Summary of Miniso (MNSO) Conference Call Company Overview - **Company**: Miniso (MNSO) - **Industry**: Retail, specifically in the discount variety store segment Key Takeaways 1. **Same Store Sales Growth (SSSG)**: - Miniso China has maintained strong SSSG momentum, with management projecting low teens percentage growth into Q4, supported by a low base and improved operations such as new product updates and inventory preparation [1][2] 2. **Store Upgrades**: - The pace of store upgrades in China is expected to accelerate, with management aiming to upgrade more than 200 stores in 2026, leveraging improved sales performance and team capabilities [1][2] 3. **US Market Performance**: - Management is confident in achieving 50%-55% sales growth in the US market for Q4, despite a contraction in gross profit margin (GPM) due to a higher local procurement mix [1][10] - The local procurement mix has increased to approximately 50% from 20-30% in Q3, which has compressed GPM but improved inventory turnover [10] 4. **Operational Efficiency**: - Improvements in operational efficiency have been noted, including enhanced merchandising cadence and inventory health, with fulfillment rates raised to 80-90% to avoid stockouts [11] - New product lead times have been significantly reduced, and inventory days have been shortened due to a 10-20% SKU reduction [11] 5. **Product Portfolio and IP Strategy**: - Miniso's diversified IP portfolio is seen as a strength, helping to capture market opportunities and mitigate risks. The performance of self-owned IPs has exceeded expectations, with notable sales figures for various IPs [1][11] 6. **Future Growth Plans**: - Management reiterated a five-year growth plan with a revenue CAGR of over 20%, targeting a 25% sales growth for 2025 and an annual store count increase of 900-1,000 stores [12] 7. **Valuation and Investment Outlook**: - Current valuation is considered undemanding, with a projected low-mid teens P/E for 2025, and the company is viewed as having high growth visibility. A "Buy" rating is reiterated [2][13] 8. **Risks**: - Key risks include lower store productivity in China, geopolitical risks, and potential higher operating expenses. There are also concerns regarding the performance of Yonghui, a partner in the business [13] Additional Insights - **Market Dynamics**: - The company has faced challenges in some overseas markets due to macroeconomic factors and foreign exchange headwinds, but inventory levels remain low, with sell-through growth outpacing sell-in growth [1][2] - **Sales Performance**: - The US market has shown strong topline growth, with specific product themes like Zootopia contributing positively to sales [10][11] - **Store Expansion**: - The US market is on track to net open approximately 80 stores this year, with expectations for similar or faster additions in 2026 [10] This summary encapsulates the essential points discussed during the conference call, highlighting Miniso's current performance, future strategies, and potential risks in the retail market.

Core Viewpoint - MINISO's CEO Ye Guofu announced a dual-driven strategy of "International IP + Own IP," emphasizing the potential for growth once the company's own IP is strengthened [2][10]. Financial Performance - In the first half of the year, MINISO achieved revenue of 9.393 billion yuan, a year-on-year increase of 21.1%, while profit decreased by 23.1% to 906 million yuan due to investment losses in Yonghui Superstores [4]. - The gross profit increased by 22.6% to 4.157 billion yuan, with the second quarter showing a revenue growth rate of 23.1%, surpassing the previous guidance of 18% to 21% [4]. - Revenue from the domestic market reached 5.11 billion yuan, growing 11.4%, with a second-quarter growth rate of 13.6% [4]. International Market Expansion - The overseas market contributed 3.53 billion yuan in revenue, a year-on-year increase of 29.4%, with the second quarter's revenue at 1.94 billion yuan, growing 28.6% [6]. - The U.S. market saw revenue growth exceeding 80%, and same-store sales showed improvement [6]. Store Growth and Strategy - As of the end of June, MINISO had a total of 7,905 stores, with a net increase of 842 stores year-on-year, including 190 new stores in the domestic market and 554 overseas [7]. - The company plans to add over 500 overseas stores by 2025 while focusing on store quality rather than quantity [7]. Future Projections - MINISO raised its full-year revenue growth guidance to over 25%, up from the initial 22.8% [9]. - The adjusted operating profit for the year is expected to be between 3.65 billion and 3.85 billion yuan [9]. IP Development Strategy - Ye Guofu highlighted the importance of developing the company's own IP, stating that the previous reliance on international IP was insufficient [10]. - The first self-owned IP, "Right Right Sauce," is projected to achieve sales of 400 million yuan this year and exceed 1 billion yuan next year [11]. - Other IPs, such as TOP TOY's "Kuromi," are also expected to see significant revenue growth, indicating a successful model for self-owned IP development [11].