2022-05-26 19:57Financial Data and Key Metrics Changes - Revenue for the March quarter reached RMB2.34 billion, representing a 5% year-over-year increase [5][19] - Gross profit was RMB707 million, up 17% year-over-year, with a gross margin of 30.2%, compared to 28.1% a year ago [22][24] - Adjusted net profit was RMB111 million, down from RMB149 million in the same period of 2021, with an adjusted net margin of 4.7% [25] Business Line Data and Key Metrics Changes - MINISO's offline business in China generated RMB1.56 billion, showing slight year-over-year growth, while e-commerce revenue was RMB126 million [19][8] - TOP TOY's revenue increased by nearly four times year-over-year, reaching RMB111 million [15][20] - The gross margin for TOP TOY reached 45%, with proprietary products stabilizing at around 65% [16] Market Data and Key Metrics Changes - MINISO's overseas revenue was RMB520 million, up 17% year-over-year, with significant growth in various regions: Europe (85%), North America (65%), and Latin America (45%) [12][21] - The company's market share in the global branded variety retail market increased from 5.2% in 2019 to 6.7% in 2021, and in China from 10.9% to 11.4% [6] Company Strategy and Development Direction - MINISO is focusing on brand upgrades and integrating interest-based consumption into product development, which has led to higher gross margins [6][10] - The company plans to dynamically adjust store openings in China based on pandemic developments, with a target of net addition of 350 stores in overseas markets for 2022 [9][36] - Emphasis on maintaining a strong supply chain and inventory management to cope with rising costs and inflationary pressures [8][33] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the challenges posed by the pandemic and inflation, but expressed confidence in the company's resilience and competitive advantages [5][27] - Future revenue expectations for the June quarter are projected to be between RMB2.1 billion to RMB2.4 billion, indicating a cautious outlook due to ongoing uncertainties [26] - The management highlighted that consumer demand is becoming more unpredictable, which poses challenges for inventory management [32] Other Important Information - The company has successfully launched over 1,100 new SKUs in overseas markets, contributing to significant revenue growth [14] - MINISO's cash position remains strong, with a combined balance of RMB5.49 billion as of March 31, 2022 [25] Q&A Session Summary Question: What is the management's observation on cost inflation and its sustainability? - Management noted rising transportation and raw material costs but emphasized that MINISO has not felt significant pressure due to strong gross margins and effective cost management strategies [31][33] Question: Can management provide updates on store expansion plans? - Management confirmed the guidance of adding 350 stores overseas in 2022, while in China, store openings will be adjusted based on pandemic control measures [36] Question: How does management view the impact of inflation on consumer spending and pricing strategy? - Management believes that inflation presents an opportunity for MINISO as consumers seek value, and they will maintain a balanced pricing strategy to support their value proposition [39][40] Question: What is the sales situation in China and overseas during the second quarter? - Sales in China have been soft due to stricter measures, with a 10% sequential decline in April, while overseas markets have shown strong recovery, particularly in India and Indonesia [42][43]