Reporter | Lu Yibei
Edit | Ya Han Xiang
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On March 3, MINISO Premium announced its unaudited financial results for the fiscal second quarter ended December 31, 2021.
According to the financial report data, the company's total revenue in the fiscal quarter reached 2.77 billion yuan, although it has not fully recovered to the level of 2.804 billion yuan in the first quarter of the epidemic, but it is an increase of 21% over the same period in 2021. Non-IFRS net profit for the quarter was RMB210 million, up 155% year-on-year, and a net profit margin of 7.7%, the highest in nearly seven quarters since the outbreak of the epidemic. As of the close of the US stock market, the stock price of Mingchuang Premium Closed up 13.67%.
According to Mingchuang Premium, the sharp increase in revenue was mainly due to the growth of local business in China and the recovery of international business.
Among them, the business revenue in the Chinese market was 2.05 billion yuan, an increase of 12% year-on-year. For a long time, Miniso Premium has relied on the expansion of its store network to increase revenue. In the case of stores in first- and second-tier cities are almost saturated, Minchuang Premium products have begun to pay special attention to the sinking market.
In terms of stores, as of December 31, 2021, the number of MINISO premium stores worldwide expanded to 5,045. Among them, the number of stores in the Chinese market is 3168, and about 63% of the new stores in China in the quarter came from third-tier cities and below, and the number of stores in third-tier cities and below exceeded 1300.
In 2017, Ye Guofu, CEO of Mingchuang Premium, formulated a strategic plan of "100 billion stores in 100 countries", that is, by 2019, it will enter 100 countries, open 10,000 stores, and have an annual sales revenue of 100 billion, and later extend the timetable to 2022. At present, according to the official website, the goal of Mingchuang excellent products has been achieved, but Wandian seems to have half the way to catch up, and the recurrence of the epidemic has made this plan more difficult to achieve.
In terms of international business, as of December 31, 2021, the revenue of Minchuang Premium International Business was 717 million yuan, an increase of 54.9% year-on-year, and its proportion of total revenue increased from 20.1% in the same period of 2020 to 25.9% in the current quarter.
At present, the impact of the foreign epidemic on Mingchuang premium products is decreasing. On September 30, 2021, 157 stores remained closed in the overseas market of Miniso Premium, and by the second fiscal quarter ending December 31, 2021, the number of stores suspended had decreased to 76. Also because the gross profit margin of the international business is higher than that of the domestic business, the gross profit margin of Minchuang Premium Products also increased from 28% in the same period last year to 31.1%. At present, the number of its overseas stores is 1877.
By brand, the main brand of the same name, Mingchuang Premium, maintained a certain growth, and the total revenue increased by 6.4% year-on-year to 1.877 billion yuan. However, the tide play sub-brand TOP TOY, launched in December 2020, seems to be a long way from the goal of the "second growth curve".
Image source: TOP TOY
At the same time as launching the TOP TOY brand, Ye Guofu, chairman and CEO of Mingchuang Premium, also announced the company's launch of the "X-Strategy", which is intended to achieve diversified operations, transform Mingchuang Premium into a new retail platform, and incubate more sub-brands. As of December 31, 2021, TOP TOY had revenue of RMB131 million, accounting for approximately 4.7% of total revenue, with 89 stores. Previously, in April 2021, TOP TOY had said that it would open 100 stores in 2021.
In order to promote the growth of the TOP TOY brand, from fiscal 2022 onwards, the sales and distribution expenses of Miniso Premium Products (excluding equity incentive expenses) continued to increase: Q1 in fiscal 2022 was 323 million yuan, an increase of 40% year-on-year; Q2 of fiscal 2022 was 371 million yuan, an increase of 21% year-on-year. According to the earnings report, the increase in sales and expenses is due to the company's continued strengthening of TOPTOY brand awareness and the increase in licensing fees related to IP products. It's just that whether burning money marketing can help TOP TOY really grow up is still unknown.
Mingchuang Premium seems to be full of confidence in the future. In the business outlook, the financial report estimates that for the third quarter of fiscal 2022 as of March 31, 2022, the company estimates that its revenue will be between $2.4 billion and $2.7 billion, an increase of 7.7% to 21.1% year-on-year. However, the recurrence of the epidemic may also bring resistance to the realization of this outlook.