Summary of the Conference Call for Miniso Company Overview - The conference call focuses on Miniso, a retail company, discussing its valuation and business performance in the context of the broader market and its competitor, Yonghui Superstores [3][5]. Key Points Valuation and Market Perception - Miniso's current market capitalization is approximately 50 billion HKD, while projected net profits for 2025 and 2026 are 3.45 billion and 4.2 billion RMB respectively. Based on a 20x P/E ratio, Miniso should be valued at over 80 billion RMB, around 90 billion HKD. The market's pessimistic outlook on Yonghui's losses is a primary reason for Miniso's undervaluation [3][4][5]. Yonghui Superstores Impact - The market anticipates Yonghui will incur a loss of 6 billion RMB next year, which is considered overly pessimistic. Historical data shows Yonghui's maximum loss was around 4.5 billion RMB, and the company is undergoing store adjustments and supply chain restructuring to improve profitability [4][5]. Domestic Business Performance - Miniso's domestic revenue share is expected to fall below 55% this year. Despite a 4% year-on-year decline in same-store sales, recovery is strong, with sales returning to 96%-100% of previous levels. The company plans to open 450 to 550 new stores to drive growth, minimizing reliance on same-store sales [4][6]. Overseas Business Growth - The overseas segment is identified as a core growth driver, benefiting from accelerated expansion, foreign exchange gains, and tax refunds. The depreciation of the RMB is projected to yield tens of millions in net profit, and the U.S. tax refund policy will continue to positively impact finances [4][7]. Market Conditions and Consumer Confidence - Recent consumer policies and increased foreign investment in Hong Kong stocks are favorable for new consumption sectors, enhancing investor confidence in Miniso and similar companies. The new consumption sector is undergoing a revaluation after two years of being undervalued [4][8]. Future Performance Expectations - Positive catalysts are expected following the Q2 earnings release, particularly in May. The market is focused on future guidance and expectations regarding Yonghui. The Q4 performance is already prepared, and the domestic business has experienced a downturn, leading to a currently low valuation [4][9]. Potential Risks - A recent safety issue regarding disposable underwear has minimal impact on Miniso, as this product accounts for a very small portion of revenue. Even if sales of this product were halted, the profit impact would be negligible [4][10][11]. Operational Strategy in the U.S. - Following the appointment of a new CEO in the U.S., the focus will be on optimizing revenue and costs, controlling store opening speed, and reducing rent and labor costs to enhance profitability. The overseas business is expected to grow at 40%, with direct stores growing at 60% and agency stores at 20% [4][12]. Profit Forecast and Valuation Outlook - Profit forecasts for the next two years suggest net profits corresponding to P/E ratios of 14x and 11x. The current valuation is around 10-11x, indicating significant undervaluation. A correction to a reasonable valuation of around 20x is anticipated, making Miniso one of the most promising companies this year [4][13].
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