Summary of Miniso (MNSO US) Conference Call Company Overview - Company: Miniso (MNSO US) - Sector: Specialty Retail - Market Cap: USD 13.81 billion - Current Share Price: USD 22.19 - Target Price: USD 25.10 (previously USD 27.70) [4][26] Key Points Industry and Market Dynamics - Overseas Expansion Impact: The expansion of self-operated stores overseas has negatively impacted margins, leading to a decline in operating profit margin (OPM) [2][26] - Focus Shift in China: Management has shifted focus from expansion to same-store sales growth (SSSG) in China, resulting in a narrowing decline in SSSG from double digits in 2H25 to mid-single digits in 1Q25 [2][3] Financial Performance - 1Q25 Results: Revenue growth in mainland China increased to 9% in 1Q25 from 6.5% in 4Q24, despite a reported net profit decline of 28.5% year-over-year to RMB 416 million [2][26] - Operating Profit Margin: OPM in 1Q25 decreased by 4 percentage points year-over-year to 16%, below the medium-term target of 20% [2][3] - Net Profit Estimates: The net profit estimates for 2025-27 have been lowered by 19-26% due to expectations of lower overseas margins and increased losses from the Yonghui acquisition [3][23][24] Future Projections - Long-term Outlook: The company expects overseas markets to become significant contributors to revenue and profit in the long run, but short-term investments are required to scale retail capabilities, particularly in the US [3][26] - 2025-27 Estimates: The OPM is projected to recover to 17.2% in 2027 from 16.7% in 2025, with overseas OPM expected to improve to 13.2% in 2027 [3][24] Valuation Adjustments - Target Price Reduction: The target price has been cut by 9.4% to USD 25.10 primarily due to lower earnings estimates [4][26] - Earnings Estimates: The earnings estimates for 2025 have been reduced by 19-26%, reflecting lower expectations for overseas business performance [3][26] Shareholder Returns - Buyback Program: The company has initiated a HKD 2 billion buyback program with a 50% payout ratio, estimating a total yield of approximately 5% on the stock [3][26] Important Financial Metrics - Revenue Growth: Expected revenue growth of 20.3% in 2025, with net profit projected to decline by 17.0% year-over-year [23] - Operating Profit Margin: OPM is expected to stabilize at 17% for the next few years [15][24] - EPS Estimates: EPS for 2025 is estimated at 8.26 CNY, down from previous estimates [7][14] Risks and Considerations - Margin Pressure: The ongoing pressure on margins due to overseas expansion and higher costs related to acquisitions poses a risk to profitability [2][3] - Market Conditions: The ability to achieve targeted OPM and revenue growth will depend on market conditions and the effectiveness of the company's strategic initiatives [3][24] Conclusion Miniso is navigating challenges related to overseas expansion and margin pressures while focusing on stabilizing growth in its core market of China. The adjustments in earnings estimates and target prices reflect a cautious outlook, with a long-term view that overseas markets will eventually contribute positively to the company's financial performance.
名创优品-买入 —— 海外扩张的成长阵痛影响利润率