Guoxin Securities released a research report stating that it maintains the “superior to the market” rating of Mingchuang Premium (09896). Relying on its strong channel capabilities and supply chain advantages, the company continues to deepen its retail interests, continuously optimizes its product structure through popular IP co-brands to drive upward gross margins; at the same time, it accelerates overseas store opening, and continues to expand its global store footprint steadily. At the same time, Mingchuang's acquisition of Yonghui Supermarket is progressing steadily. By creating a cost-effective and quality consumption scenario, it is gradually constructing a unique multi-brand matrix on the retail circuit using its complementarity with the Mingchuang brand's customer base and price band dimensions.

The company achieved revenue of 12.28 billion/yoy +22.8% in the first three quarters, adjusted net profit of 1.93 billion/yoy +13.7%, and an adjusted net profit margin of 15.7%. Excluding the impact of exchange profit and loss, the adjusted net interest rate was 15.9%. Single Q3 achieved revenue of 4.523 billion/yoy +19.3%, adjusted net profit of 0.686 billion/yoy +6.9%, and adjusted net profit margin of 15.2%.

Looking at Mingchuang's business in China, Mingchuang brands achieved 2.439 billion/yoy +5.7% in domestic revenue in 2024Q3, adding 135 stores to 4,240. In the first three quarters, Mingchuang Premium's offline store revenue in mainland China was +11.8%. Among them, store openings increased 14.7% year on year; O2O business increased nearly 80% year on year, and e-commerce business increased 19% year on year.

Looking at overseas business, in 2024Q3, Mingchuang achieved revenue of 1.81 billion/yoy +39.8%. Among them, overseas direct managers/agents achieved revenue growth rates of 55.4%/26.5% respectively. In Q3 alone, Mingchuang's net overseas stores increased by 183 to 2,936; the number of overseas same-store units increased year-on-year in the first three quarters.

Looking at TOPTOY's business, 2024Q3 achieved revenue of 0.272 billion/yoy +50.1%, adding 39 to 234 new stores. Judging from the same store's performance, the same store increased 5% year-on-year in the first three quarters. As TOPTOY's share of self-developed products increased month-on-month, profits continued to improve. At the same time, TOPTOY successfully tested the waters in the MINISOLAND store in Indonesia and opened its first overseas store in Thailand, laying the foundation for global expansion.

The bank said that the increase in the share of Mingchuang IP has led to an increase in gross margin, and overseas store expansion has accelerated sales expenses. A single Q3 company achieved a gross profit margin of 44.9% /yoy+3.1 pct, an increase of 1.5 pct over the previous quarter, and a record high for a single quarter. Mainly due to 1) the increase in the share of high-margin overseas direct sales markets; 2) the increase in the share of IP products; and 3) the continuous improvement of TOPTOY's gross margin. The net sales and distribution/general administrative/financial revenue ratios for single Q3 were +5.1/0.7/3.5pct, respectively, and the rapid expansion of overseas direct stores led to an increase in sales expenses.