① It is worth mentioning that in 2023, the 361 degree children's clothing business continued to grow strongly. The year-on-year increase during the reporting period was 35.7% to 1,957.5 billion yuan, accounting for 23.25% of total revenue. ② By region, about 69.3% are located in China's third-tier cities and below, while 6.4% and 24.3% are in China's first-tier and second-tier cities respectively.
Financial Services Association, March 13 (Reporter Xu Cihao): Today (13th), the Hong Kong stock listed company 361° International Limited (“361 Degrees”) released its 2023 annual report.
According to the data, 361 annual revenue for 2023 was RMB 8.42 billion, up 21.0% year on year; net profit was RMB 1.04 billion, up 27.35% year on year. After the financial report was released, the 361-degree stock price rose by more than 6 points in the afternoon. By the close, it had risen 5.53% to close at HK$4.58, with a market value of HK$9.47 billion.
Bet on the sinking market in the northwest
According to financial reports, sales of the core categories, footwear products and apparel products increased by 23.0% and 9.8% year-on-year respectively in the 361 fiscal year in 2023, and the overall revenue of the two categories accounted for 41.7% and 31.9% respectively.
Thanks to improved product quality and professionalism, effective implementation of online exclusive product strategies, and optimization of operational efficiency, 361 e-commerce business sales revenue increased 38.0% year-on-year to 2.33 billion yuan in 2023, accounting for 27.6% of total revenue.
On the offline side, by increasing the number and scale of stores, 361 achieved a net increase of 254 stores in the review year compared to the previous year. The proportion of supermarket department store channels and ninth-generation stores increased rapidly.
According to financial reports, as of December 31, 2023, 361 degrees had 5,734 stores nationwide. In terms of store layout, about 75.9% of these are located in third-tier or lower Chinese cities, while 5.1% and 19% are in first-tier and second-tier cities in China, respectively.
It is worth noting that companies that started the children's clothing business at 361 degrees as early as 2009. Although the market size is less than that of brands such as Anta, Adidas, and Nike, 361 degrees is seizing the dividends of the sinking northwest market by creating unique product selling points to differentiate and focus on first-tier brands.
According to financial reports, during the reporting period, 361 degrees had 2,545 sales outlets providing 361 degree children's products, a net increase of 257 compared with 2022. Of these, 341 sales outlets were located in authorized retail stores of the 361 degree brand, and also sold 361 degree brand and 361 degree children's products. By region, about 69.3% are located in China's third-tier cities and below, while 6.4% and 24.3% are in China's first-tier and second-tier cities respectively.
Furthermore, as of December 31, 2023, 361 Degrees Kids's newest fourth-generation image stores had increased to 2,206, accounting for 86.7%, an increase of 14.9% compared to December 31, 2022.
Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, said in an interview with a reporter from the Financial Federation that choosing to infuse the children's sports business can help 361 degrees open up a new, relatively independent market segment. As consumers' attention to children's health and sports continues to increase, the children's sporting goods market has gradually become a blue ocean of rapid growth.
361 degrees left behind
The four brands Anta, Li Ning, 361, and Tep have always held the title of the top four local sports brands in China, occupying half of the domestic sporting goods industry.
Today's four major sports brands in mainland China have long passed the era of going hand in hand. Judging from revenue, the other three companies have yet to announce their 2023 earnings, but the previous semi-annual reports show that 361 degrees is far behind.
Anta and Li Ning had revenue of over 10 billion yuan in the first half of 2023. Specifically, Anta achieved revenue of 29.65 billion yuan in the first half of 2023, up 14.2% year on year and net profit of 4.748 billion yuan, up 32.8% year on year; Li Ning's revenue for the first half of the year was 14.019 billion yuan, up 13.0% year on year, and net profit of 2.121 billion yuan, down slightly by 3.1% year on year; while revenue for the first half of 361 was 4.312 billion yuan.
In terms of market capitalization, the four sports brands also listed on the Hong Kong Stock Exchange, 361 Degrees is the only listed company with a market capitalization of HK$10 billion. As of today's closing, Anta Sports's market capitalization was HK$224.627 billion; Li Ning was $55.179 billion; Tep International's market capitalization was HK$12.23 billion, while 361 Degrees had a market capitalization of HK$9.47 billion.
According to Zhan Junhao, a well-known strategic positioning expert and founder of Fujian Huace Brand Positioning Consulting, in the face of many competitors, such as leading brands such as Li Ning and Anta, as well as up-and-coming brands such as Hongxing Erke and TEP, 361 degrees needs to find a unique strategic positioning that distinguishes itself from competitors.