According to the report released by Changjiang Securities, in the short term, 361 degrees (01361) is expected to perform well in the 2024 seasonal ordering conference, with a strong certainty of high growth in revenue in 2024. In addition, under the background of optimizing the product structure of 361 degrees and enhancing the brand's power, it is expected that the price increase for the 2025 Q1 ordering conference will exceed the previous price increase, and the recognition of new products by dealers will continue to increase. In the medium and long term, the trend of improving the company's product matrix and product strength continues, and the channel structure continues to be optimized. Under the background of focusing on the cost performance of consumers, the company is expected to continue to benefit. It is estimated that the company will achieve a net profit of 1.14/1.35/1.59 billion yuan from 2024 to 2026 and is rated as “buy”.

Event: The company released the 2024 Q2 retail operation data, with a year-on-year growth of about 10% in the offline home decoration sector, a double-digit growth in the children's clothing sector, and a 30%-35% growth in the e-commerce sector. The revenue performance meets expectations.

The main points of the report are as follows:

Steady increase in revenue, with discounts and inventory remaining stable.

Steady increase in revenue, with discounts and inventory remaining stable compared to the previous quarter. In Q2 2024, the company's offline home decoration/children's clothing revenue growth rate still leads the industry, but the growth rate slowed down compared to Q1 due to weather factors such as the Southern rainstorm. The online high growth trend continues. The overall inventory discount level is expected to be relatively stable, with a discount rate of about 71% and an inventory turnover ratio of 4.5-5 months.

Product and channel are going up, with impressive growth in the 618 event.

In Q2, the company launched an upgraded version of the Titan family series with stable support as the core, and actively deployed the sunscreen series, launching summer new products such as sun protection clothing and Xunqian T. The product matrix continues to be enriched. In addition, the company is expected to continue to open large-scale and children's clothing stores, and the store area is expected to continue to increase compared to the previous quarter, and the channel structure continues to be optimized. The sales volume of the 618 e-commerce channel increased by 94% year-on-year, ranking first in the industry in terms of growth rate.

Risk warning: 1. Weakness in terminal retail; 2. The growth rate of professional sports categories is lower than expected; 3. Store expansion is lower than expected.