361 DEGREES INTERNATIONAL : ' 1H2017 Net Profit Up 16.5% Effective multi-brand strategies Sustain outstanding results

[For Immediate Release]

(incorporated in the Cayman Islands with limited liability)

(22 August 2017 - Hong Kong) - The leading international sportswear brand enterprise in China, 361 Degrees International Limited ("361˚" or the "Company", together with its subsidiaries, the "Group"; HKSE stock code: 1361), is pleased to announce its unaudited results for the six months ended 30 June 2017.

For the six months ended 30 June

Profitability Data (RMB million)

2017 2016

Change

Revenue 2,798.1 2,555.5 +9.5%

Gross profit 1,184.1 1,059.0 +11.8%

Operating profit 629.1 506.1 +24.3% Profit attributable to equity shareholders 318.3 273.1 +16.5% Basic EPS (RMB cents) 15.4 13.2 +16.7%

Effective income tax rate 38.7 35.1 +3.6p.p.

Operating ratio as percentage of revenue (%)

In the first half of 2017, the Group's revenue rose by 9.5% to RMB2,798.1 million (1H2016: RMB 2,555.5 million), mainly driven by the growth in trade fair order in the first half of 2017, which also reflected that the Chinese sportswear industry has been growing steadily. During the review period, the sales contribution from footwear increased to 46.8% of the Group's revenue while apparel sales accounted for 40.0% of the Group's revenue. In addition, 361° Kids continued its strong momentum, with revenue up 12.8% to RMB306.9 million (1H2016: RMB 272.1 million), representing 11.0% of the Group's revenue. This also demonstrated the established customer base of the kids business, a segment with huge potential for further growth.

The gross profit in 1H2017 was RMB1,184.1 million (1H2016: RMB1,059.0 million), gross margin increased by 0.9 percentage point to 42.3%.

Profit attributable to equity shareholders grew 16.5% to RMB318.3 million (1H2016: RMB273.1 million), equivalent to earnings per share of RMB15.4 cents.

During the review period, net cash generated from operating activities amounted to RMB488.1 million (1H2016: RMB372.4 million). Net cash position of the Group (including deposits and other cash equivalents) was RMB3.2 billion (1H2016: RMB2.5 billion). Trade and bills receivable turnover days significantly decreased by 11 days to 152 days. Overall working capital turnover days also decreased by 10 days to 66 days. Its strong financial position puts the Group in good stead for future business opportunities in China's sportswear industry.

Noting the satisfactory results of the Group, the Board of Directors have declared an interim dividend of RMB6.1 cents per share (1H2016: RMB5 cents per share and a special dividend of RMB5 cents per share). The Group will strive to steadily improve the dividend payout ratio, in order to reward its shareholders for their long term support.

In the first half of 2017, 361˚ continued to adopt a multi-brand strategy with 361˚, 361˚Kids and outdoor brand ONE WAY, to target the domestic mass market, kids' sport and high-end outdoor sport market respectively. As of 30 June, 2017, total number of 361° retail outlets were 5,859 in China as the Group has stayed focused on enhancing the store efficiency and profitability. The Group has encouraged distributors to develop composite stores that sell diverse products, so as to enhance footfall and further drive sales. As of 30 June 2017, the Group had 1,227 composites stores in China, representing 20.9% of total number of stores.

In the first half of 2017, there were 1,791 points-of-sale offering 361˚Kids products, of which 554 stores were stand-alone and 735 were within the 361˚ core brand authorised retail stores. During the review period, the kids business continued to grow steadily, and contributed to 11.0% of the Group's revenue, representing an increase of 12.8% year- on-year. The children underwear series of 361˚ Kids has been launched into the market in 2017 and will continue to expand its product portfolio for the children underwear series which has a higher profit potential. Our segment of children's wear business has been growing faster than the Group's main brand and will become a new growth driver of the Group in future with the full implementation of the two-child policy.

－ Cont'd －

Currently, the ski and outdoor sportswear industry in China is still in the early stage of development. However, the demand has already picked up due to government's supportive policies and the publicity given to winter sports on Beijing's host of the 2022 Winter Olympic Games. The company expects that the high-end brand ONE WAY will be benefited. As at 30 June 2017, there were 51 self-operated ONE WAY stores in China's first-tier and second-tier cities. ONE WAY has been building its brand reputation in the Greater China area through entering exclusive cooperation agreement with China Ski Association, sponsoring the national cross-country skiing team and sponsoring the national ski-jumping team. The Company will continue to expand its sales network in order to lay a sturdy foundation for rapid development of ONE WAY in the future.

In order to further diversify its business and explore growth potential, the Group has been actively expanding into overseas market during the review period. As of 30 June 2017, the Group has established 1,116, 848, 135 and 23 points-of-sale in Brazil, the United States, Europe and Taiwan, respectively. The network in Europe covers the United Kingdom, Germany, France, Austria and Switzerland. International products are also available in 125 361˚ stores located in first-tier and second-tier cities in China, and the Group intends to further expand its sales network so as to meet the demand arising from consumption upgrade in domestic market. 361˚ international has launched a series of functional running shoes, which were recommended by Runners' World, a professional running magazine. In particular, core product 361º Sensation 2 has been awarded as Best Debut in the Runner's World Germany Issue 4 in April 2017. It has also been recommended as the 14 Best Running Shoes for Spring 2017 by Women's Running Magazine and the 23 Best Running Shoes in Spring Shoe Guide by Runners' World Magazine. In addition, 361º Sensation 2 has also been included in the Triathlete Sports 2017 Guide book in the United States. During the review period, revenue from overseas business contributed about 2.3% of the total revenue of the Group, representing a growth rate of 44.2%.The Group expects international business to play an increasingly important role in terms of revenue contribution in the next three to five years.

To enhance 361°'s brand awareness and influence in the world, the Group announced to be the official partner of the 18th Asian Games 2018 in Jakarta. This marks 361°'s third consecutive sponsorship of the Asian Games following the 2010 Guangzhou Asian Games and the 2014 Incheon Asian Games, further enhancing its brand influence around the world. In terms of sports resources, the Group will maintain a close cooperative relationship with various sports celebrities and professional sports teams with the view of gaining exposure to target consumers. In the future, the Group will continue to promote its strategy of internationalisation and support the development of the whole sports industry.

－ Cont'd －

With E-commerce business growing at a fast pace, the Group also strived to build its contemporary e-commerce platform to seize growth opportunities. Currently, the Group conducts its e-commerce business mainly through the renowned e-commerce platforms in China including Tmall, Taobao, and JD, and launches online exclusive products to achieve product differentiation and create synergy between online and offline stores. For the six months ended 30 June 2017, the e-commerce business contributed RMB115.2 million of revenue and accounted for 4.1% of the Group's total revenue. The Group aims to expand online sales, and make it a significant part of the Group's revenue in the future.

The Group has been consistently strengthening its product innovation and enhancing its research and development ("R&D") capabilities to optimise product design and yield product differentiation, so as to cater to demands of different markets. The Group's R&D team timely introduced advanced materials made with cutting-edge technology and integrated popular elements into the latest products to enhance functionality for different sports. As at 30 June 2017, the Group has obtained 212 patents; during the review period, R&D expenses accounted for 2.9% of the Group's revenue. Moreover, the 361˚R&D centre in Jinjiang, Fujian completed its construction in May 2017, including five functional departments. In the future, the Group will effectively translate the large quantity of data collected and analysed by the 361˚ R&D centre into productivity, and provide sportswear with strong cost performance that combines technology and design to customers so as to enhance their sports performance.

The Chinese government has continued to support the development of the Chinese sports industry since 2014 by launching a series of encouraging policies and measures, which will encourage sport participation by the general public. Increasing per capita disposable income and rising health awareness will further drive the demand for sportswear products. As the sports industry flourishes, the Group is confident about the outlook of China's sportswear industry and 361˚. Although industry competition remains fierce, the Group has established competitive advantage in the industry and is confident that it will continue to lead the market in the next "Golden Decade" of China's sportswear industry and achieve outperformance.

- End -