361 DEGREES INTERNATIONAL : Announcements and Notices - 2018 Annual Results Announcement

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

361 Degrees International Limited 361 ܓ਷ყϞࠢʮ̡

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1361)

2018 ANNUAL RESULTS ANNOUNCEMENT

The board (the "Board") of directors (the "Directors") of 361 Degrees International Limited (the "Company") is pleased to announce the audited consolidated results of the Company and its subsidiaries (together, the "Group") for the year ended 31 December 2018. This announcement, containing the full text of the 2018 Annual Report of the Company, complies with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to information to accompany preliminary announcements of annual results.

1

361 DEGREES INTERNATIONAL LIMITED

Stock Code: 1361

ANNUAL REPORT

CONTENTS

• 02 Five-Year Financial Summary

• 04 Chairman's Statement

• 08 Management Discussion and Analysis

• 28 Report of the Directors

• 38 Corporate Governance Report

• 47 Directors and Senior Management

• 50 Independent Auditor's Report

• 54 Consolidated Statement of Profit or Loss

• 55 Consolidated Statement of Profit or Loss and

  Other Comprehensive Income

• 56 Consolidated Statement of Financial Position

• 58 Consolidated Statement of Changes in Equity

• 59 Consolidated Cash Flow Statement

• 61 Notes to the Financial Statements

• 115 Shareholder Information

• 116 Company Information

ANNUAL REPORT 2018

01

FIVE-YEAR FINANCIAL SUMMARY

For the year ended 31 December

2018	2017	2016	2015	2014
Profitability data (RMB'000)
Revenue	5,187,446	5,158,200	5,022,678	4,458,701	3,906,286
Gross profit	2,105,871	2,156,385	2,109,908	1,822,963	1,596,796
Operating profit	782,327	987,552	949,325	914,669	724,165
Profit attributable to equity shareholders	303,665	456,706	402,652	517,639	397,642
Earnings per share
- basic (RMB cents)	14.7	22.1	19.5	25.0	19.2
- diluted (RMB cents)	14.7	22.1	19.5	25.0	19.2
Profitability ratios (%)
Gross profit margin	40.6	41.8	42.0	40.9	40.9
Operating profit margin	15.1	19.1	18.9	20.5	18.5
Margin of profit attributable to equity
shareholders	5.9	8.9	8.0	11.6	10.2
Effective income tax rate (Note 1)	46.5	39.6	40.5	32.9	33.3
Return on shareholders' equity (Note 2)	5.3	8.3	7.6	10.1	8.2
Operating ratios
(as a percentage of revenue) (%)
Advertising and promotion expenses	10.7	9.8	11.4	12.8	16.7
Staff costs	8.8	9.0	8.7	8.3	8.4
Research and development	4.1	3.4	3.7	3.1	2.4
Notes:

• 1) effective income tax rate is equal to the income tax divided by the profit before taxation.

• 2) return on shareholders' equity is equal to the profit attributable to equity shareholders divided by the average opening and closing equity attributable to equity shareholders of the company.

02

361 DEGREES INTERNATIONAL LIMITED