Key points of investment

Event: On October 30, Mingchuang Premium successfully held a press conference on the results of the global brand strategy upgrade in Shanghai. At this press conference, the company clarified the business direction of “roll quality without roll price” and build a “global IP co-branded collection store”; at the same time, it released major IP co-branded products such as Harry Potter.

The company believes that offline consumption is about to usher in a period of change. Experience the rise of consumption. The future of Mingchuang is not about price or quality: Mingchuang's judgment on future consumption: the inherent pattern of global retail will gradually be broken, and retailers with innovative models and special services are popular all over the world, such as Sam, Market Opener, and Fat Donglai. Therefore, in the future, Mingchuang will focus on satisfying consumers' emotional value and increasing their interest in consumption. Positioned as a “Global IP Co-branded Collection Store”, the vision is to become the world's number one IP design retail group.

Major IPs such as Harry Potter have been released, and IP co-branding will continue to be increased in the future: the company has already reached cooperation with 150+ global IPs, with cumulative sales exceeding 0.8 billion units. In the future, 0.01 million+ new IP products will be launched every year, aiming to account for 50% of IP product sales by 2028. The co-branded IP product with Harry Potter is already on sale. It coincides with the Harry Potter re-screening and is expected to bring in good sales. Furthermore, the company is also optimistic about the development prospects of categories such as two-dimensional and pet, and will continue to invest in these fields.

The global flagship store strategy effectively enhances brand awareness. In the future, the global market may have 0.04 million store space: MINISO has already opened flagship stores in core landmarks such as Fragrant Street in France, Jakarta in Indonesia, Sydney, Australia, and Nanjing Road in Shanghai, with impressive turnover. In the future, the company will still have extensive space to open stores around the world. According to the company's estimates, based on 0.1 million people per store in developed regions and 0.2 million people per store in developing regions, there is a total of about 0.04 million stores worldwide (Europe, Asia, North America, Latin America, and Oceania are 0.72/2.4/0.47/ 0.28/ 0.0004 million stores, respectively).

Rationalize the domestic store product line & franchise system to further explore potential store opening space: ① Clarify the classification and definition of MiniLand, Senneng stores, theme stores, flagship stores & sub-main stores, regular stores, MINISO GO (airport & high-speed rail), and MINISO pop-up stores, and rationalize accurate coverage of ideas; ② shift from store licensing to commercial system licensing, and use big business resources to accelerate store opening. The revenue growth of Huarun, Longhu and other systems in 2024 will be faster than the overall domestic brand; ③ Add code to improve brand building, explore non-standard cultural tourism, Ole, and airports High-speed rail and extensive store opening space in the prefecture area.

Profit forecast and investment rating: We are optimistic that the company will achieve high growth in the consumer interest circuit. Q4 With the Harry Potter IP partnership and the peak season for overseas direct stores, the company is expected to achieve impressive results. We maintained the company's adjusted net profit of 28.0/ 33.7/ 3.9 billion yuan from 2024 to 2026, +19%/+20%/+16% year over year, corresponding to the closing price of Hong Kong stocks 16/ 13/ 12 times P/E on October 30. Maintain a “buy” rating.

Risk warning: Store expansion falls short of expectations, fluctuating consumer demand, increased industry competition, risks related to overseas operations, uncertainty about the pace of execution of Yonghui transactions and the effects of integration, etc.