361 Degrees International (SEHK:1361) Could Be 65% Below Fair Value After Q2 Sales Update

Q2 2026 sales update and why it matters for 361 Degrees International

361 Degrees International (SEHK:1361) reported its Q2 2026 sales update, with mid to high single digit retail sales growth for core and kids products, and high single digit growth in e-commerce channels.

See our latest analysis for 361 Degrees International.

Despite the Q2 2026 sales update pointing to mid to high single digit growth across core, kids and e-commerce, 361 Degrees International’s share price is HK$4.53. The 7 day share price return is up 7.09%, while the 90 day share price return is down 35.10%, and the 5 year total shareholder return is up 47.58%. This suggests that near term momentum has cooled compared with longer term gains.

If this update has you looking beyond just one sportswear stock, it could be a good moment to widen your watchlist with 105 top founder-led companies

Given the recent share price setback, alongside mid to high single digit sales growth, does 361 Degrees International now offer a skewed risk reward in favour of new buyers, or is the recent bounce already pricing that in?

Price to earnings of 6.5x for 361 Degrees International: Is it justified?

Based on the preferred valuation yardstick, 361 Degrees International is trading on a P/E of 6.5x, which screens as inexpensive relative to both peers and the wider Hong Kong luxury sector at the current share price of HK$4.53.

The P/E multiple compares what investors are paying today for each unit of current earnings. For a consumer durables and sportswear company like 361 Degrees International, it is a quick way to gauge how the market is weighing its earnings profile, brand strength and competitive position against other listed stocks.

Here, the gap is clear. The stock trades on a P/E of 6.5x against a peer average of 20x and a Hong Kong luxury industry average of 8.4x. This is also below an estimated fair P/E of 7.9x that the market could move towards if sentiment shifts. Earnings growth of 14% over the past year, alongside higher net profit margins at 11.7% compared with 11.4% a year earlier, sits against this lower multiple. This points to the market assigning a discounted price to those earnings at present.

Explore the SWS fair ratio for 361 Degrees International

Result: Price to earnings of 6.5x (UNDERVALUED)

However, 361 Degrees International still faces risks, including softer China sportswear demand and any pressure on margins that could challenge the current low P/E case.

Find out about the key risks to this 361 Degrees International narrative.

Another view on 361 Degrees International’s value

The low P/E makes 361 Degrees International look inexpensive, but our DCF model paints an even stronger picture of value. With the stock at HK$4.53 and the SWS DCF fair value at HK$13.01, the shares screen as heavily undervalued on future cash flows.

For anyone weighing which signal to trust more today, the key question is whether the gap between current price and DCF fair value reflects genuine mispricing or risks that the P/E alone does not capture.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out 361 Degrees International for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 224 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With 361 Degrees International showing both appealing valuation signals and clear areas of concern, it is worth moving quickly to review the underlying data and decide whether the balance of risks and rewards fits your own approach, starting with the 4 key rewards and 2 important warning signs.

Looking for more investment ideas beyond 361 Degrees International?

If 361 Degrees International has you thinking about what else might fit your portfolio, do not stop here, the wider market still holds plenty of potential ideas.

• Target potential mispricing by scanning companies that combine quality fundamentals with attractive pricing using the 224 high quality undervalued stocks.
• Strengthen your income stream by reviewing companies that feature robust payouts and consistency through the 470 dividend fortresses.
• Focus on resilience first by checking companies that pair lower risk profiles with solid metrics via the 291 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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