The company released the 23Q4 financial report. The 23Q4 company achieved revenue of 3.84 billion/ +54.0%, including Mingchuang's domestic revenue of 2.16 billion/ +55.6%, Mingchuang's overseas revenue of 1.49 billion/+51.5%, TOP TOY brand revenue of 190 million/ +89.9%, adjusted net profit of 660 million/ +77.0%, and an adjusted net profit margin of 17.2% /+2.2pct. The consumer market of interest is broad. The “1+3” moat of the company's “1 Chinese supply chain+global IP+global design+global channel” is stable. They are optimistic about the steady expansion of famous companies domestically, the overseas market continues to grow at a high rate, and the long-term growth brought about by TOP TOY's continuous incubation. Maintain a “Highly Recommended” rating.
Performance exceeded expectations, and profitability continued to improve. The 23Q4 company achieved revenue of 3.84 billion/+54.0%, adjusted net profit of 660 million/ +77.0%, and an adjusted net profit margin of 17.2% /+2.2pct. By region, domestic Mingchuang's revenue for the quarter was 2.16 billion/ +55.6%; Mingchuang's overseas revenue was 1.49 billion million/ +51.5%, of which direct market revenue was 770 million/ +86%, and agency market revenue was 7.2 million/ +26%. TOP TOY brand revenue was 190 million/ +89.9%.
Domestic same stores are growing rapidly, and overseas direct-run stores are expanding at an accelerated pace. In 23Q4, the total number of Mingchuang stores reached 6413, the number of domestic stores was 3,926, a net increase of 124 over the previous month, 178 new stores were opened, 54 stores closed, and the closing rate remained low at 1.4%; offline GMV of domestic stores increased 66% year over year, and GMV of the same store increased 32%. In terms of overseas markets, the number of overseas stores at the end of the quarter was 2,487, a net increase of 174, of which the direct sales market had a net month-on-month increase of 108 and the agency market had a net month-on-month increase of 66; in the current quarter, GMV in the overseas market was 3.57 billion/ +38% year on year, and revenue was 1.49 billion/+51%, and the revenue growth rate was significantly faster than GMV's growth rate. TOP TOY had a net month-on-month increase of 26 stores this quarter. As individual store profits improved, the speed of opening stores accelerated markedly.
The gross margin continued to rise, and the sales expense ratio increased. The gross margin of the 23Q4 company was 43.1% /+3.2pct, and the gross margin reached a new high. The sharp increase in gross margin was mainly due to TOPTOY's improved gross margin and the increase in gross margin in overseas markets. 23Q4 The company's sales/management expenses rates were 18.8%/4.9%, respectively, +2.1/-1.0pct. The increase in sales rates was mainly due to part of the company's overseas direct store development expenses, which are expected to be relatively stable throughout the year.
Maintain a “Highly Recommended” investment rating. The consumer market of interest is broad. The “1+3” moat of the company's “1 Chinese supply chain+global IP+global design+global channel” is stable. They are optimistic about the steady expansion of famous companies domestically, the overseas market continues to grow at a high rate, and the long-term growth brought about by TOP TOY's continuous incubation. The company's adjusted net profit for FY2024E/25E/26E is estimated to be 25.1/31.5/3.84 billion, respectively, maintaining the “Highly Recommended” rating.
Risk warning: Store expansion falls short of expectations, and single store revenue growth falls short of expectations.