Investment Rating - The report assigns a "Buy" rating for MINISO (09896.HK) as a first coverage [1]. Core Views - MINISO is positioned as a global leader in the trendy lifestyle retail sector, focusing on high-quality, cost-effective products for young consumers. The company has successfully expanded its presence with 7,186 stores across 111 countries as of September 30, 2024 [11][12]. - The report highlights the company's robust financial performance, with a compound annual growth rate (CAGR) of 22.35% in revenue from 2020 to 2023, and a significant recovery post-pandemic, achieving a revenue growth of 39.43% in 2023 [15][16]. - MINISO's strategic focus on IP (intellectual property) upgrades and global expansion is expected to drive future growth, with plans to increase store count significantly in high-consumption markets like North America and Europe [47][63]. Summary by Sections 1. Company Overview - MINISO is the largest private label retailer globally, established in 2009, targeting young consumers with a focus on trendy, affordable products. The company has developed two main brands: MINISO and TOPTOY [11][12]. - The company has a concentrated ownership structure, with the founders holding 62.5% of the shares, ensuring stable governance [21][23]. 2. Historical Success Factors - The company has successfully navigated the competitive retail landscape by focusing on essential consumer goods and maintaining a self-operated sales model, which enhances brand recognition [27][28]. - MINISO's product strategy emphasizes frequent new product launches and competitive pricing, supported by a strong supply chain [30][32]. 3. Future Growth Prospects - The company aims to enhance its IP strategy, with a target of over 50% of sales coming from IP-related products by 2028. Currently, IP products account for over 30% of total sales [48][49]. - MINISO plans to expand its global footprint, targeting an annual increase of 900-1,100 stores worldwide from 2024 to 2028, with a focus on high-value markets [72][63]. 4. Financial Forecast - The report forecasts MINISO's revenue to reach CNY 171.67 billion, CNY 207.55 billion, and CNY 241.04 billion for the years 2024, 2025, and 2026, respectively, with corresponding net profits of CNY 26.9 billion, CNY 33.5 billion, and CNY 40.8 billion [78]. - The company's valuation is projected to improve as it transitions from a channel retailer to a brand retailer, with a current price-to-earnings (P/E) ratio of 20.5, 16.5, and 13.5 for the years 2024, 2025, and 2026 [78][79].
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