Incident: The company's 2024H1 revenue was 7.759 billion yuan, +25.0% YoY; adjusted net profit was 1.242 billion yuan, +17.8% YoY (+25.5% after excluding exchange gains and losses). 2024Q2's revenue was 4.035 billion yuan, +24.1% year over year; adjusted net profit was 0.625 billion yuan, +9.4% year over year (+24.6% after excluding exchange profit and loss).
The number of stores surpassed the milestone of 7,000, and overseas stores performed well. 2024H1's domestic revenue increased 17.2% year over year to 5.027 billion yuan. Among them, MINISO's offline store revenue in China was +16.5% year over year, and the average number of stores was +16.0% year over year (net increase of 189 to 4115). The same store was 98.3% in the same period last year.
TOP TOY's revenue was +37.9% year-on-year, with the same store +13.6%, with a net increase of 47 stores to 195. Overseas revenue was +42.6% YoY to 2.732 billion yuan, the average number of stores was +21.8% YoY (net increase of 105/161 to 343/2410 directors/agents), and the same store grew strongly by 16.3%. Both MINISO overseas and TOP TOY ushered in the first half of the year with the fastest opening of stores in history, with MINISO domestic stores leading the industry.
Gross margin reached a new high, and increased investment in direct-run stores increased sales expenses. The 2024H1 company's gross profit margin was 43.7%, +4.1pct year on year, and the Q2 gross profit margin was 43.9%, a record high. It is mainly due to an increase in the share of overseas direct sales, an upgrade in domestic strategy, and an increase in TOP TOY's gross margin. The company's management expenses rate was 5%, the same as the previous year, and the sales expense ratio was +5pct to 19% year over year, mainly due to 1) the number of direct-run stores nearly doubled compared to the same period last year, direct revenue was +111.4% year over year, and expenses related to rent, depreciation, amortization, wages, etc. related to direct stores increased; 2) freight costs increased due to tight shipping.
Investment suggestions: The company's ability to operate on an interest consumer circuit has been proven many times, exploring various new store types such as Flash and MINISO LAND in China to meet the differentiated needs of consumers; improving local supply chain capabilities and opening high-potential stores overseas. At the same time, TOP TOY cultivation results are also showing. The company's medium- to long-term growth momentum is sufficient. We expect the company's net profit for 2024-2026 to 2.873/3.606/4.327 billion yuan, respectively, corresponding to PE 14.4/11.5/ 9.6X, maintaining the “Overweight” rating.
Risk warning: Store expansion falls short of expectations; industry competition intensifies; product iteration falls short of expectations.