maximizing the fulfillment of the consumers' needs. In the first half of 2021, the Group upgraded its retail stores and advanced the digital transformation of its e-commerce platform in line with the growing trend towards the integration of online and offline consumption. It also actively expanded the new retail channels by launching the proprietary WeChat mini program "361° You Yan You Du" in May which allowed the Group to tap the traffic of viewers in the private domain of online community and thus boosted growth in both the online and offline sales. The Group's customer membership expanded further as the Group succeeded in targeting its customer groups precisely and in optimizing the membership management system. The Group is committed to upgrading the consumer experience through omnichannel under which its offline physical stores, e-commerce operation and new retail channels reinforce each other.

(MORE TO FOLLOW) Dow Jones Newswires

August 17, 2021 02:04 ET (06:04 GMT)

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Financials
Sales 2021 5 746 M 898 M 898 M
Net income 2021 526 M 82,3 M 82,3 M
Net cash 2021 5 740 M 898 M 898 M
P/E ratio 2021 13,5x
Yield 2021 1,06%
Capitalization 7 057 M 1 104 M 1 104 M
EV / Sales 2021 0,23x
EV / Sales 2022 0,14x
Nbr of Employees 6 697
Free-Float 34,7%
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361 Degrees International Limited Technical Analysis Chart | 1361 | KYG884931042 | MarketScreener
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Mean consensus OUTPERFORM
Number of Analysts 4
Last Close Price 3,41 CNY
Average target price 2,97 CNY
Spread / Average Target -12,9%
EPS Revisions
Managers and Directors
Wu Hao Ding President, CEO & Executive Director
Yuen Fai Li Chief Financial Officer & Secretary
Hui Huang Ding Chairman
Ping Cho Terence Hon Independent Non-Executive Director
Chuang Chen Independent Non-Executive Director
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