MINISO Group Holding Limited (NYSE:MNSO) Q4 2023 Results Conference Call August 22, 2023 3:00 AM ET

Company Participants

Guofu Ye - Founder and CEO

Eason Zhang - CFO

Conference Call Participants

Michelle Cheng - Goldman Sachs

Anne Ling - Jefferies

Lucy Yu - Bank of America Merrill Lynch

Samuel Wang - UBS

Jingru Song - Industrial Securities

Operator

[Call Starts Abruptly] In Hong Kong Stock Exchange. In addition, we have prepared a PowerPoint presentation for today's call, which contains financial and operational information for this quarter and fiscal year. If you are using Zoom Meeting, you should be seeing it right now. It can also be visited on our IR website later.

Now I would like to hand the conference over to Mr. Ye and Mr. Wang will translate for Mr. Ye. Please go ahead, sir.

Guofu Ye

Hello, everyone, and welcome to our earnings conference call. Our overall performance once again reached new highs as we achieved breakthroughs in both revenue and profitability. Total revenues exceeded the RMB 3 billion milestone for first time, increasing by 40% year-over-year to RMB 3.5 billion. GP margin reached 39.8%, an increase of 6.5 percentage points year-over-year. Adjusted net profit surpassed RMB 570 million, increasing by 156%. Adjusted net margin also hit a new high, reaching 17.6%, an increase of 8 percentage points year-over-year.

I'll now walk you through business updates for our 3 major segments; MINISO China, MINISO Overseas and MINISO TOP TOY. MINISO China showed resilience despite the challenging consumption environment. Offline sales of MINISO China achieved 40% year-over-year growth in this quarter, as well as according to the National Bureau of Statistics China, domestic retail sales increased by only 10%. Average transaction volumes increased by 18%, while average transaction value increased by more than 5% year-over-year.

Entering July, nearly 1/3 of MINISO stores in China achieved new sales record, marking a strong start to the September quarter. GMV increased by over 25% year-over-year with GMV per store increasing by 14%. Average transaction volume and average transaction value increased by 10% and 3% respectively. For the first 7 months of 2023, GMV per store in China recovered to 2021 level and around 85% of pre-COVID level in the same period of 2019, in line with our expectations at the beginning of the year.

Notably, we opened a total of 221 new stores on a net basis in China during the June quarter, including more than 90 of new stores in Tier 1 and Tier 2 cities. This not only set a quarterly record for store openings for MINISO, but also represents the highest quarterly new store openings in Tier 1 and Tier 2 cities since the pandemic. Meanwhile, store closure rate in this quarter was only 1.0% below historical average.