According to the Wisdom Finance APP, Huafu Securities released a research report stating that they believe there is still room for valuation improvement for Miniso (09896), initiating coverage with a 'buy' rating. It is expected that the company will achieve revenue of 16.572/19.031/21.161 billion yuan from 2024 to 2026, with a net income attributable to the parent company of 2.88/3.321/3.715 billion yuan. Miniso, as a leading retail brand with IP characteristics, relies on a high-quality domestic supply chain and global design and channel support for rapid growth. With flexible store layout and high profit margins, there is still ample room for future store expansion both domestically and internationally. The climbing of stores and improving store efficiency still have sufficient momentum.

Huafu Securities' main points are as follows:

Highlighting IP, a global retailer of quality living goods.

Miniso is committed to providing lifestyle household products with IP design features, and has already incubated two major brands, Miniso and TOPTOY. By 2021, Miniso has a market share of 6.7%/11.4% in the global/Chinese own-brand retail market, ranking first in the industry. TOPTOY has a market share of 1.1% in the domestic trendy toy market, ranking seventh. By mid-2024, the company has opened 7,063 offline stores worldwide.

Incubating the two major brands MINISO & TOPTOY under its own retail model:

1) The core brand Miniso: a diversified household lifestyle brand, focusing on the unique retail characteristics of 'cost-effective + IP', providing 11 categories of daily necessities including household products, small electronic products, bags and accessories, beauty tools, toys, personal care, etc. In FY2023, an average of 530 SKUs were launched monthly, with a core SKU product portfolio of approximately 9,700 items. The brand has established brand partnerships with over 80 IP licensors such as Disney and Marvel. 2) TOPTOY, a trendy toy brand: born in 2020 as the second brand, dedicated to creating the world's leading trendy toy brick factory. By developing its own IP and collaborations, it creates its own products, covering 8 major categories including blind boxes, building blocks, action figures, assembly models, etc.

In the trendy toy market, there is one dominant player and many strong competitors, with TOPTOY ranking seventh in market share.

According to Frost & Sullivan data, based on GMV calculation, the CR5 of the trend toy market in 2021 was 26.4%, with relatively low market concentration. Among them, Pop Mart quickly broke through with a mature IP blind box operation model, leading the industry with 4.7 billion yuan of GMV and a 13.6% market share. International trendy toy brands such as LEGO, Hot Toys, and Bandai have market shares of 7.5%, 2.8%, and 1.4% respectively. TOPTOY entered the trendy toy industry in 2020, and within just one year, it has captured a 1.1% market share, ranking seventh in industry market share.

The overseas market adopts a flexible approach, entering local markets through agents.

The company initially entered new markets through an agency model and localized operations to promote rapid adaptation and localization of the brand in local markets, effectively managing regulatory risks and reducing operating costs. As of June 30, 2024, the number of overseas stores has reached 2753, including 343 directly operated, 338 joint venture, and 2072 agency stores, with an average annual net increase of nearly 200 stores over the past four years. With strong overseas store expansion, FY24 overseas revenue reached 5.521 billion yuan, a 44.45% year-on-year increase.