The company's revenue reached a new high in the fourth quarter of 2023. The company achieved revenue of 3.841 million/ +54.0% in the fourth quarter of 2023; adjusted net profit of 661 million/yoy +77.0%. The success of the IP strategy and brand upgrade strategy led to record highs in many indicators this quarter. At the same time, performance has also been excellent since 2024. Domestic and offline GMV increased by nearly 13% in January-February, and is still at the leading level in the industry despite a high base after the epidemic last year.
At the same time, the company plans to distribute a special cash dividend of US$0.0725 per share, totaling approximately RMB 650 million.
Looking at domestic business, in the fourth quarter of 2023, the company achieved domestic revenue of 2.35 billion yuan/yoy +55.7%. MINISO offline store revenue increased 63.2% year on year, net increase of 124 stores to 3,926, single store revenue and number of stores increased 39.2%/17.2% year on year respectively; TOPTOY's revenue exceeded 190 million yuan/ +90.5%, adding 26 stores to 148, and driving a 59.4% year-on-year increase in single store revenue through category adjustments.
In terms of overseas business, the company's overseas revenue in the fourth quarter of 2023 was 1.49 billion yuan/yoy +51.4%, a net increase of 174 stores to 2,487. Among them, overseas direct sales revenue increased 86% year over year, accounting for more than 50% of overseas revenue for the first time. Overseas GMV increased 38% year-on-year in the quarter, with direct management and agency sales up 76%/27% year over year respectively; comparable same-store sales increased 19%, with direct/agency markets growing 39%/13% respectively.
The gross margin has increased dramatically, and the sales expense ratio has risen somewhat. The company's gross margin/adjusted net margin for the fourth quarter of 2023 was 43.1%/17.2%, respectively, +3.1 pct/+2.2 pct, mainly due to 1) the optimization of overseas market product portfolios while increasing gross margin in overseas markets; 2) product restructuring led to an increase in gross margin; and 3) TOPTOY's gross margin increase. In terms of cost ratios, sales expense ratio/management expense ratios were 18.8%/4.9%, respectively, +2.1pct/-0.1pct. The increase in sales expenses was mainly due to 1) business growth driving increased personnel related expenses, logistics and intellectual property licensing costs; 2) increased asset depreciation costs in the direct management market; 3) increased overseas marketing and advertising expenses.
Risk warning: Macroenvironmental risks, new product launches fall short of expectations, industry competition intensifies.
Investment advice: The company's overall performance continues to grow rapidly through its strong operational capabilities and supply chain efficiency. Gross margin has reached a record high, and its leading position as a global discount retailer continues to be consolidated. In the future, the company will continue to improve the performance of domestic MINISO stores and increase the expansion of overseas MINISO stores to drive an increase in revenue share; at the same time, TOP TOY will achieve profits through category restructuring and store operation optimization. Considering that the company's rapid opening of stores in overseas direct markets led to an increase in overall revenue and gross profit levels, and TOP TOY's net profit margin of its own brand increased through category focus, we raised FY2024-2026 net profit to 25.79/31.76/38.02 (original value was 22.91/28.42/3.44 billion yuan), corresponding PE was 18/15/12 times, maintaining a “buy” rating.