The Zhitong Finance App learned that Guotai Junan released a research report saying that it gave Mingchuang Premium (09896) a “gain” rating. Considering that domestic store expansion is expected to be matched and released, overseas accelerated store expansion and superimposed IP strategies are gaining momentum. There is room for growth to be expected. The target price is HK$60.3. The company's fiscal year settlement date was changed from June 30 to December 31. The new estimated revenue for 2024-26 is 173.56/209.80/25.101 billion yuan, and adjusted net profit of 28.69/34.57/4.136 billion yuan. 2023Q4 benefited from the combined strength of domestic recovery and overseas store development IP strategies, and the performance exceeded expectations; domestic consumption recovery was strong, overseas store expansion accelerated, and direct business continued to increase, so it is worth looking forward to boosting profit release.

Guotai Junan's main views are as follows:

Performance exceeded expectations, high growth in direct management unleashed operating leverage, and gross margin reached a new high.

2023q4 adjusted net profit of 661 million/yoY +77.0%, net interest rate 17.2% /yoy+2.2pct, adjusted net interest rate of 17.4% /yoy+2.5pct, +0.3 pct month-on-month; gross margin increased steadily from 35.7% in 2023Q3 to 43.1% in 2023Q4, up 3.1 pct year on year and 1.3 pct month-on-month, a record high. The performance exceeded expectations, mainly due to: ① the high-margin direct market contributed more than half of the 2023Q4 overseas business, and the overseas revenue contribution increased by 4.7 pct compared to 2023Q3; ② TOPTOY's revenue contribution increased, benefiting from the increase in the share of high-margin products, driving TOP TOPTOY's gross margin increase; ③ the gradual advancement of overseas market IP strategy, and core capabilities of IP product development, supply chain integration and globalization will drive a steady increase in gross margin.

Domestic consumption is recovering, and overseas store expansion is speeding up.

① Benefiting from the rapid recovery in domestic consumption, franchisee confidence has picked up significantly, and the expansion of stores has exceeded expectations. In the 2023Q4 single quarter, there was a net increase of 124 domestic stores, a net increase of 174 overseas stores, and a net increase of 26 for TOPTOY; the cumulative net opening in 2023 was 973, of which Miniso had a net increase of 601 domestic, 372 overseas stores, and a net increase of 31 for TOPTOY. The domestic market achieved the annual net growth target of 450-650, and overseas achieved the annual net increase target of 350-450; ② Driven by the 2023Q4 expansion of overseas stores and the combined IP strategy layout during the peak retail season, overseas direct business continued to achieve more than 80% for three quarters. For the first time in 2023Q4, it contributed more than half of overseas business revenue, and operating leverage was released, leading to a further significant increase in profitability.