The company's recent situation

We attended the 2024 global brand strategy upgrade results conference hosted by Mingchuang Premium and conducted research on the newly opened Shanghai MINISO LAND store in October. The main points are as follows:

reviews

IP co-branding+brand going overseas are the company's two major strategic development directions in the future. Mingchuang Premium focuses on the offline physical retail industry. Facing complex and changing consumer demand and consumer trends, Mingchuang Premium is gaining market share through high-quality, high-value-added products. Looking forward to the future, we believe that IP co-branding and overseas branding are two key development directions for the company in the future:

On the brand side, Mingchuang Premium is positioned as a global IP co-branded collection store. It has cooperated with more than 150 high-quality IPs around the world, and launched more than 0.01 million new IP products every year, continuously strengthening its first-mover advantage, channel advantage and scale advantage in the field of IP co-branding.

In terms of products, Mingchuang Premium focuses on “good-looking, fun, and easy to use”, focusing on four categories of products: plush, blind boxes, travel, and aromatherapy. In the future, it will continue to innovate in product performance, gameplay, and categories.

In terms of channels, domestic companies will innovate 7 store formats (MINISO LAND, power stores, theme stores, flagship stores, regular stores, MINISO GO, pop-up stores) to target different city levels and shopping centers, and match different store types, areas, and product categories. Overseas, Mingchuang Premium has already entered the branding stage, opening flagship stores in high-quality business districts in the US, Paris, Indonesia and other countries to enhance the brand's popularity overseas.

The Shanghai MINISO LAND store is full of customers, and Harry Potter IP sales are booming. The MINISO LAND store we investigated is located on East Nanjing Road in Shanghai, with an excellent location. The store area is nearly 2,000 square meters and has a total of 3 floors. The store is positioned as an IP collection store, bringing together many popular IPs under Mingchuang Premium, and also has a two-dimensional section and a pet section. On the morning of the weekday we surveyed, the store had a high traffic flow, and many consumers came to buy the Harry Potter IP series products that were newly launched in China recently. We expect the store to sell more than 10 million yuan a month, making it a benchmark store for Mingchuang Premium's big store strategy.

Profit forecasting and valuation

We keep the company's 2024/25 EPS forecast of 2.15/2.59 unchanged. Currently, Hong Kong stocks correspond to 16/13 times 2024/25 non-IFRS P/E, and US stocks correspond to 15/12 times, maintaining Hong Kong stocks and US stocks outperform the industry ratings; considering entering the peak season in the fourth quarter, we raised the target price of Hong Kong/US stocks 9% to 44.60 HKD/23.02 US dollars, corresponding 18/15 times the 2024/25 non-IFRS P/E. Hong Kong/US stocks are 18% /20 compared to the current stock price % of the upstream space.

risks

The retail environment falls short of expectations, channel expansion falls short of expectations, and new business development falls short of expectations.