Financial Data and Key Metrics Changes - Revenue for Q4 2021 was RMB2.4 billion, up 59% year-over-year, and adjusted net profit was RMB145 million, up 242% year-over-year [4][20] - Gross profit was RMB639 million, an increase of 68% year-over-year, with a gross margin of 25.8%, compared to 24.4% a year ago [22][23] - Adjusted net margin was 5.9%, compared to about 2.7% a year ago [26] Business Line Data and Key Metrics Changes - Domestic revenue was RMB1.95 billion, up 43% year-over-year, while international revenue was RMB526 million, up 179% year-over-year [4][21] - MINISO brand revenue was RMB2.36 billion, up 57% year-over-year, accounting for 95% of total revenue [4] - E-commerce revenue was around RMB200 million, up 133% year-over-year, contributing 12% of total revenue [12] Market Data and Key Metrics Changes - In China, the average store count increased by 14% year-over-year, and average revenue per store grew by 23% year-over-year [20] - The recovery rate in overseas markets was about 55% compared to the same period in 2019, with significant growth in Europe and the Middle East [33][34] - The impact of the pandemic on domestic business was estimated at about 15% for overall GMV [31] Company Strategy and Development Direction - The company aims to expand and upgrade its store network while focusing on product and supply chain improvements [18] - Continued execution of the IP strategy and expansion of the IP library to leverage brand awareness [18] - Emphasis on consumer engagement and driving the omnichannel experience through digitalization [19] Management Comments on Operating Environment and Future Outlook - The management acknowledged challenges due to the Delta variant but expressed confidence in long-term growth potential, especially in low-tier cities [5][6] - The company expects short-term sales pressure due to the pandemic resurgence but plans to focus on product innovation and inventory management [28][44] - Future revenue guidance for Q1 2022 is projected between RMB2.45 billion and RMB2.65 billion, representing an increase of 18% to 28% year-over-year [27] Other Important Information - The company added 127 MINISO stores in China during the quarter, with 50% of new stores located in low-tier cities [6] - TOP TOY's revenue increased by more than 180% sequentially, with proprietary products accounting for a growing share of sales [15][38] - The company has a strong cash position with RMB6.8 billion in cash and equivalents as of June 30, 2021 [26] Q&A Session Summary Question: Can you share the quarter-to-date trend for both China and important international markets? - Management noted that the pandemic has impacted business, estimating a 15% overall impact on GMV for domestic operations, with tier-1 cities seeing about a 10% loss [31][32] Question: What are the strategies for TOP TOY's product mix enhancement? - Management highlighted collaborations with 200 suppliers and the development of over 3,300 SKUs, with a focus on proprietary IPs contributing significantly to sales [36][38] Question: How should we think about the development in both domestic and overseas markets? - Management emphasized ongoing investments in online channels and a focus on profitable growth, while acknowledging the need for inventory clearance due to the pandemic [41][44] Question: Can you break down the GP margin contraction? - Management attributed the margin contraction to increased promotions and inventory clearance, estimating a 1.5% decrease in GP margin due to these factors [43][44] Question: What is the current revenue mix of overseas models? - Management indicated that distributor markets account for 60% to 70% of revenue, with a stable concentration rate among top distributors [49]

MINISO Group Holding Limited (NYSE:MNSO) Q3 2021 Results Conference Call May 19, 2021 8:00 AM ET Company Participants Eason Zhang - Director, IR Guofu Ye - Chairman and CEO Steven Zhang - CFO Conference Call Participants Michelle Cheng - Goldman Sachs Lucy Yu - Bank of America Operator Ladies and gentlemen, thank you for standing by, and welcome to MINISO Group Holding Limited's Earnings Conference Call for the Third Quarter of Fiscal Year 2021 that Ended March 31, 2021. At this time, all participants are i ...

[Report Overview](index=1&type=section&id=MINISO%20Announces%20Unaudited%20Results%20for%20the%20Third%20Quarter%20of%20Fiscal%20Year%202021) [Financial Highlights](index=1&type=section&id=Financial%20Highlights%20for%20the%20Third%20Quarter%20of%20Fiscal%20Year%202021) MINISO achieved **RMB 2,229.4 million revenue** in Q3 FY2021, a **36.5% YoY increase**, with operating profit surging **304.4% YoY** and adjusted net profit growing **9.5% YoY** Q3 FY2021 Key Financial Metrics (RMB in millions) | Metric | Q3 FY2021 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Revenue | 2,229.4 | +36.5% | -3.0% | | Gross Profit | 626.5 | +18.5% | -2.5% | | Operating Profit | 161.1 | +304.4% | +196.6% | | Profit from Continuing Operations | 115.0 | -32.4% | +452.9% | | Adjusted Net Profit | 149.0 | +9.5% | +77.4% | [Operational Highlights](index=1&type=section&id=Operational%20Highlights%20for%20the%20Third%20Quarter%20of%20Fiscal%20Year%202021) The company expanded its global footprint to **4,587 stores** by Q3 FY2021, a net increase of **364 stores YoY**, entering Portugal as its **94th overseas market** Number of MINISO Stores Breakdown | Region | Mar 31, 2020 | Dec 31, 2020 | Mar 31, 2021 | | :--- | :--- | :--- | :--- | | **Total Stores** | **4,223** | **4,514** | **4,587** | | China | 2,535 | 2,768 | 2,812 | | Overseas | 1,688 | 1,746 | 1,775 | - The company entered its **94th overseas market** by opening its first store in Portugal in January 2021[3](index=3&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management emphasized accelerating domestic recovery and profitability, driven by product innovation and strong offline and eCommerce performance, with plans for lower-tier city penetration and overseas market monitoring - Strategic focus for 2021 includes further penetration into China's lower-tier cities to capture greater market share in high ROI regions[6](index=6&type=chunk) - Domestic operations showed strong recovery, with offline store revenue increasing **69.4% YoY** and eCommerce revenue growing **86.4% YoY**[6](index=6&type=chunk) - The company is developing its new business model, TOP TOY, focusing on its business model, products, sales channels, and proprietary IPs[6](index=6&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Unaudited%20Financial%20Results%20for%20the%20Third%20Quarter%20of%20Fiscal%20Year%202021) [Revenue Analysis](index=2&type=section&id=Revenue) Total revenue for Q3 FY2021 was **RMB 2,229.4 million**, up **36.5% YoY**, driven by a **74.8% YoY increase** in domestic revenue, offsetting a **27.7% YoY decline** in international revenue due to COVID-19 impacts Revenue Breakdown by Region (Q3 FY2021) | Region | Revenue (RMB million) | YoY Change | | :--- | :--- | :--- | | Domestic | 1,788.3 | +74.8% | | International | 441.2 | -27.7% | | **Total** | **2,229.4** | **+36.5%** | - Revenue per MINISO store was **RMB 473.9 thousand** in Q3 FY2021, compared to **RMB 382.6 thousand** in the same period of the prior fiscal year[9](index=9&type=chunk) [Profitability Analysis](index=3&type=section&id=Profitability) Gross profit increased **18.5% YoY** to **RMB 626.5 million**, with gross margin declining to **28.1%**; operating profit surged **304.4% YoY** to **RMB 161.1 million**, and adjusted net profit rose **9.5% YoY** to **RMB 149.0 million** - Gross margin was **28.1%**, down from **32.4% YoY**, primarily because international operations (which have higher margins) contributed only **19.8% of revenue**, compared to **37.3%** in the prior year[12](index=12&type=chunk) - Operating profit increased significantly to **RMB 161.1 million**, a **304.4% YoY increase** and a **196.6% QoQ increase**[16](index=16&type=chunk) - Profit from continuing operations was **RMB 115.0 million** The YoY decrease from **RMB 170.2 million** was mainly due to a gain of **RMB 153.1 million** from fair value changes of redeemable shares in the prior-year period, which was nil in the current quarter[17](index=17&type=chunk) - Adjusted net profit, excluding items like share-based compensation and fair value changes, was **RMB 149.0 million**, an increase of **9.5% YoY** and **77.4% QoQ**[19](index=19&type=chunk) [Expense Analysis](index=3&type=section&id=Expenses) Selling and distribution expenses rose **9.0% YoY** to **RMB 296.5 million** due to increased logistics and marketing, while general and administrative expenses decreased **5.5% YoY** to **RMB 169.5 million**, though adjusted for share-based compensation, they increased - Selling and distribution expenses increased **9.0% YoY** to **RMB 296.5 million**, mainly due to higher logistics expenses from sales recovery and increased marketing for MINISO and Top Toy brands[14](index=14&type=chunk) - General and administrative expenses decreased **5.5% YoY** to **RMB 169.5 million** However, on an adjusted basis (excluding share-based compensation), they increased from **RMB 121.7 million** to **RMB 157.0 million YoY** due to higher personnel and IT expenses[15](index=15&type=chunk) [Earnings Per Share (EPS)](index=4&type=section&id=Earnings%20Per%20Share%20(EPS)) Basic and diluted EPS from continuing operations were **RMB 0.40** for Q3 FY2021, while adjusted basic and diluted EPS were **RMB 0.52**, up from **RMB 0.44** in the prior year Earnings Per ADS (Q3 FY2021 vs. Q3 FY2020) | Metric | Q3 FY2021 | Q3 FY2020 | | :--- | :--- | :--- | | Basic & Diluted EPS (Continuing Operations) | RMB 0.40 | RMB 0.76 | | Adjusted Basic & Diluted EPS | RMB 0.52 | RMB 0.44 | [Financial Position](index=4&type=section&id=Financial%20Position) As of March 31, 2021, the company maintained a strong liquidity position with combined cash, cash equivalents, restricted cash, and other investments totaling **RMB 7,027.1 million** - The combined balance of cash, cash equivalents, restricted cash, and other investments was **RMB 7,027.1 million** (US**$1,072.5 million**) as of March 31, 2021[20](index=20&type=chunk) [Business Outlook](index=4&type=section&id=Business%20Outlook) [Q4 FY2021 Guidance](index=4&type=section&id=Q4%20FY2021%20Guidance) The company projects Q4 FY2021 revenue between **RMB 2,300 million** and **RMB 2,500 million**, representing an anticipated **48.1% to 61.0% year-over-year growth** - For Q4 FY2021, revenue is estimated to be between **RMB 2,300 million** and **RMB 2,500 million**, representing a **48.1% to 61.0% YoY increase**[21](index=21&type=chunk) [Appendix: Financial Statements](index=7&type=section&id=Appendix%3A%20Financial%20Statements) [Consolidated Statements of Financial Position (Balance Sheet)](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION) The unaudited condensed consolidated statements of financial position detail the company's assets, liabilities, and equity as of March 31, 2021, compared to audited figures as of June 30, 2020 [Consolidated Statements of Profit or Loss (Income Statement)](index=9&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20PROFIT%20OR%20LOSS) This statement presents the company's revenues, costs, and expenses, resulting in profit or loss for the three and nine months ended March 31, 2021, with comparative figures for the same periods in 2020 [Consolidated Statements of Comprehensive Income](index=11&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) This statement extends the profit or loss statement to include other comprehensive income items, such as foreign currency translation differences, to present the total comprehensive income for the period [Reconciliation of Non-IFRS Financial Measure](index=12&type=section&id=RECONCILIATION%20OF%20NON-IFRS%20FINANCIAL%20MEASURE) This section provides a detailed reconciliation of the IFRS measure (Profit/loss for the period) to the non-IFRS measure (Adjusted net profit) by adding back specific items such as share-based payment expenses and fair value changes