MNSO(MNSO) 海通国际·2024-12-02 14:37Investment Rating - Maintain OUTPERFORM rating with a target price of USD 25.20 [1] - Current price is USD 20.01 as of November 29, 2024 [1] - Market capitalization stands at USD 6.25 billion [1] Core Views - The company has passed its trough, and the positive guidance reflects management's confidence [1] - Domestic revenue for the Miniso brand grew by 6% YoY, reaching RMB 2.44 billion [1] - Overseas revenue surged by 40% YoY to RMB 1.81 billion, with 183 net new stores added QoQ [1] - The company expects Q4 revenue growth of 25%-30%, driven by strong performance in both domestic and international markets [1] Financial Performance - Q3 revenue reached RMB 4.52 billion, up 19% YoY [1] - Adjusted net profit was RMB 686 million, a 7% YoY increase, with an adjusted net profit margin of 15.2% [1] - Gross profit margin hit a record high of 44.9%, up 3.1 percentage points YoY [1] - Sales and distribution expense ratio increased to 22%, primarily due to higher costs associated with directly operated stores [1] Domestic Operations - Domestic revenue grew by 9% YoY to RMB 2.71 billion [1] - The company added 135 net new stores in Q3, bringing the total to 4,250 stores in China [1] - O2O business grew nearly 80% YoY, contributing 7%-8% of domestic revenue [1] - TOPTOY, the company's sub-brand, achieved a 50% YoY revenue growth and has been profitable for four consecutive quarters [1] International Expansion - Overseas revenue grew by 40% YoY, with 183 net new stores added in Q3 [1] - The company raised its 2024 store opening guidance to 650-700 stores, up from the previous 550-650 [1] - North American operations have stabilized, with cost structure optimization underway [1] - Local sourcing in the US has reached 30%, with further room for improvement [1] Valuation and Forecast - Revenue for 2024-26 is projected to be RMB 17.2/21.6/25.6 billion, with adjusted net profit of RMB 2.80/3.53/4.23 billion [1] - The company is valued at 20x 2024 PE, with a target price of USD 25.2 [1] - Q4 revenue is expected to grow by 29% YoY to RMB 4.94 billion, with adjusted net profit of RMB 880 million [1] Strategic Initiatives - The company is focusing on O2O, IP-driven products, and precise marketing to boost same-store sales [1] - A new store matrix strategy, including MINISO Land and flagship stores, has been introduced to cater to different customer segments [1] - The acquisition of a 29.4% stake in Yonghui Superstores is progressing as expected, with the deal set to close in Q1 2025 [3]