Core Viewpoint - The company reported a revenue growth of 18.9% year-on-year in Q1 2025, but profits decreased by 28.9% during the same period, indicating potential challenges in profitability despite revenue growth [2]. Group 1: Financial Performance - In Q1 2025, the company achieved a revenue of 4.427 billion yuan, reflecting an 18.9% increase year-on-year, while the profit for the period was 417 million yuan, down 28.9% [2]. - Adjusted net profit for the period was 587 million yuan, showing a decline of 4.8% year-on-year [2]. - The comprehensive gross margin for Q1 2025 was 44.2%, up by 0.8 percentage points compared to the previous year, driven by increased overseas market revenue and improved product mix [3]. Group 2: Brand Performance - The MINISO brand generated a revenue of 4.09 billion yuan in Q1 2025, marking a 16.5% year-on-year increase, supported by a 9.1% growth in domestic revenue and a 30.3% increase in overseas revenue [3]. - The TOP TOY brand reported a revenue of 340 million yuan, which is a significant growth of 58.9% year-on-year, primarily due to an increase in the average number of stores [3]. Group 3: Store Adjustments and Shareholder Returns - As of the end of Q1 2025, the total number of stores reached 7,768, with a net decrease of 12 stores quarter-on-quarter; domestic MINISO stores decreased by 111, while overseas stores increased by 95 [4]. - The company has been optimizing its domestic store structure to enhance store quality [4]. - Shareholder returns amounted to 990 million yuan, including cash dividends of 100 million USD and share buybacks totaling 260 million yuan [4].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Insights - The company reported a revenue of 4.427 billion yuan for Q1 2025, representing a year-on-year growth of 18.9%, while net profit decreased by 28.9% to 417 million yuan [1]. - The adjusted net profit for Q1 2025 was 587 million yuan, a decline of 4.8% year-on-year [1]. - The overall gross margin increased by 0.8 percentage points to 44.2% in Q1 2025, driven by an increase in overseas market revenue and improvements in product mix [2]. - The MINISO brand revenue grew by 16.5% year-on-year, with overseas revenue increasing by 30.3% due to a 24.6% rise in average store count [2]. - The total number of stores reached 7,768 by the end of Q1 2025, with a net decrease of 12 stores, while domestic stores decreased by 111 and overseas stores increased by 95 [3]. - The company returned a total of 990 million yuan to shareholders, including 100 million USD in cash dividends and 260 million yuan in share buybacks [3]. Financial Performance Summary - For 2025, the company expects revenues of 20.415 billion yuan, with a growth rate of 20.1% [5]. - The projected profit attributable to equity shareholders for 2025 is 2.701 billion yuan, reflecting a growth rate of 2.8% [5]. - The earnings per share (EPS) for 2025 is estimated at 2.16 yuan [5]. - The company’s return on equity (ROE) is projected to be 20.8% for 2025 [12]. Strategic Focus - The company is focusing on optimizing store quality and structure domestically while maintaining significant investments in overseas markets [4]. - The report highlights the importance of releasing operational leverage in overseas markets during peak seasons [4].