361? The turnover in the first half of 2016 increased by 15.7%. Continued to deepen the five major businesses to promote business development.

financial analysis

The Group's turnover in the first half of 2016 increased by 15.7% to RMB 2,555.5 million (first half of 2015: RMB 2,208.3 million), which was mainly driven by the Group's order growth in the first half of 2016. At the same time, it also reflects that China's sportswear industry has entered a stage of steady growth. Sales of the major product groups continued to improve. Among them, as the Group focused more on footwear products, the sales volume and average wholesale sales price of this segment recorded a significant increase, and the proportion of sales to turnover increased to 45.1%. Clothing sales accounted for 41.2% of turnover during the period under review. In addition, the revenue of 361 children's wear continued to grow strongly, with a growth of 16.5% to RMB272.1 million (first half of 2015: RMB233.5 million), accounting for 10.7% of the Group's turnover; reflecting that the children's wear business has matured. Customer base and huge growth potential.

The gross profit for the first half of 2016 was RMB1,059.0 million (first half of 2015: RMB911.3 million), and gross profit margin increased slightly by 0.1 percentage point to 41.4%. During the period under review, the gross profit margin of footwear decreased by 0.3 percentage points to approximately 40.7%. The gross profit margin of the apparel and children's wear business increased to 43.1% and 43.0% respectively.

During the period under review, the Group's turnover was approximately 8.6% (1H2015: 6.9%), which represented an increase of 43.3% to RMB219.7 million (1H2015: RMB153.2 million). ). The increase was mainly attributable to the increase in research and development expenses, the increase in the management staff's salary increase in overseas business units and the depreciation cost incurred in Xiamen's new headquarters. The research and development expenses increased to RMB72.4 million (1H2015: RMB54.4 million), representing 2.8% of the turnover during the period under review (1H2015: 2.5%). The Group's revenue and sales expenses increased by 15.4% to RMB310.9 million (first half of 2015: RMB269.4 million), representing approximately 12.2% of turnover.

As at 30 June 2016, accounts receivable aged within 90 days accounted for more than 89.3% (first half of 2015: 75.7%), and no accounts receivable were aged over 180 days.

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After the income tax expense of RMB149.7 million, the profit attributable to the equity holders increased by 1.3% to RMB273.1 million (first half of 2015: RMB269.6 million), equivalent to RMB13.2 per share. .

The Group's net cash generated from operating activities was RMB372.4 million (first half of 2015: 233.1 million). Net cash (including deposits and cash equivalents) was RMB 2.5 billion (first half of 2015: RMB 2.7 billion). Faced with the continued growth of the sportswear industry, the Group's strong financial position will help it seize the opportunities of business development.

In view of the Group's satisfactory performance, the Board of Directors declared an interim dividend of RMB 5 cents per share (first half of 2015: RMB 5) and a special dividend of RMB 5 cents per share. In the future, the Group will strive to steadily increase the dividend payout ratio in return for the long-term support of shareholders.

Operational highlights

In the first half of 2016, 361? continued to deepen the market for functional sports products for the Chinese public, relying on the multi-brand strategy of 361?, 361? children's wear and outdoor brand ONE WAY to capture the sales opportunities of different pipelines. As of June 30, 2016, the Group's authorized network in China had 6,853 stores. The Group will continue to focus on building a sustainable business profit model, increasing investment in product research and development, category segmentation, and upgrading terminal payment methods to enhance store profitability and revenue levels. The Group also encourages distributors to develop larger-scale compound stores (joining 361? Children's Wear Products) to attract more people to the store to further increase sales. The same-store sales of 361 achieved a high single-digit climb for six consecutive quarters, showing that a number of measures have achieved significant results.

In the first half of 2016, the total number of 361 children's wear points reached 2,416, of which 1,134 were located in 361 main brand stores. During the period, children's wear sales continued to grow steadily, and related income has accounted for 10.7% of the group's revenue. 361 Children's Wear is recognized in the industry and the consumer community. During the period under review, the Group's children's wear business has won numerous awards including “3.15 China Consumer Market Industry Impact Brand”, “China Top Ten Children's Wear Brand” and “China's Most Good children's clothing brand." The country has fully implemented the two-child policy. It is believed that the potential consumer groups will continue to grow in the future and the market will continue to expand. The Group is confident that the children's wear brand will continue to grow bigger and stronger.

In view of the increasing consumption of online and mobile shopping in recent years, the Group is also focusing on building its modern e-commerce. In addition to online sales on the official website, the Group has also entered China's major e-commerce platforms such as Tmall, Taobao, Jingdong and Vipshop. Through e-commerce, the Group launched online exclusive products, such as children's smart children's shoes that cooperated with Baidu, and the newly launched "361 + iMate smart running shoes" series, which achieved brand differentiation and formed an online line of e-commerce and retail stores. The next synergy effect. During the period under review, the turnover of the Group's online sales of the Group's products was RMB166.4 million (1H2015: RMB62.4 million), representing 6.5 of the Group's total turnover. % (first half of 2015: 2.8%). In the future, the Group will continue to promote the online sales of modern e-commerce and develop it into an important part of the Group's revenue.

The Group is committed to strengthening product innovation and conducting comprehensive research and development in smart products to capture market share with versatile and cost-effective products. The iMate Smart Running Shoes series, which was independently developed by the Group in the second half of 2015, combines the three elements of shoes, smart chips and mobile app "APP" to enhance the running experience with superior functionality and advanced technology. This series of smart running shoes was launched in May 2016, and the response was enthusiastic after the launch of the product. At the same time, the Group continues to optimize its research and development capabilities, continuously optimize product design in fashion design, molding and fabric selection, and introduces cutting-edge patented fabrics in various footwear products, striving to achieve product differentiation goals.

To further diversify its business and explore its growth potential, the Group is also fully expanding its new business and opening up overseas markets. As of June 30, 2016, the Group has established wholly-owned subsidiaries in Brazil and the United States to develop overseas operations and has 908, 180 and 52 points of sale in Brazil, the United States and Europe respectively. At the 2016 Brazil Olympic and Paralympic Games, the group also appeared as the official secondary sponsor of Rio, and supported many athletes and delegations to compete in the Olympics. As the first Chinese sports brand to sponsor such a large-scale world sports event, this will not only benefit the Group's overseas promotion, but also expand its brand awareness and establish a high-quality brand image in overseas markets, pushing the brand value to the peak. During the period under review, the sales growth of the Group's overseas operations more than doubled to RMB45.2 million (1H2015: RMB20.5 million), representing approximately 1.7% of the Group's total turnover. In the next three to five years, the Group will invest heavily in the rapid development of its overseas business. The Group also expects that international business will increasingly become an important source of revenue contribution to the Group.

After Beijing successfully applied for the 2022 Winter Olympics, the Chinese government has promoted the public's awareness of the snow sports through the implementation of the "300 million people involved in the snow and ice sports program". It is expected that the public will be interested in winter sports and even related sports equipment. Demand will increase. It is expected that the high-end brand ONE WAY of the ice and snow sports under the Group will continue to benefit. As of June 30, 2016, ONE WAY opened 65 self-operated stores in 29 first- and second-tier cities in China. The Group will continue to open stores in the future to lay the foundation for rapid development.

Since 2015, the central government has introduced a number of reforms to promote the development of football, including the adoption of the "China Football Reform Master Plan", and in April 2016, the National Development and Reform Commission issued the "China Football Medium and Long-Term Development Guidelines". It is expected to greatly increase the public's attention to this sport. The Group officially launched its football products in September 2015. Its rapid execution and product professionalism have once again been highly praised by the market. 361? Also signed the Chinese national football team striker Yang Xu, vigorously promote the football product line. In the future, the Group will strengthen research and development and launch more professional and cost-effective football equipment products to meet the national policy and strive to promote the popularization of football.

Future prospects

In June this year, the State Council promulgated the "National Fitness Program 2016-2020", which aims to promote the total scale of sports consumption in 2020 to reach 1.5 trillion yuan. Looking ahead, the scale of the sports industry will be further expanded, and the demand for professional sportswear will also increase steadily. In the face of fierce competition in the industry, 361? is full of confidence in the Group's development prospects. The Group will continue to promote product innovation and R&D to achieve product differentiation to maintain its leading position in the industry. In addition, the Group will expand modern e-commerce and online sales in an all-round way, promote its new brand ONE WAY, etc., and improve overall operational efficiency, achieve long-term profit model, and consolidate the Group's leadership position.

Mr. Ding Wu, President of 361 Degree Group, concluded that “361? will continue to target the mass market and build a sustainable business profit model, and will continue to use product differentiation strategies to leverage multi-brand advantages to meet the needs of different consumers. It will continue to consolidate its main products in the running category and focus on developing business projects with broad prospects such as football and snow sports. At the same time, the Group will vigorously develop its overseas international business and continue to compete with international brands for its superior product strength. The Group will continue to increase the proportion of e-commerce products and expand sales of this channel. We will continue to focus on product development and maintain leading position with cutting-edge technology. The Group supports the Brazilian Olympic and Paralympic Games as an official sponsor, which is believed to be helpful. Our brand has won more reputation in the international market, and this event will bring the brand to the peak!"

- Finish-

About 361 Degree International Limited

Founded in 2003, 361? is a leading sportswear brand in China and continues to enhance its influence in the international market. The Group designs, develops, manufactures and markets functional, innovative and stylish sportswear products to cater to the needs of adults, young people and children in all sports and leisure apparel. The Group is positioned in the mass market to provide high performance and cost effective footwear, apparel and related accessories.

The Group's business model of wholesale franchise distribution, through 31 exclusive distributors and licensed retailers, manages a large distribution network of approximately 7,000 retail stores in China, and has established a leading position in China's third-tier cities and below.

For more information, please visit the company website:

For inquiries, please contact:

361 Degree International Limited

Zhan Wei

Vice President - Investor Relations

e-mail:

iPR Ogilvy PR

Tan Baoying / Lu Yushi / Chen Yinan / Yu Guo

Tel: 2136 6182 / 2169 0467 / 3920 7651 / 3920 7637

Fax: 3170 6606

e-mail:

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Title: 361? The turnover in the first half of 2016 increased by 15.7%. Continued to deepen the five major businesses to promote business development.

Keywords: quarterly performance

2016-08-16 The press release was reproduced by EQS Group.

The contents of this announcement are the sole responsibility of the issuer.

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492917??2016-08-16?

(Editor: HX666)

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