Core Viewpoint - The company is experiencing a turning point in its main business operations, with preliminary verification of mid-year performance, and is expected to see continued improvement in domestic and international performance driven by the optimization of the large store model and proprietary IP strategy [1][2]. Group 1: Financial Performance - In Q2, the company achieved revenue of 4.966 billion, a year-on-year increase of 23.1%, exceeding the previous guidance of 18%-21% [2]. - Adjusted net profit for Q2 was 0.692 billion, a year-on-year increase of 10.6%, with an adjusted net profit margin of 13.9%, down 1.6 percentage points year-on-year [2]. - The company has raised its full-year guidance, expecting Q3 overall revenue growth of 25%-28% and adjusted operating profit to be between 3.65 billion and 3.85 billion [2]. Group 2: Domestic Brand Performance - Domestic revenue for the MINISO brand in Q2 was 2.62 billion, a year-on-year increase of 13.6%, with same-store sales turning positive [3]. - The company opened 30 new stores in Q2, reversing the trend of net store closures from the first quarter [3]. - Key drivers for same-store growth include improved organizational structure, enhanced product supply, and optimized store operations during holidays [3]. Group 3: International Brand Performance - Overseas revenue for the MINISO brand reached 1.94 billion, a year-on-year increase of 28.6%, with a net addition of 94 stores in Q2 [4][5]. - The North American market strategy focuses on large stores and cluster openings, with new stores achieving 1.5 times the sales efficiency of older stores [5]. - The company plans to continue expanding its overseas presence, with a target of adding over 500 new stores this year [4]. Group 4: TOPTOY Brand Performance - TOPTOY achieved revenue of 0.4 billion in Q2, a year-on-year increase of 87%, with a net addition of 13 stores [6]. - The brand's gross margin has significantly improved, and same-store sales have shown single-digit growth [6]. - Future plans include enhancing sales contributions from proprietary brands and IP, focusing on markets with high potential for toy consumption [6]. Group 5: Strategic Initiatives - The company is implementing a dual strategy of opening large stores and developing proprietary IP, with significant progress in both domestic and international markets [7]. - The MINISO LAND and flagship stores are designed to enhance customer experience and increase sales per square meter [7]. - The proprietary IP strategy includes collaborations with artists and the launch of new products, aiming for a total GMV of 1 billion from proprietary IP products this year [7].

Investment Rating - The investment rating for the company is "Outperform the Market" (maintained) [1][6][23] Core Views - The company is showing signs of a turning point in its main business operations, with mid-year performance beginning to validate this trend. The ongoing implementation of the large store model and proprietary IP strategy is expected to drive continuous improvement in both domestic and international performance [2][3][23] - The domestic large store strategy is optimizing store structure and improving operational efficiency, leading to gradual improvements in same-store sales. The IP strategy is enhancing global competitiveness and significantly driving overseas business and the TOP TOY brand development [2][3][23] Summary by Sections Financial Performance - In Q2, the company achieved revenue of 4.966 billion, a year-on-year increase of 23.1%, exceeding the previous guidance of 18%-21%. Operating profit reached 836 million, up 11.3% year-on-year, while adjusted net profit was 692 million, reflecting a 10.6% increase year-on-year [3][23] - The management has raised the full-year guidance, expecting Q3 overall revenue growth of 25-28%, with domestic MINISO brand revenue growth in the mid to high double digits and overseas revenue accelerating to 30%-35% [3][23] Domestic Business - The domestic revenue for the MINISO brand in Q2 was 2.62 billion, a year-on-year increase of 13.6%. Same-store sales have turned positive, with a net increase of 30 stores in Q2, reversing the previous trend of store closures [9][10] - Same-store growth is driven by improved customer spending and enhanced store conversion rates, despite a slight decline in foot traffic [9][10] Overseas Business - Overseas revenue for the MINISO brand reached 1.94 billion, a year-on-year increase of 28.6%. The company plans to add over 500 new stores globally this year, with significant growth in the North American market [13][14] - The North American strategy focuses on large stores and cluster openings, enhancing brand presence and operational efficiency [14][16] TOP TOY Brand - TOP TOY achieved revenue of 400 million in Q2, a year-on-year increase of 87%. The brand is focusing on enhancing its own brand and IP sales contributions, with plans for global expansion [17][19] Strategic Initiatives - The company is advancing its large store strategy both domestically and internationally, with significant investments in MINISO LAND and flagship stores, which have shown higher sales efficiency compared to smaller stores [18][19] - The proprietary IP strategy has evolved into a dual-driven model, focusing on both artist IP and top international licensed IP, with plans to launch self-owned IP products in overseas markets [19][23]