Summary of the Conference Call for Miniso Company Overview - The conference call discusses Miniso, a retail company known for its affordable products and strong presence in both domestic and international markets, particularly in the United States and Europe. Key Points and Arguments Response to Tariffs - Miniso has implemented various strategies to mitigate the risks associated with increased tariffs in the U.S. as of early 2024. This includes enhancing its overseas supply chain, particularly increasing local sourcing in the U.S. to reduce reliance on Chinese suppliers. [3][4] - The company has managed to maintain a gross margin of approximately 70% in the U.S. market, even after two rounds of tariff adjustments from 10% to 20%. [3][4] Supply Chain and Procurement - As of early 2025, 30%-40% of Miniso's products are sourced through local supply chains in the U.S., although the company still relies on Chinese and other overseas suppliers to maintain cost advantages. [4][5] - The company plans to focus on 20 states in the U.S. to enhance operational efficiency and optimize resource allocation. [6] Sales Growth and Store Expansion - Miniso anticipates a same-store sales growth rate of 15%-18% in Q1 2025, with domestic growth expected to be in the mid-single digits and overseas growth projected at 20%-25%. The company plans to open 900 new stores globally, including 800 Miniso stores and 100 TT stores. [4][8] - The average payback period for domestic franchisees has extended from 12 months in 2023 to 15 months in 2024, yet over 90% of franchisees remain profitable, indicating a healthy investment return. [4][14] IP Strategy and Product Innovation - Miniso is actively pursuing a refined IP operation strategy, focusing on product design innovation and diversifying IP selection. The company is exploring collaborations with emerging artists and brands to enhance its product offerings. [4][15][16] - The company has extended the lifecycle of its IP products through iterative upgrades, significantly enhancing its product design capabilities. [19] Market Potential and Strategy in the U.S. - The U.S. market is viewed as highly promising, with Miniso's strategy focusing on refined operations and cost control. The company plans to adjust its strategy if tariffs increase significantly, potentially shifting focus to the European market. [7][24] - Miniso has nearly 300 stores in the U.S. and aims to optimize inventory turnover and operational efficiency in 2025. [24] Challenges and Adjustments - The company faces challenges in both domestic and overseas markets, necessitating adjustments in its operational strategies. In the U.S., the focus is on refining store operations and enhancing supply chain efficiency. [23][24] - Miniso's overseas operations are adapting to macroeconomic changes, including tariff impacts, by dynamically adjusting the ratio of franchise to direct stores. [21] Financial Performance and Stock Response - Recent tariff impacts have pressured Miniso's stock price, prompting the company to engage in share buybacks to protect shareholder interests and signal confidence in future growth. [30] Additional Important Insights - Miniso's franchisee profitability remains robust despite extended payback periods, indicating resilience in its business model. [14][28] - The company is committed to expanding its IP offerings internationally, with plans to introduce 100 Chinese IPs to global markets over the next decade. [27] - The overall IP product share in overseas markets exceeds 40%, with the U.S. market showing a higher proportion of around 60%. [29]
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