In The First Half Of The Year, The Revenue From Basketball Is 3 Billion 200 Million, And Will Serve The Middle Class With New Products.

The local sports apparel enterprise, 360 degree International Limited (hereinafter referred to as "31st degree"), released its interim results in 2019 in August 20th. During the reporting period, the company achieved operating income of 3 billion 237 million yuan, an increase of 7.3% over the same period, a gross profit of 1 billion 322 million yuan, an increase of 5.3% compared with the same period last year, and a profit of 367 million yuan for equity holders, an increase of 9.7% over the same period last year. The basic EPS17.8 score increased by 9.9% over the same period last year.


It plans to issue an interim dividend of 8.2 cents per share (7.2 cents) per share and a special dividend of 1.1 cents per share (1 yuan) per share, with a total dividend yield of 46.6%, the highest since 2017.


During the reporting period, the business of 360 children's clothing and other classified sales (sole sales) contributed 12% and 1.2% of the total revenue respectively. The remaining 86.8% revenue is mainly contributed by sales of 361o core brand products, 361o international and e-commerce business. The two core products of the group, namely footwear and clothing, showed an upward trend, representing an increase of 3.8% and 12.1% respectively. During the period, more than 85%2019 years of spring and summer products have been delivered and confirmed earnings. In the second half of 2019, delivery was mainly for autumn and winter products in 2019.


During the reporting period, the ratio of footwear sales to total revenue from 360% to 43.7% was slightly increased from 45.2% to 43.7%, compared with the slight increase in clothing sales from 40.1% to 41.9% over the same period last year. Footwear products remain the most powerful driving force for the group during the period.


The average wholesale price of footwear and clothing increased by 8.6% and 32%, respectively, with the introduction of some identification products and the proportion of clothing sales in the same period. However, sales of footwear and clothing decreased by 4.4% and 15% respectively, mainly due to the group's cautious reduction in production in response to market reaction.


During the reporting period, the sales volume of online sales of 31 degree 80% owned e-commerce business increased by 28.5% to 423 million yuan (2018: 329 million yuan), accounting for about 13.1% of the total revenue in the period. It is believed that e-commerce business will continue to contribute and will continue to grow.


According to public information, 31st degree international mainly engaged in the production and sale of sporting goods including footwear, clothing and accessories. The company is divided into two major business segments: adult and children's wear.


According to the financial report, in the year of 2018, the revenue and profits of 31st degree were all very poor. In terms of business income, the impact of the channel optimization plan investment, Sino US trade war and brand remolding in the second half of 2018 was basically the same as that in 2017. The gross profit margin decreased by 1.2% due to the fast growth of the electricity supplier (gross margin below the main brand) and the provision of 12 million yuan of stock, while the operating interest rate dropped by 4% compared with the increase in advertising fees and R & D expenses. In addition, the effective tax rate resulted from the 80 million loss caused by the exchange loss, the net profit fell 33% over the same period last year. Thirty one degree expects 2018 to be an overrun year for the company, expecting a new recovery in 2019 and beyond.


At present, 31st degree is mainly promoting the brand remolding plan launched on the occasion of the 10th anniversary listing of the company, striving to improve the brand image and gradually making consumers different from the past consumer impression on the 361. The main purpose of the plan is to achieve several objectives:


1, we should make adjustments from the entire supply chain, from product planning to development to production and a series of adjustments and plans, and find an internationalized supplier and partner that is more suitable for 360 degrees.


2, search for international talents to join the team. Comprehensive upgrading of technical materials, supply chain coordination, etc.


3, the positioning of new products is internationalized. In the first quarter of 2020, new products (the first four quarter of 2019 will probably take up 10% in the form of replenishment), aiming at the middle class group. The latest trend is to start with basketball shoes and launch a story pack. The new products and plans are launched at the beginning of the market and will not be particularly concerned about income. Therefore, there will be no big change in the supply chain this year because there will not be a very large volume.


4, the plan is an incremental concept, the original classic will continue to cover the low line crowd, brand remodeling is a time trial and continuous trial plan, not aggressive.


5, in addition, children's clothing is developing better at present. There will be no brand remolding, mainly ONEWAY and main brand.


Guo Yuan International analyst Gao Xiang believes that in the long run, if brand remolding can effectively improve the brand image of 360 degrees, it will be very helpful for the company's future development of high-end brand matrix, because at present there are almost no space for the extension of several major brands of local brands, and the next is the promotion of their own internal business efficiency, one is the competition of multi brand development, so the overall brand image is very important.


It is reported that the future positioning of the company is to create a "starting line" brand that distinguishes itself from the international giants. The so-called "starting line" is relative to the "finish line" brand, it is to let more people participate in sports to find pleasure, feel life, encourage consumers to exercise, provide better quality at the price of civilians, and no longer catch up with top brands as before.


The first step is to break through basketball, but not to say that basketball will be the focus of the brand in the future. In the future, every field will be concerned by the company. As we all know, Chinese basketball fans 450 million, 29.5% of young consumers buy basketball related products. But at the same time, 750 basketball lovers, a basketball court, 1.2% basketball community, commuting time 48min. This greatly limits the movement.


Therefore, in order to change the phenomenon of "looking for someone in Basketball", Homegame--bringbasketballhome launched a project. Walk into the Chinese community, install the basketball rack, provide free training, let more people participate in basketball, and constantly cultivate brand awareness.


The goal is: 2020 increase 100 venues; 2021 increase 200 venues; 2022 increase 1000 venues. It is estimated that 1000 of the stadium will increase 100000 of the consumer volume. After several months, the cooperation between the company and a NBA team is already in progress. This is a concept of urban district. Expect the future to become a synonym for community basketball. In the first quarter of next year, launch will be the project and product.


In Gao Xiang's view, the strategy of 331 degree is worth affirming, but the concrete effect needs time to test. What we need to see is that the multi brand route of the local sports brand is already the general trend of the future. On the 361 hand, if brand remolding can enhance image growth in the next few years and drive profit growth, its future deserves attention.