Q1 2026 MINISO Group Holding Ltd Earnings Call

Christina Mengyun Zhu: the CEO, and this is Ethan Zhang, our CFO. Right before we begin, please refer to the safe harbor statement in our earnings press release. We also applied for this call as we were making forward-looking statements. Please also note that we're discussing non-IFRS financial measures. Those measures are explained or reconciled to the most comparable measures recorded under IFRS, and also in our filings with SEC and Hong Kong Stock Exchange. Unless otherwise stated, all figures are in RMB. We have already prepared a slide deck for financial operating highlights for today's call. If you are joining through Zoom, you will see the slide now. You can also refer to our IR website after the call. Now, let me just return the call to Mr. Jeff Ye. Hello, everyone. Welcome to MINISO Q1 2026 Earnings Call.

Speaker #1: MINISO Group Hau-Yee Yan is Ethan John, our CFO. Right before we begin, please refer to the seat proper statement in our furnace press release.

Speaker #1: We hope to apply for this school, as we were making forward-looking statements. Please also note that we were discussing non-IFRS financial measures, those measures I explained in the reconciled to the most comparable measures reported under IFRS.

Speaker #1: And also, in our filing with SEC and Hong Kong Stock Exchange, unless otherwise stated, all tickets are in R&D. We have already prepared a slide deck for financial operating highlights for today's school.

Speaker #1: If you're joining through Zoom, you will see the slide now. You can also refer to our IR website. After the call, now let me just attend the call to Mr. Jeff Yates.

Speaker #1: Hello, everyone. Welcome to MINISO March quarter 2026. Earnings call. In March quarter, the revenue ratio rose to 5.7 billion R&D, grow by 28.5%, exceeding the high end of our previous slide deck.

Guofu Ye: In Q1, the revenue reached close to RMB 5.7 billion, grow by 28.5%, exceeding the high end of our private guidance. Adjusted net profit, excluding foreign exchange and losses, comes at RMB 630 million, grow by 8%. Operating cash flow grow by 40%. Free cash flow was up by 36%. I'm not going to read through the financial lines one by one. Eason will take you through the detailed numbers and outlook in CFO remarks. I'd like to focus on three areas. First of all, execution of our strategy. I may spend more time here because the details of execution can really tell you where a company is heading to. Secondly, an update on two overseas markets that are of your most concern, Indonesia and US. Thirdly, my view on H2 this year. Let me just start with strategic execution. Last year, I introduced the store upgrade strategy.

Speaker #1: Adjust to the net profit, excluding forex gain and loss, comes at 630 million, grow by 8%. Operating cash flow grow by 40%, free cash flow was up by 36%.

Speaker #1: I'm not going to read through the financial items. One by one, Ethan will take you through the detailed amount and outlook in CFO remarks.

Speaker #1: I'd like to focus on three areas. First of all, execution of our strategy. I may spend more time here because the details of execution can really tell you where a company is heading to.

Speaker #1: Secondly, an update on two operative markets that are of your most concern, Indonesia and the US, and thirdly, my view on issues of basis.

Speaker #1: Let me just start with strategic execution last year. I introduced the store-operator strategy. We are right on that. MINISO brand store number grow by 280 in China, less than 10% growth, but offline store share we grow by 25%.

Guofu Ye: We are right on that. MINISO Brand store numbers grow by 280 in China, less than 10% growth, but those like SOSHIAT, we grow by 25%. The two data tell the story best. First of all, the share of the profit of franchisees this quarter reached the highest level in recent quarters. Franchisees are putting their own money on the line, so their P&L is most honest signal that you can get. The fact that the profitability hit a new high tells you that large format store is not asking franchisees to take the risk, but helping them to make money. Secondly, we received thousands of the new store applications, half of that requesting for large format or flagship stores. In the past, we have to convince franchisees to open large stores. Today, they are competing for this chance.

Speaker #1: The two data tell the story best. First of all, the share of the profit franchisee-based quarter reached the highest level in recent quarters. Franchisees are putting their own money on the line, so their PNR is most honest signal that it can get.

Speaker #1: The fact that the profitability is a new high tells you that large format store is not asking franchisees to take the risk, but helping them to make money.

Speaker #1: Secondly, we received 1,000 new store applications. Half of that requesting for large format or flagship stores. In the past, we had to constrain franchisees to open large stores, today they're re competing for this chance.

Speaker #1: Such shift is a market's most direct vote for the confidence in our large store format. On April 18th, MINISO State and MINISO Land opened simultaneously at the CDF Mall in Shenyang.

Guofu Ye: Such shift is the market's most direct vote for confidence in our large store format. On 18 April, MINISO Space and MINISO Land opened simultaneously at the CDF Mall in Sanya. Duty-free mall has been traditionally taken for luxury and beauty brands with highest foot traffic density and spending power among the top-tier retail stores. The fact that we can recoup is for the brand equity. Most importantly, we bring something that people won't be able to take, an immersive IP-driven experience, a pop culture to duty-free malls, and translate into incremental foot traffic and time for vending. The real barrier for running large store isn't capital, it is content density. In 1,000 square meter space, can you really make the customer want to stay without leaving? This comes to three things we accumulated for one decade.

Speaker #1: Duty-free mall has been transitionally taken for luxury and beauty brands, with highest food traffic density and spending power among the top-tier retail stores. The fact that we can look in, speak for the brand equity, most importantly, we bring something that people won't be able to take.

Speaker #1: An immersive IT-driven experience, a pop culture to duty-free malls. And translate into incremental food traffic, spend time for venues. The real barrier for running large store isn't capital.

Speaker #1: It is content density. In 1,000 square meter space, can you really make the customer want to stay without leaving? This comes to three things.

Speaker #1: We accumulated for one decade. Latitude right over 150 global IPs. A network of 2,000 local suppliers. And the supply chain that was enough to refresh assortment every week.

Guofu Ye: Largest library of over 150 global IPs, a network of 2,000 global suppliers, and the supply chain that's got enough to refresh assortment every week. These are the three that can really make us stand out. At the same time, we're systematically closing underperforming stores, those open for many years with under 200 square meters. At the same time, we upgrade our franchising space, renewing with a partner to bring new strong ones. This is what our store and the channel operation strategy is really about. Many people want to know how we have our IP strategy done. This is very important. In Q1 of this year, we launched an IP operation training program at our Guangzhou headquarters, bringing together regional managers, store representatives from Sunshine and functional teams. This isn't the classroom-style training.

Speaker #1: These are the three that can really make us stand out. But at the same time, with the semantically closing underperforming stores, those open for many years, with under 200 square meters, but at the same time, we operate our friendships in space, removing weaker partners to bring new strong ones.

Speaker #1: This is what our store and the channel operate strategy is really about. Many people want to know how we have our IT strategy done.

Speaker #1: This is quite important. In Q1 of this year, we launched an IP operation training program on our Guangzhou headquarters. Bringing together regional managers, store representatives from South China and functional team.

Speaker #1: This isn't a platform-style training. We use our MINISO Land store as a live training ground, breaking down operation in real store environment. The program covers our IT understanding, storytelling, operational execution, and data capacity.

Guofu Ye: We use our MINISO Land store as a live training ground, breaking down operations in real store environment. The program covers our IP understanding, storytelling, operational execution, and data capacity, working through everything from underlying logic to hands-on experience. Why it is so important? Because IP operation is an organizational capacity. It is not a set of SOP. No matter how well a manual is written, if franchisees and the staff just follow it mechanically, the result won't be good. Only when people genuinely understand why IP resonates with consumers, that can help our right type of strategy. This can turn IP operation from a headquarter story into a muscle memory across the entire network. On 8 April, we concluded our overseas trip fair. The star of this event was YOYO, a proprietary IP that we built from scratch in-house.

Speaker #1: Working through everything from underlying logic to hands-on experience. Why it is so important? Because IT operation is an organizational capacity. It is not a set of the SOP.

Speaker #1: No matter how well a menu is written, it's not franchisees and the staff just follow it mechanically. The result won't be good. Only when people genuinely understand why IT resonates comes to the most.

Speaker #1: That can help our right-hand strategy. This can send IT operation from a headquarters story into a muscle memory across the entire network. On April 8th, we concluded our overseas trade fair.

Speaker #1: The start of this event was usual. A proprietary IP that we built from scratch in-house. The fact that the proprietary IP took center stage is a signal our own IPs are now capable of sending on their own commercially.

Guofu Ye: The fact that a proprietary IP took center stage is a signal our own IPs are now capable of standing on their own commercially. The strong order volume from the distributor and overseas customers are most honest vote of the confidence to our IP and our products. That's more telling than any market result. YOYO the puppet, RMB 100 million in sales with six months of launch. In April, it appeared on Met Gala, the Super Bowl Oscar of the fashion, a stage that has been traditionally for luxury brands and international celebrities. A Chinese original pop toy IP appeared as an accessory along with international stars and was featured as a gift at events. This is not marketing. YOYO earns its place in the purple section spotlight on its own merit.

Speaker #1: And the strong order volume from the distributor and overseas customers is the most honest vote of the confidence to our IP and our product.

Speaker #1: Let's move telling that any market result. You use the past 100 million RMB in sales with six months of launch. In April, it appeared on Metadata, the Silk Road Oscar of the fashion.

Speaker #1: A stage that has been traditionally for luxury brands and international celebrities. A Chinese original hot toy IP appeared as the accessory along with international stars.

Speaker #1: And was featured as a gift at the event. This is not marketing. You earn its place in the global fashion spotlight on its own merit.

Speaker #1: From CCTV screens, data, to Paris Fashion Week, to Metadata in New York, you covered the brand in six months that many IP won't be able to make in 10 years.

Guofu Ye: From CCTV Spring Festival Gala, to Paris Fashion Week, to Met Gala in New York, YOYO covered the brand in six months that many IP won't be able to make in 10 years. It's a true test of the IP capacity from incubation to design to operation and global rollout. YOYO's success is not a comfortable incident. It's a signal that proprietary IP strategy is going into the harvest stage. In Q1 of this year, total overall revenue of MINISO Group exceeds RMB 2 billion, and we also have a great way to extend our business. The success is whether our organizational capacity can keep the pace. Building organizational capacity is what we made a lot of investment with. It won't immediately show up in financials, but it's by our long-term development. We have advanced a few things. First of all, standardization.

Speaker #1: It's a true stat of the IP capacity from incubation to design to operation and global rollout. You use that stat is not a coincidence.

Speaker #1: It's a signal that proprietary IP strategy is going to get into the hottest stage. In Q1 of this year, total overall revenue of MINISO Group exceeded $2 billion RMB.

Speaker #1: And we also have a great way to extend our business. The success is whether our organizational capacity can keep the pace, building organizational capacity is what we made the last investment with.

Speaker #1: It won't immediately show up in financials, but inspire our long-term development. We have advanced a few things. First of all, centralization. The headquarter has devised the operation and merchandising menus.

Guofu Ye: The headquarters has devised the operation and merchandising manual, delivering video case study, and frontline training to ensure consistent understanding and execution across markets. Each market also set up regional management training with regular sessions for store managers and supervisors. We do benchmark and rapid replication when pilot project is selected. Once they prove success, we roll out quickly to other markets. A membership model. How we experience operators who deliver results with new products and continue to have each generation pass on the information. This system means our overseas capacity no longer depends on a single individual. It becomes something that organization can grow on its own. The more markets and the stores we have, the greater the compounding impact might be. Deep organizational capacity along with IP-driven products. These two things give us strong confidence for our long-term overseas growth.

Speaker #1: Delivering video case study and soundslide training to ensure consistent understanding and execution across markets. Each market also set up regional management training with regular sessions for store managers and supervisors.

Speaker #1: Secondly, we built benchmark and rapid replication. When kids look pilot projects is selected. Once they prove success, we roll out them quickly to other markets.

Speaker #1: Thirdly, a mentorship model. Helping experienced operators who deliver result with new partners. And continue to have the generation pass on the information. This system means our overseas capacity no longer depends on a single individual.

Speaker #1: It becomes something that organizations can grow on its own. The more markets and the store we have, the greater the compounding effect might be.

Speaker #1: If organizational capacity along with IP-driven product, the two things give us strong confidence for our long-term overseas growth. Indonesia and the US are the two markets.

Guofu Ye: Indonesia and US are the two markets many of you are focused on. Let me give you an update on those. Indonesia has been one of the markets we love to prosper in our international journey, and it has truly meant so going forward. When in Indonesia, it is about markets. Its young demographic and vibrant consumer environment in the market, we are going to have a long investment. It also made a value-stretching impact for confidence for our global teams. We must make it right. However, the business which does not sell hitting some bumps is entirely normal. The most difficult time is already gone. We already have a clear path forward. Our channel headquarter has set up dedicated negotiation team to proactively pursue prime locations and select relocated stores. On assortment, we have the one platform approach. Two are segmented.

Speaker #1: Many of you are focused on. Let me give you an update on those. Indonesia has been one of the markets we're most proud of in our international journey.

Speaker #1: It has to remain so going forward. When Indonesia isn't a bad market. It's young demographic and vibrant consumer environment. In the market, we're going to have a long investment.

Speaker #1: It also made a downstream effect for confidence for global team. We must make it right. However, the business reached certain sales hitting some bumps.

Speaker #1: It's entirely normal. The most difficult time is already gone. We have already had a clear path forward. Our channel headquarter has set up dedicated negotiation team to proactively pursue primary location and select real estate stores.

Speaker #1: Our assortment, we have the one-size-fits-all approach. Score on segmented. The product operation headquarter is providing direct support, strengthen local IP execution, and tailor merchandising plans.

Guofu Ye: The product operation headquarters is providing direct support to strengthen local IP execution and tailor merchandising plans. On the organizational side, we clearly define responsibility, who set up product lead strategic development. While local teams focusing on daily operations. In terms of the membership, we noticed that we need to truly make the business from traffic-driven to repeat purchase-driven. I'd like to spend a few words on membership fees. We noticed Indonesian consumers who are paid twice in store visits at end of peak times, which coincides with the local payday cycle. We made a payday wave membership benefits program. The results were clear. Membership participants were 80.5% higher than during the normal member days. The repeat purchase rate and frequency are all improved. During the Ramadan, we saw participation spike in the center, which tells us this has become a real habit for the consumers.

Speaker #1: Only organizational side. We clearly define responsibility, hot product leads strategic development. We're local team focusing on daily operations. And in terms of the membership, we noticed that we need to truly make the business from a traffic-driven to repeat purchase-driven.

Speaker #1: I'd like to spend a few words on membership fees. We noticed Indonesia consumers show a clear spike in store visits at the end of each month, which climbed with the local payday circle.

Speaker #1: We made a payday wave membership benefits program. The result was clear. Membership participants was 80.5% higher than during the normal member days. The repeat purchase rate and frequency are all improved.

Speaker #1: During the Ramadan, we saw participation climb even further, which tell us this has become a real habit for the consumers. Well, for the few years, Indonesia delivered a solid profit contribution.

Guofu Ye: Well, for the full year, Indonesia deliver a solid profit contribution. I believe with our adjustments to events, profitability in this year will be much better than last year. More importantly, the membership and the repeat purchase become the primary engine for growth, and the growth will be even higher. I'm truly confident of Indonesia. Let's also talk about North America, which is another key. I have already walked you through the store model and the strategic updates. For today, I'd like to address two questions, including tariffs and consumer behavior under inflationary pressure. I believe those are opportunities for MINISO. First of all, our price point gives us the structure, the advantages. Our core price range in US was around $5 to 25. In that range, what drives purchase emotional connection with IP and love it to buy again.

Speaker #1: I believe without adjustments to effect, profitability in this year would be much better than last year. More importantly, the membership and repeat purchase become the primary engine for growth.

Speaker #1: And the growth would be even higher on truly confident on Indonesia. Let's also talk about North America, which is another hit. I have already walked you through the store model and the strategic updates.

Speaker #1: But today, I'd like to address two questions, including tariffs and consumer behavior on the inflammatory pressure. I believe those are opportunities for MINISO. First of all, our friends found to give us the structure, the advantages.

Speaker #1: Our core price range in the US was around $5 to $25. In that range, what drives purchase emotional connection with IP? I love this, so I buy it.

Speaker #1: Where at the same time, $5 to $20 is quite alluring. Where at the same time, a consumer looking for merchandise of specific IPs won't work away because of the small price increase.

Guofu Ye: At the same time, $5 to $25 is quite alluring. At the same time, the consumer looking for merchandise of specific IP won't walk away because of the small price increase. The tariffs and inflation translate directly into price elasticity. However, for us, we don't apply that the same way. Secondly, MINISO supply chain capacity is being further upgraded. From building a localized and specialized merchandising team, we're improving the entire supply chain, including product, strategy, and supplier development. With strong cross-functional and supply chain collaboration, we have launched our first stock program, which can help to improve our supply capacity. Thirdly, our pool can readily support the US business development. We operate in 120 countries and regions worldwide. Any successful store model from one market, proven IP playbook could be quickly adopted worldwide.

Speaker #1: And the tariffs and inflation translate directly into price elasticity. However, for us, we don't apply that the same way. Secondly, MINISO supply chain capacity is being further upgraded from building a localized and specialized merchandising team.

Speaker #1: We're improving the entire supply chain, including product, strategy, and the supplier development. With strong cross-functional and supply chain collaboration, we have launched our first sales program, which can help to improve our supply capacity.

Speaker #1: Thirdly, our goal can really support the US business development. We operate in quarter 20 countries and regions worldwide. Any successful store model from one market, proven IP playbook, could be quickly adopted worldwide.

Speaker #1: Where at the same time, the stable cash flow and sales economy can also give us the confidence and resources to invest in the US.

Guofu Ye: At the same time, the stable cash flow and stock economy can also give us the confidence and resources to invest in the US. The global complementary framework is not there for our competitors. Thirdly, tariffs and inflation are pretty simple and short-term variables. They come and they go, while consumer demand over emotional IP experience is structural. It doesn't appear with micro volatility for strong companies. Sitting core pressure is also the growth opportunity. It's going to accelerate industry shakeout and have truly differentiated brands stand out. In US, we are that differentiated brand. Let me just attend to TOP TOY now. In Q1 2026, TOP TOY revenue grow by 51%. Net store grow by 21, reaching 355, 360 in China and 39 overseas. In Q1 of this year, we launched a new proprietary IP along with proprietary IP theme services.

Speaker #1: The global complimentary framework is not there for our competitors. Thirdly, tariffs and inflation are cyclical and short-term variables. They come and they go. Where consumer demand over emotional IP experience is structural.

Speaker #1: It doesn't appear with micro volatility. For strong companies, cyclical pressure is also the growth opportunity. If growth is going to accelerate industrial, shake out, and that's truly differentiated brands stand out in the US, we are that differentiated brand.

Speaker #1: Let me just attempt to talk to you now. In the first quarter of 2026, top 12 revenue growth by 51%. Snap store growth by 21, reaching $355.

Speaker #1: $360 in China and $39 overseas. In Q1 of this year, we launched a new proprietary IP Xiaoyue. They do an all-round look. Along with proprietary IPs in the stores, the gallery with Nomi, top 12 portfolio of proprietary IPs stand out.

Guofu Ye: Together with Nommi, TOP TOY portfolio of proprietary IPs stand out. The portfolio products become more mature. Our proprietary IP is being validated by the market. By the end of this month, we'll announce Zhao Lusi as TOP TOY's global brand ambassador. Her influence and recognition among young consumers will help us to accelerate and reach more young consumers. Coming next, let me just walk you through my H2 outlook. There are four drivers. First of all, membership is the most important lever for our same-store sales growth. The data tells a clear story. For full year 2026, member contributes 60% of the total sales. In Q1 of 2026, this number rose to 73%. In other words, nearly three-quarters of MINISO China business are coming from our members. There are two structural shifts behind that, and I'd say that the consumer accounted for 79% of the total sales for us. Two highlights.

Speaker #1: The portfolio product becomes more mature. Our proprietary IPs invalidated by the market by the end of this month, we announced the Zhao Rusi as top 12 global brand ambassador.

Speaker #1: Her influence and recognition among young consumers were harvested to accelerate and reach more young consumers. Coming next, let me just walk you through my H2 outlook.

Speaker #1: There are four drivers. First of all, membership is the most important level for our things to sell growth. The data tells a clear story.

Speaker #1: For a few years, 2026, member contribute 60% of the total sales. In Q1 of 2026, this number rose to 73%. In other words, nearly three quarters of MINISO China business are coming from our members.

Speaker #1: There are two structural shifts. Behind that, and I say that the consumer counted for 79% of the total sales for us. A two highlight.

Speaker #1: First of all, contribution from repeated purchase continue to grow. In Q1 of this year, repurchase has already counted for 60% of the member sales.

Guofu Ye: First of all, contribution from repeated purchase continued to grow. In Q1 of this year, repurchase has already accounted for 60% of the member sales. New member acquisition is also accelerating in the first purchase contribution from the new members rose from 6% to 11% in Q1, which tell us when we convert new consumers into members, the quality of new members are also improving. When more than 70% of your business revenue are coming from the consumers you can directly reach and engage, the growth shift from being opportunity-driven to system-driven. That's the underlying logic behind our confidence, why we are there for repeat purchase and our expansion in H2. Secondly, benefit of our channel operates only starting to come through. For the full year, we plan to open close to 500 large format stores with MINISO brand and flagship store making up increasing share.

Speaker #1: New member acquisition is also accelerating in the first purchase contribution from the new members rose from 6% to 11% in Q1, which tell us when we convert new consumers into members, the quality of those new members are also improving.

Speaker #1: For more than 70% of your business revenue are coming from the consumers you can directly reach and engage. The growth shift from being opportunity-driven to system-driven that's the underlying logic behind our confidence why we are there for repeat purchase and our extension in H2.

Speaker #1: Secondly, benefit our channel operates only starting to come through. For the few years, we plan to open a close $500 store open close to $500 large format stores with MINISO land and flagship store, making us increasing share.

Speaker #1: Thirdly, North American Europe set to enter into harvest phase in H2. The new store will open in the US and Canada was a high quality.

Guofu Ye: Thirdly, North American duo start to enter into harvest phase in H2. The new store we open in US and Canada was of high quality. They're stable, will reach maturity, and deliver high quality same-store sales growth and margin improvements. Fourthly, 2026 is a year with the highest density of IP. As we move into summery season, we have a very strong pipeline of major IP launches lined up. Finally, well, we did see some return this quarter from our earlier investments in the AI space. I firmly believe that this applies like in the efficiency gain AI can bring to our core business. Strong management capacity gets amplified by AI, and the technology dividends from AI will flow first to organizations that already have high execution efficiency and a very strong learning capacity.

Speaker #1: The cohort will reach maturity and deliver high quality things to sales growth and margin improvement. Fourthly, 2026 is a year with highest density of IPs as we move into summer peak season.

Speaker #1: We have a very strong headline of major IP collection launched line up. Finally, well, we did see some return this quarter from our earlier investment in the AI space.

Speaker #1: I firmly believe that bigger price slice in the efficiency gain AI can bring to our core business. Strong management capacity gets amplified by AI.

Speaker #1: And the technology dividend from AI will flow first to organizations that already have high execution assistance and a very strong lending capacity. And I surely believe we're going to continue to leverage AI to really support organizations who already have a very strong lending capacity.

Guofu Ye: I truly believe we're going to continue to leverage AI to really support organizations who already have a very strong learning capacity. For me and for my team, we are improving our understanding over AI and also continue to develop AI. What is MINISO? MINISO is a high-density operating organization, launch thousands of new SKUs every year, manage over 8,000 stores, and expand more than 100 markets and regions. For an organization like ours, the drive for efficiency is our DNA. On the product development side, AI is supporting the trend forecasting and the sourcing decision. On marketing, AI can improve our efficiency in content production and customer segmentation. On operation side, our smart store system are helping us managing foot traffic by time and day. We approach change with a sense of humility.

Speaker #1: So for me and for my team, we are improving our understanding over AI and also continue to develop AI. What is MINISO? MINISO is a high-density operating organization launched thousands of new SDUs every year, managed over 8,000 stores and dispensed more than 100 markets and regions.

Speaker #1: For an organization like us, the drive for efficiency is our DNA. On the product right on the side, AI supporting the trend of forecasting and assortment decisions on marketing AI can improve our efficiency in content production and the customer stratification.

Speaker #1: On operation side, our smart flow systems are helping us manage food traffic by time and day. We approach change with a sense of humility.

Speaker #1: We see AI as an amplifier. Amplifying the supply chain advantage, product development speed, and operational procession that MINISO already has. Recently, we also would like to leverage AI to forecast the product needs.

Guofu Ye: We see AI as an amplifier, amplifying the supply chain advantage, product development speed, and operational proficiency that MINISO already has. Recently, we also learn to leverage AI to forecast the product needs. In that way, we will be able to increase the customer loyalty. Those are the two quick opening remarks I have for you. I'm going to welcome Eason to walk you through the financials. Thank you. Thanks, Guofu. Welcome, everyone, to today's call. Please allow me to walk you through our financial results of this quarter. Unless otherwise noted, all figures are in RMB. Let's take a look at the completions of guidance. Let me just start by reviewing how we perform against the guidance we provided on the March earnings call. We deliver on every metric we guided for this quarter. Revenue.

Speaker #1: In that way, we will be able to improve the customer loyalty. Those are the two precursor remarks I have for you. Now I'm going to work on Ethan to walk you through the financials.

Speaker #1: Thank you. Thanks for Jeff. Welcome, everyone, to today's call. Please allow me to walk you through our financial results of this process. Unless otherwise noted, all figures are in R&D.

Speaker #1: First of all, let's take a look at the completion of guidance. Let me just start by reviewing how we perform against the guidance we provided on March 22.

Speaker #1: We deliver on every metrics regarded for this quarter. First of all, revenue. Group revenue was grown by 28.5%, which is higher than 25% we made for the previous call.

Eason Zhang: Group revenue was grown by 28.5%, which is higher than 25% we made for the previous quarter. I will break down the growth drivers by business unit later in my remarks. Next on same-store sales. In Q1, MINISO China mainland delivered high single-digit same-store sales growth, where North America delivered a mid-double digit same-store growth. The two strategic priority markets maintained a very strong momentum, which grew in Q4 of 2025, driving group same-store growth to a mid-single digit number. It is worth mentioning, Europe and Latin America also delivered a positive same-store sales growth in Q1. The trend will be continued in Q2. Let's also take a look at the top line. In Q1 2025, group GMV reached RMB 10.1 billion, grew by 26%. Total revenue grew by 28.5%, reaching RMB 5.7 billion. Let's break down by brand. MINISO Brand revenue was RMB 5.17 billion in Q1, up by 26.6%.

Speaker #1: Our breakdown of gross drivers by business unit later in my remarks. Next, on things to sell. In Q1, MINISO China mainland delivered high single-digit things to sell growth.

Speaker #1: Where North America delivered mid-double-digit things to growth. The two strategic priority markets maintained a very strong momentum. We saw in Q4 of 2025 driving group things to growth to a mid single-digit number.

Speaker #1: It is worth mentioning Europe and Latin America also delivered positive things to sell growth in Q1. The trend will continue in Q2. Let's also take a look at the top line.

Speaker #1: In Q1 of 2026, group BNB reached 10.1 billion, grow by 26%. Total revenue grow by 28.5%, reaching 5.7 billion RMB. Let's break down by brand.

Speaker #1: MINISO brand revenue was 5.17 billion in Q1. Up by 26.6. MINISO China mainland was 3.23 billion, up by 29.6%. MINISO China mainland continued to perform exceptionally well.

Eason Zhang: MINISO China mainland was RMB 3.23 billion, up by 29.6%. MINISO China mainland continued to perform exceptionally well. This was the fastest year-over-year growth rate in the past nine quarters, and the fifth consecutive quarter of accelerated growth following Q4 of 2025. The success of our China business validates our strategic direction is right, our operating playbook is solid. We will use China experience as our benchmark, use those proven operating experience to drive breakthroughs in international business, turning China success into a powerful engine for overseas growth. MINISO overseas revenue was RMB 1.94 billion, grew by 22%. TOP TOY revenue was RMB 510 million, grew by 51.4%, continued very strong growth trajectory. Let's take a look at the same-store sales. In 2015, mainland China delivered strong same-store sales growth with high single-digit growth numbers. MINISO overseas, including the third-party distributors, also delivered solid low single-digit growth.

Speaker #1: This was the fastest year-over-year growth rate in the past nine quarters. And the fifth and level quarter of accelerated growth, following Q4 of 2025.

Speaker #1: The success of our China business validates our strategic direction to the right, our operating playbook is solid. We will use China experience as our benchmark, use those proven operating experience to drive breakthroughs in international business and in China success into a powerful engine for growth overseas growth.

Speaker #1: MINISO overseas revenue was 1.94 billion, grow by 22%. Top toy revenue was 510 million, grow by 51.4%, continues very strong growth trajectory. Let's take a look at things to sell.

Speaker #1: In Q1 of this year, mainland China delivered strong things to sell growth. With high single-digit growth number, MINISO overseas, including the third-party distributor, also delivered solid low single-digit growth.

Speaker #1: Looking ahead, we will continue to strengthen our things to across three dimensions: people, product, and stores. First of all, people. We leverage install traffic data to capture peak hours.

Eason Zhang: Looking ahead, we will continue to strengthen our same-store across three dimensions, people, product, and stores. First of all, people. We leverage in-store traffic data to capture key covers, regularly run in-store engagement activities, capitalizing on gift occasions like Mother's Day, 520, Children's Day, and the Dragon Boat Festival to drive traffic through online to offline acquisition. On the other side, we use internal mechanisms such as in-store competitions for the best-in-class mentoring to continue to improve our operation capacity. At the same time, as Jeff Ye has already mentioned, the value of our domestic membership system continued to be unlocked. In Q1 of 2026, members' contribution to the sales rose from 60% to 73% this quarter. Empowered by our large store and IP strategy, we continue to acquire new customers and use refined operations to close the loop from acquisition to retention and repeat purchase.

Speaker #1: Regularly run install engagement activities. Capitalizing on these occasions like Mother's Day, 5/20, and Children's Day, and the Dragonfest Festival, to drive traffic through online to offline activation.

Speaker #1: On the other side, we use internal mechanisms such as inter-store competitions for the best in class mentoring to continue to improve our operation capacity.

Speaker #1: But at the same time, as Jeff here has already mentioned, the value of our domestic membership system continues to be unlocked. In Q1 of 2026, members' contribution to the sales rose from 60% to 3% this quarter.

Speaker #1: In part by our large store and IB strategy, we continue to acquire new customers and use required operations to close the loop from acquisition to retention and repeat purchasement.

Speaker #1: In the near future, we will leverage AI capacity plus membership data to make sure we continue to have the demand forecast recession targeting and the China resolution continue to rise the same store growth number.

Eason Zhang: In the near future, we will leverage AI capacity plus membership data to make sure we continue to have the demand forecast with session targeting and the channel reservation, continue to drive the same-store growth numbers. Second, let me talk about products. We continued to align tightly with seasonal and holiday consumption trends, use hero IP to drive attraction upgrade in the personal sales mix. In H1 of this year, our IP preparation has broke through across diversified categories, covering high-value IP for K-pop superstar, Jennie, the streetwear brand, GOLF, and classic lifestyle, aesthetic, and tech season. This fully validates the connectivity of our global IP platform. In H2 of this year, we're going to heavily launch the World Cup collection, Chiikawa plus Sanrio collaborations, and the "Toy Story" movies. The hero IP will help to drive the high attachment rate. Thirdly, our stores.

Speaker #1: Second, let me talk about product. We continue to align tightly with seasonal and holiday consumption trend. Use hero attributes to drive a structured upgrade in the personal sales mix.

Speaker #1: In H1 of this year, our IP collaboration has brought across diversified categories. Covering high-value IP for key pop superstar Jamie, the sweet well brand Gloss, and classic lifestyle aesthetic cast system needs to be validated the connectivities of our global IP platform.

Speaker #1: In H2 of this year, we're going to carry launch the World Cup collections Chihuahua plus Sunvil collaborations and the Toy Story movie. The hero IP will help to drive the high attachment rate.

Speaker #1: Thirdly, on school. We continue to upgrade the store discipline and virtual identity. In Q1 of this year, we completed renovation to around 80 stores.

Eason Zhang: We continue to upgrade the store display and visual identity. In Q1 of this year, we completed renovation to around 80 stores. The average daily sales improved by more than 50% post renovation. The result validates the effectiveness of the model strategy. We will continue to make it right. Let me also talk about our store network. At the end of this quarter, we have already more than 8,500 stores. MINISO, we have 1,210 stores worldwide, a net increase of 722 stores. MINISO China store number grew by 380. While overseas, we net added 404 stores, reaching 3,670 stores by the quarter end. TOP TOY has added 75 stores, with 365 stores by the quarter end, 39 are located outside China. In 2015, we opened high-quality theme parks.

Speaker #1: The average daily sales improved by more than 50% post-renovation. The results validate the effectiveness of the model strategy. We will continue to make it right.

Speaker #1: Let me also talk about our store network. At the end of this quarter, we have already more than 8,500 stores. MINISO, we have 8,210 stores worldwide.

Speaker #1: And that's in place of 722 stores. MINISO China store number grow by 380, where overseas we net a 404 stores, reaching 3,670 stores. By the quarter end.

Speaker #1: Top toy have 875 stores. With 355 stores by the quarter end, 39 are located outside China. In Q1 of this year, we opened a high-quality theme park for example, MINISO land, MINISO space in Sanya City, Akmu.

Eason Zhang: For example, MINISO Land and MINISO Space in CDF Mall, MINISO Land in Grandview Mall in Guangzhou, MINISO Land in both Xiamen and Shenzhen, as well as MINISO Brand in IAPM in Shanghai. By the end of this quarter, the Space Land brand stores reached 44 in total. In this quarter, we're going to have the Super MINISO, a new theme park lineup, bringing the total to 61 by the quarter end, covering 32 cities across China. Together, theme park stores, flagship stores, and large store ones accounted for 12% of the total store count, contributed 30% of the sales. We expect to roll out more than the theme park stores by the end of this year. To deliver a joyful and unique shopping experience to our users. Let's talk about the GP margin.

Speaker #1: MINISO land in Grandview Mall in Guangzhou. MINISO land in Dongquan. And Shenzhen. As well as MINISO brand in IAPM in Shanghai. By the end of this quarter, the space land friends store reached 44 in total.

Speaker #1: In this quarter, we're going to have the super MINISO, the new theme park lineup. Branding, the total to 61. By the quarter end, helping 32 cities across China.

Speaker #1: Together, theme park store flagship ones and the large store ones accounting for 12% of the total store count. Contribute 30% of the sales. We accept the rollout of more better theme park stores by the end of this year.

Speaker #1: And the delivery of joyful and unique shopping experience to our users. Let's talk about the QP margin. QP margin was 43.3% for Q1. Compared with 44.2% in the same year last year, we have the 0.9 percentage point decline.

Eason Zhang: GP margin was 43.3% for Q1, compared with 44.2% in the same year last year. We have a 0.9 percentage point decline due to three reasons. First of all, high margin overseas business represents a small share of the total group revenue. Secondly, the return of the value for money assortment in China. Deep discount pricing has translated into higher volumes, and thirdly, an increase in mix from our new domestic products like the quick commerce stores, which are still in a margin ramp-up stage. Let's also take a look at expenses. The total operating expense, excluding SBC, grew by 34% in Q1. The total expense ratio was 29.2%, compared with 28% in Q1 last year. Within that, selling expense grew by 37.7%. The selling expense ratio was 24.5%, up by 1.6 percentage points.

Speaker #1: Due to three reasons. First of all, high margins overseas business represent a small share of the total group revenue. Secondly, the returns of the valuable money associates in China.

Speaker #1: This is land pricing has translated into higher volume and thirdly, an increase in mix from our new domestic products like the sweet colors stores.

Speaker #1: Which are still in a margin ramp-up stage. Let's also take a look at expenses. The total operating expense excluding FCC grow by 34% in Q1.

Speaker #1: The total expense ratio was 29.2%. Compared with 28% in Q1 last year. Within that, selling expense grow by 37.7%. The selling expense ratio was 24.5%.

Speaker #1: Halved by 1.6 percentage points. GNI expenses grow by 17.4%. The lower than the revenue growth. Representing a 4.7% of the revenue, a decline of 0.4 percentage points.

Eason Zhang: G&A expenses grew by 17.4%, slower than the revenue growth, representing 4.7% of the revenue, a decline of 0.4 percentage points. The growth of the selling expense was primarily driven by investments in operating stores, licensing fees, and advertising and promotion activities. First of all, in Q1, the revenue from direct operating stores grew by 50% year-over-year, while related expense grew by 35%, demonstrating an ongoing optimization in our DTC store level economics. Direct store related investments include staffing, rent-related expenses, depreciation, and amortization. Secondly, advertising and promotional expenses grew by 74%, accounting for 3% of the revenue. That was mainly because of the brand upgrade initiatives and proprietary IP marketing. We invest in brand awareness to reach a broader consumer base, reflecting our strategic investment in building brand equity. Thirdly, logistics expense grew by 43.5%, stably representing between 1.5% to 2% of the revenue.

Speaker #1: The growth of the selling expense was primarily driven by investment in operating store licensing fees and advertising and promotion activities. First of all, in Q1, the revenue from direct operated stores grow by 50% worldwide, while related expense grow by 35%.

Speaker #1: Demonstrating an ongoing optimization in our DTC store level economics. Direct stock related investment include sourcing, rent related expenses, depreciation, and amortization. Secondly, advertising and promotional expenses grow by 74%.

Speaker #1: Accounted for 3% of the revenue, that was mainly because of the rent upgrade initiatives and proprietary IP marketing. We invest in brand awareness to reach a broader consumer base.

Speaker #1: Reflecting our strategic investment in building brand equity. Thirdly, logistics expense. Grow by 43.5%. Stably representing between 1.5 to 2% of the revenue and 43 licensing fees grow by 42% in this quarter.

Eason Zhang: Fourthly, licensing fees grew by 42% in this quarter, in line with our strategic investment in IP development, stably representing 2.4% to 3.6% of the revenue. The growth of the G&A expense was primarily due to higher staffing costs. In line with our business expansion, G&A grew slower than revenue. Let's also take a look at other net income. As being talked with the management team for the previous quarter call, in Q1, we recorded a large investment gain in the other net income related to our direct investment in our AI company. Following that, companies with an ideal and meaningful share price appreciation, we recorded $870 million in fair value gains. I'd like to remind all of you, the management doesn't view this type of gain as reflective of our profits and the core operating business, it's been excluded for adjusted operating profits and adjusted net profits.

Speaker #1: In my ways, our strategic investment in IP development. Stably representing 2.4 to 2.6% of the revenue. The growth of the GND expense was primarily due to higher sourcing cost.

Speaker #1: Aligned with our business expansion. GNA grow slower than revenue. Let's also take a look at other net income. As been talked with many of you for the previous quarter call, in Q1, we reported a large investment gain with other net income related to our direct investment in our AI company.

Speaker #1: Following that company's recent IPO and the MINISO share price appreciation, we reported an 870 million in sale value gains. I'd like to remind all of you, the management doesn't view this type of gain as reflective of our profit and the core operating business.

Speaker #1: So it's been excluded from our adjusted operating profits. And adjusted net profits. In addition, the live item also includes net foreign exchange gains and losses.

Eason Zhang: In addition, the line item also includes net foreign exchange gains and losses. With forex volatility in Q1, we record a net forex loss more than RMB 80 million in this quarter, which going to impact our margins by 1.5%. Generally speaking, our forex exposure may coming from the holding foreign currency dominated assets. For example, cash equivalents, or receivables, or covering foreign currency dominated liabilities such as our USD dominated convertible bonds. In Q1, the forex losses mainly come from the intercompany receivables from our subsidiaries in the US, Canada, Europe, and Indonesia. The forex gains and losses don't reflect the true operational performance of our core business. As the share of our DTC business continue to grow, impact of the forex will also increase. The guidance we're going to provide you will exclude the forex impact.

Speaker #1: With forex volatilities in Q1, we report a net forex loss of more than 8 million in this quarter. 80 million in this quarter. And which is going to impact our margins by 1.5%.

Speaker #1: Generally speaking, our forex exposure may come from the holding foreign currency dominated assets. For example, cash, cash equivalents, or receivables. For covering foreign currency dominated liabilities such as our USD dominated available bonds.

Speaker #1: In Q1, the forex losses mainly come from the intercompany receivables from our subsidiaries in the US, Canada, Europe, and Indonesia. The forex gains and losses don't reflect the true operation performance of our core business.

Speaker #1: As a share of our DTC business continue to grow, the impact of the forex will also increase. So the guidance we're going to provide you will exclude forex impact.

Eason Zhang: Well, for non-IFRS, there will be some items need to be adjusted. I listed here for you, including six. The first one is equity settled share-based compensation, SBC. SBC expense in Q1 was $110 million, an increase of $34 million because of the total. The second one is gains from the indirect investment in our AI company. This is actually a non-IFRS with an investment of $870 million, represent unrealized and the mark-to-market gains arising from the change in the fair value. The third one is losses from the fair value change in derivatives and instruments accounts related to convertible bonds. By the beginning of last year, there will be a one-time issuance fee. It won't occur this quarter. In Q1, the interest expense on convertible notes was $60.4 million, of which $45.7 million are non-cash.

Speaker #1: Well, for non-IFRS, there will be some items need to be adjusted. I listed here for you. Including six. The first one is equity settled share-based composition SEC.

Speaker #1: SEC extends in Q1 was 110 million and increased of 84 million. Because of the top two and the second one is gained from the indirect investment in our AI company.

Speaker #1: This is actually a non-IFRS. With an investment of 870 million, represents unrealized and the mark-to-market gains arising from the change in the fair value.

Speaker #1: And the third one is losses from the fair value change in derivatives and the issuance of the cost related to convertible bonds. By the beginning of last year, there will be a one-time issuance fee.

Speaker #1: It won't occur this quarter. And in Q1, the interest extends on convertible notes was 50.4 million of which 45.7 million are non-cash. The actual cash interest paid by the company for this convertible note was only 4.7 million.

Eason Zhang: The actual cash interest paid by the company for this convertible note was only $4.7 million. Interest expense on the loan used to acquire our stake in YH was $23 million. In Q1 for YH, the performance was pretty good. The net profit was $290 million as we hold a 29.4% of the equity stake in YH. We recognized approximately $77 million in income from YH in Q1, and we also have a change in carrying value of the redemption liabilities arising from the preferred shares. All those items will be excluded from adjusted net profit. Effective tax rate was 24.9%, which was 20% last year. Let's take a look at the profitability. I was talking about adjusted operating profit. Adjusted operating profit, excluding the net for restaurants, grew 40.3%, reaching $840 million in this quarter.

Speaker #1: Interest extends on the loan used to acquire our stake in YH was 23 million. In Q1 for YH, the performance was truly good. The net profit was 290 million as we hold a 29.4% of the equity stake in YH.

Speaker #1: Then we recognize approximately 77 million in income from YH in Q1. And we also have a change in carrying value of the redemption liabilities arising from the preferred shares.

Speaker #1: All those items will be excluded from adjusted net profits. Effective tax rate was 24.9% which was 20% last year. Let's take a look at profitability.

Speaker #1: I was talking about adjusted operating profits. Adjusted operating profits excluding the net forex loss. Growth 40.3% reaching 840 million in this quarter. The adjusted operating margin excluding the net forex loss was 70.40.7 compared with 60.6 in the same period of last year.

Eason Zhang: The adjusted operating margin, excluding the net for restructuring, was 40.7%, compared with 60.6% in the same period of last year. Let me just walk you through the gaps. First of all, gross margin declined by 0.9% YOY. The total operating expense, excluding SBC, grew by 1.2% YOY. The above partially offsetting by other items, resulting in a total impact of 1.8 percentage points on the adjusted operating margin. It declined from 15.6% to 40.7%. As you can see that for this quarter, the increase in our overall expense ratio was decreased significantly compared with the previous quarter, where for the full year, we aim to well control the expense ratio and continue to stabilize the GP margin. In other words, we are going to stabilize the operating profit margin of the company as a whole.

Speaker #1: Let me just walk you through the gaps. First of all, gross margin declined by 0.9% YY. The total operating expense excluding SEC grow by 1.2% YY.

Speaker #1: The above partially offsetted by other items resulting in a total impact of 1.8% points on the adjusted operating margin. It's been declined from 16.6% to 40.7%.

Speaker #1: As you can see, that for this quarter, the increase in our overall expense ratio was decreased significantly compared with the previous quarters where for the full year, we aimed to well control the expense ratio.

Speaker #1: And continue to stabilize the GP margin in other words, we're going to stabilize the operating profit margin of the company as a whole. So in H2 of this year, as a tick sale season has overseas markets continued to approach, we're going to honor our commitment for this goal.

Eason Zhang: In H2 of this year, as the peak sales season and overseas market continues to approach, we are going to honor our commitment for this quarter. Regarding working capital, by the end of Q1 of 2026, the inventory turnover was 101, compared with 102 days in the same period of last year. MINISO China managed inventory turnover was at 67, compared with 83 last year. MINISO overseas inventory was 254. That was 208 last year. The increase of overseas inventory was primarily driven to the inventory built up ahead of the store opening. The second one is due to the logistics instabilities. In some strategic markets, we have a more flexible supply chain management strategy to increase the safety stock in overseas markets. Over the time, there will be significant room to optimize overseas inventory turnovers. Let's quickly take a look at the cash flow, liquidity, and capital allocation.

Speaker #1: Regarding working capital, by the end of 20 Q1 of 2026, the inventory turnover was 101 compared with 102 days in the same period of last year.

Speaker #1: MINISO China managed inventory turnover was 67 compared with 83 last year. MINISO overseas inventory was 254. That was 208 last year. The increase of overseas inventory was primarily driven to the inventory build-up ahead of the store opening.

Speaker #1: The second one is due to the logistics unstabilities. Income strategic market, we have a more flexible supply chain management strategies. Increased the safety assault in overseas markets.

Speaker #1: Over the time, there will be significant room to optimize overseas inventory turnover. Let's also take a look at the cash flow liquidity and capital allocation.

Speaker #1: By the end of this quarter, our cash position stood at 7.05 billion reminding healthy in separate many of this year. We distribute the dividends over USD 160 million bringing our accumulated shareholder return to 6.23 billion RMB.

Eason Zhang: By the end of this quarter, our cash position stood at RMB 7.45 billion, remaining healthy. In April of this year, we distributed dividends over $160 million, bringing our cumulative shareholder return to RMB 6.23 billion. We believe our share price is currently significantly below its intrinsic value. Jack has already announced that by the end of April, he intends to increase his shareholding. The company also plans to conduct a share buyback based on the market condition. Going forward, we will continue to maintain disciplined cost control and prudent budget management, while financing the growth we see with a delivery of stable and predictable returns to the shareholders. Last one is, let me just give you the outlook. Standing here by the end of May, we are highly confident in achieving the full year target.

Speaker #1: We believe our share price is currently significantly below its intrinsic value. Jack has already announced by the end of April he intends to increase his shareholders.

Speaker #1: The company also plans to conduct share buybacks based on the market will continue to maintain discipline cost control and prove them budget management. We'll financing the growth within with a delivery stable and predictable returns to the shareholders.

Speaker #1: Last but not least, let me just give you the outlook. Standing here by the end of May, we are highly confident in achieving the full year target.

Eason Zhang: We expect for the full year 2026, the revenues are going to have a high double-digit growth. Three-year compound growth rate will be no less than 22%. Full year net store addition will be 450 to 500. Jack has already mentioned, we are going to pay more attention to the quality of the development. 450 to 500 net store increase would be adjusted as we continue to widen the quality of the stores. However, overall speaking, and we are very confident in hitting our target. Regarding the same-store performance, MINISO China and North America, we hope we can continue a positive same-store sales growth. Excluding foreign exchange and losses, we expect adjusted net profit growth accelerate compared with 2025 on a full year basis.

Speaker #1: We expect for the full year 2026, the revenue is going to have a high double-digit growth. Three-year compound growth rate will be no less than 22%.

Speaker #1: Full year net store addition will be 450 to 500. Jack has already mentioned we're going to pay more attention to the quality of the development.

Speaker #1: 450 to 500 net store increase would be adjusted as we continue to finance the quality of the store. However, overall speaking, and we're very confident in keeping our target, regarding the same store, performance.

Speaker #1: MINISO China and North America we hope we can continue a positive same store sales growth. Excluding forex plans and losses, we expect adjusting the net profit growth accelerate compared with 2025 on full year basis.

Speaker #1: While the overseas micro environment presents significant challenges, our expectation for the first half operating result remains unchanged. And we believe the revenue will grow by 20 to 22%.

Eason Zhang: While the overseas macro environment presents significant challenges, our expectation for the H1 operating results remain unchanged. We believe the revenue will grow by 20% to 22%. Net store addition will be 210 to 230. The MINISO China same-store sales maintains a mid-single digit positive growth. North America same-store sales maintains a high single digit to low double-digit growth. That concludes my prepared remarks. I'm happy to take your questions. Thank you. Thanks for listening. Thanks to Jack. All the investors and panelists, please change your name to have your name and institution you are representing. Please make sure you only ask one question each time. Let's first of all welcome Michelle from Goldman Sachs to raise the first question. Hello, Jack and Eason. Thanks for giving me the chance to raise the question. Congratulations for the company for having a good performance despite the challenges.

Speaker #1: Net store addition will be 210 to 230. The MINISO China same store sales maintain a mid-single-digit positive growth. North America same store sales maintain a high single-digit to low double-digit growth.

Speaker #1: That concludes my prepared remarks. I'm happy to take your questions. Thank you. Thanks for listening and thanks for Jack. All the investors and the analysts, please change your name to have your name and institutional represent.

Speaker #1: Please make sure you're only with one question each time. Let's first of all welcome Michelle from Goldman Sachs to raise the first question. Hello, Jack and Ethan.

Speaker #1: Thanks for giving me the chance to raise the question. Congratulations for the company of having a good performance despite the challenges. So my question was regarding overseas market.

Michelle Cheng: My question was regarding overseas markets. They're being touched upon by Jeff Yan. You see the crude oil price has risen and stayed elevated. Could the management team share with us what is the demand from the key overseas markets? What would be the distributor order, pricing, cost of goods sold, and the transportation and the logistics? What are the impacts on your business, and what would be your response strategies? If in the next few quarters there are some key upside and downside risks, which are the markets and factors that you are most associated with? Are there any markets we're going to have a huge fluctuation, and what are the markets you are confident on? Thank you. Thanks so much. A very good question. Let me help to address this question. First of all, on product mix.

Speaker #1: There have been touch upon by Jack Yen. However, you see the good oil price has risen and stayed elevated. Could the management team share with us what is the demand from the key overseas market?

Speaker #1: What would be the distributor order pricing, cost of food, and transportation and logistics? What are the impacts on your business and what would be your response strategies?

Speaker #1: If in the next few quarters, there are some key upside and downside risks, which are the market and factors that you are most associated with?

Speaker #1: Are there any market who's going to have a huge fluctuation and what are the market you are confident on? Thank you. Thanks very much.

Speaker #1: A very good question. Let me help to address this question. First of all, product needs. What's the semantically defined out the share of the high margin categories?

Guofu Ye: While the semantically this denotes a share of the high-margin categories. Proprietary IP products and IP collaboration limited edition are key successes. We also started the first year narrowing by the deeper strategies, concentrating on the true hero products and proactively on the cater and active views. A greater operating depth and efficiency in each. This is in itself the most direct way to hedge against cost pressures. On the supply chain, we have extended the raw material stocking circle from the KFAU from 2 months to 3 to 4 months, moving the cost ahead of the time. End-to-end stocking price is still stable, keep us efficient process. For US market, over the course of 2 waves, we started differentiating the price tag, taking price cut on high frequency, high velocity items. For example, like a bottled water and a t-shirt.

Speaker #1: Proprietary IP product and IP collaboration limited addition are key factors. We also started to pursue networking but a deeper strategy, concentrating on the two hero products and proactively on the tailor and SKUs.

Speaker #1: Fewer categories but a greater operating depth and efficiency in each. This is in itself the most direct way to hedge against cost pressures. On the supply chain, we have extended the raw material stocking circle from the key SKU to from two months to three to four months, noting the cost ahead of the time, end-to-end stocking price is still stable.

Speaker #1: Give us sufficient buffer. For US market over the past two weeks, we started the differentiated price test. Taking price first on high-frequency, high-velocity items, for example, like bottom-to-water and t-shirts.

Speaker #1: On the data now, we're seeing May gross margin already improved compared with April. The price increase through our first and we believe the US GP margin would continue to stay stable or even go up.

Guofu Ye: On the bottom now, we see May gross margin already improved compared with April. The price increase roll out there, and we believe that US GP margin would continue to stay stable or even go up. Looking ahead into the next few quarters, the upside risks include successful execution of the pricing adjustment, structural margin improvements, the rising mix of proprietary IP, as well as the logistics cost pressure from the sustained high crude oil and potential pressure on the ticket size if the consumer sentiment itself continues to weaken. Overall speaking, we're still very proactive for cost management. Thank you very much. Thanks for Jack. Coming next, let me just welcome Samuel from UBS. The line is open for you, please. Thank you. Thanks for Jeff Yan, and thanks for Ethan, and thanks for Christina. I have a question regarding your Indonesia and Mexico markets.

Speaker #1: Looking ahead into the next few quarters, the upside risks include successful execution of the pricing adjustment, structural margin improvement, the rising mix of proprietary IP as well as the logistics cost pressure from the sustained high crude oil and potential pressure on the ticket side if a consumer sentiment is certain, continue to go weaken.

Speaker #1: Overall speaking, we're still very proactive for cost management. Thank you very much. Thanks for Jack. Coming next, let me just welcome Samuel from UBS.

Speaker #1: The line is open for you. Thank you. Thanks for Jack Yen and thanks for Ethan and thanks for Christina. I have a question regarding your Indonesia and Mexico market.

Speaker #1: I heard a few remarks from Jack Yen regarding the Indonesia market outlook, but let me just ask you a follow-up question. What are the same store sales and overall sales trends in Indonesia and Mexico over the past few months in April and May?

Samuel Wang: I heard a few remarks from Jeff Ye regarding the Indonesia market outlook. Let me just ask you a follow-up question. What are the same-store sales and overall sales trends in Indonesia and Mexico over the course of two months in April and May? What is your strategy for both markets, especially in Mexico? How should you comment on the sales and profit growth outlook for both markets in 2024? Thank you. Thank you. I think I have already covered Indonesia market. Let me talk about Mexico. The Mexico trend was positive. Same-store sales already turned positive. Multimedia are also delivering positive growth. From April to May, same-store sales improved meaningfully. Strategically speaking, we're going to work on channel upgrade. Mexico used to be dominated by small stores under 300sq ft. This year, we're going to roll out larger stores.

Speaker #1: And what is your strategy for both markets, especially in Mexico? And how should you comment on the sales and profit growth outlook for both markets in 2024?

Speaker #1: Thank you. Thank you. I think I have already covered Indonesia market. Let me talk about Mexico. The Mexico trend was positive. Same store sales already sent positive, North America are also delivering positive growth.

Speaker #1: From April to May, same store sales improved meaningfully. And the strategically speaking, we're going to work on channel offerings. Mexico used to be dominated by small stores under 300 square meters.

Speaker #1: This year, we're going to roll out land stores. Larger store not only means a larger sales footage, it represents comprehensive offerings on IP, density, and draw time to improve the higher ticket size and repeat purchase.

Guofu Ye: Larger store not only means a larger floor footage, it represents comprehensive upgrade on IP density and dwell time to improve the higher ticket size and repeat purchases. Our large store practice in China is fully validated. We're going to have it in Mexico now. Looking to the future, Mexico, the same-store sales should maintain positive. New store benefits of the channel upgrade would be visible in H2. Latin America has substantial consumption power and a fragmented competitive landscape. As long as we open right store and execute IP operation well, the market is still quite promising. For Mexico, we're going to have a large store starting from H2 of this year. We're very look forward to its performance. Thank you. Thanks for Samuel, and thanks for Jeff. Next up, Kan from Jefferies. Thank you. Thanks for Christina. I have a question regarding the mainland China market.

Speaker #1: Our large store practice in China is purely validated. We're going to have it in Mexico now. Looking to the food here, Mexico the same store sales should maintain positive.

Speaker #1: New store benefits of the channel upgrade would be visible in H2. Latin America has substantial consumption power and the fragmented competitive landscape. As long as we open right store and execute IP operation well, the market is still quite promising.

Speaker #1: Because for Mexico, we're going to have a large store starting from H2 of this year. We really look forward to its performance. Thank you.

Speaker #1: Thanks for Samuel and thanks for Jack. Then let's welcome Anne from Jeffrey. Thank you. Thanks for Christina. I have a question regarding the mainland China market.

Speaker #1: As you can see, the general speaking, social retail data is not looking right. However, as I was talking to the expert, we found out many store stores, your performance is much better than other peers.

Kin Shun Ling: As you can see that generally speaking, social retail data is not looking bright. As I was talking to the expert, we found out MINISO Group, your performance is much better than other peers. Is it possible for you to share with us, are there any strategic updates that you can share with us? What are you going to do next? Just now, we have already mentioned some of our franchisees, they're happy to open the large stores. Can I just kindly ask you, are there any capital support we've provided to our franchisees? Any strategies you have on the China market you're happy to share? Thank you very much. Let's talk about renovation progress. We renovated around 80 stores this quarter with clear results. Average daily sales increased by 50% post-renovation, validating the effectiveness of our store upgrade strategy.

Speaker #1: Is it possible for you to share with us are there any strategic updates that you can share with us? And what are we going to do next?

Speaker #1: Just now? We have already mentioned some of our franchisees, they're happy to open the large stores. But can I just kindly ask you, are there any capital support we've provided to our franchisees?

Speaker #1: Any strategies you have on the China market we're happy to see? Thank you very much. Let's talk about renovation progress. We renovated around 80 stores this quarter with clear results.

Speaker #1: Average daily sales increased by 50% post-renovation. Validating the expectancies of our store upgrade strategy. For 2026, we plan to renovate more than 300 stores.

Guofu Ye: For 2026, we plan to renovate more than 300 stores, and we'll need to do it in a phased, paced, and proactive intervention way. In other words, open big, plus more open good and plus wake, and transferring those aging other types of stores into new store formats. We place to emphasize on evaluating the visual identity standard in display type experience, mix, and to have an efficient renovation strategy. Let's also talk about franchisee profitability and payback. From Q1 2025 to Q1 2026, the share of the profit from franchisee stores continued to go up. The GP margin continued to expand. On payback period, large stores are meaningfully higher than the store-level profitability. For some of the best-performing single-box stores can even achieve a payback within 6 months, compared with around 80 months for the standardized store.

Speaker #1: And we need to do it in a phased pace and proactive intervention way. In other words, open big, close small, open good, and close wake.

Speaker #1: And transferring those aging undersized stores into new store formats will place store emphasis on evaluating the visual identities, standard display, IP experience, mix, and to have efficient renovation strategy.

Speaker #1: Let's also talk about franchisee profitability and payback. From Q1 2025 to Q1 2026, the share of the profit from franchisee store continued to go up.

Speaker #1: The GP margin continued to extend. On payback period, large store are meaningfully higher than the store level profitability for some markets past performing since the past school and even achieve a payback within six months compared with around 80 miles for the standardized store.

Speaker #1: In 2026, we continue to reinforce the franchisees, their understanding over the large stores will receive some positive feedback from many of our large store franchisees from 50% of the new store application received by the headquarter of our large store format.

Guofu Ye: In 2026, we continue to reinforce the franchisees, their understanding over the large stores where they did some positive feedback from how many of our large store franchisees. 50% of the new store application received by the headquarters are for large store format. The feedback indicates franchisees are increasingly willing to invest in large store renovation. It also reinforces the importance of our strategic shift towards improving store quality. Thank you. Thank you, Ann. Coming next, let's welcome Runbo Yang from CICC. Hi, Jack and Eason. I have a question regarding mainland China businesses. As we can see in April and May, the micro consumption data in China is still fluctuating. I would like to ask the management team, in terms of the foot traffic and the willingness to spend, is there any change? What trends are you observing across different city tiers and consumer cohorts?

Speaker #1: The feedback indicates franchisees are increasingly willing to invest in large store renovation. It also reinforced the importance of our strategic shift towards improving per store quality.

Speaker #1: Thank you. Thank you, Anne. Coming next, let's welcome Yang Renbo from CICC, please. Hi, Jack and Ethan. I have a question regarding mainland China business.

Speaker #1: As we can see, in April and May, the micro consumption data in China is still fluctuating. I'd like to ask the management team in terms of the foot traffic and willingness to spend, are there any change?

Speaker #1: What trends are you observing across different city tiers and consumer goals? Same store average daily order volume and average ticket size are both going up.

Guofu Ye: Same-store average daily order volume and average ticket price are both going up. The ticket price is approaching RMB 40. There's one driver that is becoming more important for our China growth, that is membership operation. It's most important strategy we have. A high quality, highly engaged membership system provide more predictable growth with strong resilience going through the industry cycle. The data tell us very clearly, members spend at a meaningful higher than the non-members. The higher the share of the members sales, the higher the quality and profitability of the overall business might be. For the past few months, our membership ratio increased from 60% to more than 70%, driven primarily by new consumer acquisition. In H1 of 2026, we'd like to work on the member acquisition. In H2, we will focus on repeated purchases.

Speaker #1: The ticket size is approaching only 40. There's one driver that's becoming more important for our China growth. That is membership operations. It's most important strategy we have.

Speaker #1: A high-quality, highly engaged membership system. Provide more predictable growth with strong resilience. Going through the industry circle. The data has told us very clearly.

Speaker #1: Members spend at meaningfully higher than the non-members. The higher the share of the member sales, the higher the quality and predictability of the overall business might be.

Speaker #1: For the past few months, our member chairs we share increased from 60% to more than 70%. Driven primarily by new consumer acquisition. In H1 of Asia, we'd like to work on the member acquisitions.

Speaker #1: In H2, we were focused on repeated purchase. When the two are combined together, it can help to complete a membership growth flywheel. Taking a look at the city tiers, we observe some positive trend.

Guofu Ye: When the two are combining together, it can help to complete a membership growth flywheel. Taking a look at the city tiers, we observed some positive trend. Consumption potential being unlocked for 4 tiers. Same-store sales are all positive for all city levels. Provincial capitals are driven by large stores as well as top-level IP. New tier cities are driven by potential penetration and customer acquisition. The growth was pretty healthy during the Chinese New Year. We rolled out the trendy toys to the countryside strategy, bringing MINISO products and the same store experience to county-level markets, which can help us to have a same-store sales in county-level reach double-digit numbers. This tells us emotional demand for IP and the trendy toys cover a much broader audience. Young people in counties, they also have the same demand. They typically don't have the shelf and adequate supply before.

Speaker #1: Consumption potential being unlocked for all tiers. Same store sales are all positive for all cities levels. Provincial capitals are driven by large stores. As well as top-level IP, nuclear cities are driven by potential penetration and customer acquisition.

Speaker #1: The growth was pretty healthy. During the Chinese New Year, we rolled out the trendy toys to the countryside strategy, bringing meaningful IP products and the same product experience to country-level markets.

Speaker #1: And which can help us to have the same store sales in country-level range to double-digit numbers. This helps us emotional demand for IP in the trendy toys cover much broader audience.

Speaker #1: Young people in county, they also have the same demand. They simply don't have the shared and adequate supply before. This can also see meaningful brands has already covered different consumer cohorts.

Guofu Ye: This can also see meaningful brands has already covered different consumer cohorts. The depth of the China market is far richer than what is being generally appreciated by the market. Coming next, let's welcome Xu Xiaofa from CICC. Okay. We may move to the next question then. Let's welcome Xu Yi from Huatai Securities. Hello, can all of you hear me? Yes. Good. Loud and clear. Thank you. I'm Xu Yi from Huatai Securities. I have a question regarding the same-store sales in China. We see in Q1 of this year, the company did a good performance on same-store sales. In the next few quarters, the baseline was being elevated. How are you going to comment on the same-store sales rising and the subsequent quarter performance? What strategies and tactics are in place for the standard same-store growth? You're right.

Speaker #1: The depth of the China market is far greater than what has been generally appreciated by the market. Coming next, let's welcome Xu Xiaofan from CICC, please.

Speaker #1: Okay. We may move to the next question first. Let's welcome Xu Di from Baihai Securities first. Hello. Can I already hear me? Yes, great.

Speaker #1: Loud and clear. Thank you. I'm Xu Di from Baihai Securities. I have a question regarding the same store sales in China. We see in Q1 of this year, the company did a good performance on same store sales.

Speaker #1: In the next few quarters, the baseline will be elevated. So how are you going to comment on the same store base rising and the subsequential quarter performance?

Speaker #1: What strategies and tactics are you based for sustain the same store growth? You're right. The baseline is indeed rising, but we have a clear and systematic strategy in place.

Guofu Ye: The baseline is indeed rising. We have a clear and a systematic strategy in place. Let me just share with you a few data during the May Labor Festival. Domestic sales were up by a high double-digit number, outpacing major competitors. Average daily sales hit an all-time holiday high, even higher than daily average during the Chinese New Year holiday earlier this year. Recent third-party data show us foot traffic was under pressure during the May Labor holiday, but our store, the entry level improved by 4.1%. Average store traffic also rose, means we drove traffic against the headwinds. By category, toys, digital accessories, and travel categories that deliver 25% growth, which is a hard-earned result. For sustaining same-store growth, we have the following strategies. For IP collaboration, we continue to deliver differentiated and high-frequency launches. For example, with the two available exclusive license for F1 for Disney collaboration.

Speaker #1: Let me just share with you a few data. During the May labeled festival, domestic sales were by a high double-digit number. Outpacing major competitors.

Speaker #1: Average daily sales hit on all-time holiday highs. Even higher than daily average during the Chinese New Year holidays earlier this year. We see some third-party data show us foot traffic was under pressure during the May labeled holiday, but our store entry level improved by 4.1%.

Speaker #1: Average per store traffic also grown. Means we drove traffic against the headwinds. By categories, toys, digital accessories, and travel categories, we deliver 25% growth.

Speaker #1: Which is hard-earned result. For sustaining same store growth, we have the following strategies. For IP collaboration, we continue to deliver differentiated and high-frequency launches.

Speaker #1: For example, we secure a global exclusive license for F1 plus Disney collaboration. And May through June, there will be a few gifting seasons with Mother's Day, Children's Day, Father's Day, and 5/20.

Guofu Ye: May through June, there will be a few gifting seasons with Mother's Day, Children's Day, Father's Day, and 520 analogy days. We have already built dedicated assortment and event plans according the gifting data to improve the average ticket size. For operating, we also roll out the foot traffic concept at a store and to further empower our store. The supply chain also continue to improve. Even during the May Day holiday, we can unlock the south window. Even with the baseline going up, we have a diversified toolkit, and we are confident in continue to deliver strong same-store performance. Thank you. Thanks for Jack. Mrs. Xu, are you there from CICC? Can you unmute yourself to ask your question? Yes. Christina, thank you. I have to say sorry. There might be some technical issue with my line. Jack, Ethan, good afternoon.

Speaker #1: I love you days. And we have already built dedicated assortments and event plan according to the gifting data. To improve the average ticket size.

Speaker #1: For operating, we also rolled out the foot traffic contest at the store. And to further empower our store, the supply chain also continued to improve.

Speaker #1: Even during the May day holiday, we can unlock the sales window. So even if the baseline is going up, we have a diversified toolkit and we are confident in continued deliver strong same store performance.

Speaker #1: Thank you. Thanks for Jack. Madam Xu, are you there from CICC? Can you unmute yourself for questions? Yes. Christina, thank you. I have to say sorry.

Speaker #1: There might be some technical issue with my line. Jack, Ethan, good afternoon. I have a question regarding your proprietary IP. For the past few six months, we see that your proprietary IP started to show up in your store media and related cities.

Xiaofang Xu: I have a question regarding your proprietary IP. For the past six months, we see that your proprietary IP started to show up in your store media and the listed cities. The designs seem quite interesting. Is it possible for you to share with us your proprietary IP, for example, YOYO, as well as the pet line and other models? Thank you. A very good question. Let me elaborate on that. Third-party licensed IP and proprietary IP, same selling the same product, but the logic would be different. Let's talk about the GP margin. Proprietary IP products have a high margin compared with licensed IP. The underlying logic matters the most. Proprietary IP is most exclusive and absolutely differentiated. If you want to sustain the GP margin, you need to have a proprietary IP.

Speaker #1: The designs being quite interesting. So is it possible for you to share with us your proprietary IP? For example, do you as well as Tesla?

Speaker #1: And tomorrow. Thank you. A very good question. Let me elaborate on that. Third-party licensed IP and proprietary IP seem selling the same product, but the logic would be different.

Speaker #1: Let's talk about the GP margin. Proprietary IP products have a high margin compared with licensed IP, but the underlying logic matter the most. Proprietary IP is most exclusive and absolutely differentiated.

Speaker #1: If you want to sustain the GP margin, you need to have the proprietary IP. The pricing power operating authenticity and entire value chain of the proprietary IP is excluded in our hands.

Guofu Ye: The pricing power, operating authenticity, and entire value chain of the proprietary IP is truly in our hands. It also provides long-term high-margin mode. You need to think about how to diversify the monetization model. A mature proprietary IP isn't just product. You can sub-license it to a third party. You operate across multiple formats, and it can also drive content production and operating the IP capacity. Those are all extreme high-margin business models that compound over time. YOYO appearance on the Macau Grand Prix and entry in professional way reflect build out the brand value rather than sell product only. We're building our proprietary IP. We're building a business model on an entirely differentiated stuff, and it moves the inclusion upgrade for MINISO long-term profit structure. Thank you. Thanks for Jack. Coming next, let's welcome Mr. Jin from Changjiang Securities, please. Thank you. Thanks for the management team.

Speaker #1: It also provides long-term high margin mode. However, you need to think about how to diversify the monetization model. A mature proprietary IP isn't sell product.

Speaker #1: You can sub-license it to the third party. You operate across multiple formats. And it can also drive content production and operating the IP capacity.

Speaker #1: Those are all extreme high margin business models. That compounds over time. Do you appearance on the map data and entry into fashion week reflect viewed as the brand value rather than sell product only?

Speaker #1: While building our proprietary IP, we're building a business model on the entirety differentiated sales. That is most important upgrade for meaningful long-term profit structure.

Speaker #1: Thank you. Thanks for Jack. Coming next, let's welcome Mr. King from Tangzhong Securities, please. Thank you. Thanks for the management team. I'm King Yang from Tangzhong Securities.

Jin Yang: I'm Jin Yang from Changjiang Securities. I have a question regarding the Europe business. It seems the business growth in Europe is quite fast, and you are still in the investment phase. Europe is a big market for you to explore. Can I ask Jack here, can you share your view on the long-term opportunities in Europe and the specific strategy plans? For the mid and short run, what would be the pace of the store investment in Europe this year, the profit quality of the new stores, and what would be the change of the margin for the group? Thank you. Europe has delivered continuous positive same store sales growth this year, with the leading category being trendy toys category, for example, like the Beados brush and the blind box. This is also the reason for us to go for international expansion.

Speaker #1: I have a question regarding the Europe business. It seems the business growth in Europe is quite fast and you're still in the investment phase.

Speaker #1: And Europe is a big market for you to explore. So can I ask Jack here? Can you share your view on the long-term opportunities in Europe and specific strategy plan?

Speaker #1: And for the mid and short run, what would be the pace of the store investment in Europe this year? The profit quality of the new stores and what would be the change of the market for the stores?

Speaker #1: Thank you. Europe has delivered continued positive same store sales growth this year. With the leading category being trendy toys, categories for example, like the bit of gosh and the dry bars.

Speaker #1: This is also the reason for us to go for international expansion. We're not bringing in products others already selling. We'd rather bring in the consumption scenario and IP trendy toys to open new demand.

Guofu Ye: We're not bringing in products others already selling. We're rather bringing the consumption scenario and IP trendy toys to open new demand. Channel operates are progressing in parallel. The MINISO Land store will roll out in H1 of this year. Regarding the profitability, Poland and Germany are strong proof points. Both directly operated stores that have outperformed expectations, and the store level and market level operating margin reach double digits. The Germany overall operating margin for more than 10 stores has already stabilized with double digits. Other markets are ramping up. Q1 is traditionally the off-season for retail. It is also the best window to prepare for new store opening. Our long-term profitability target for Europe is 15% to 20% OPM. Germany has already achieved that. Other markets were further up. Europe is a market worth of long-term cultivation. We have the patience, and we have a clear pathway there.

Speaker #1: Channel upgrades are progressing in parallel. The land store will roll out in H1 this year. Regarding the profitability, Poland and Germany are strong proof points.

Speaker #1: Both directly operated stores have outperformed expectations and the store level and the market level operating margin which double digits. The Germany overall operating margin brought more than 10 stores has already stabilized with double digits.

Speaker #1: Other markets are ramping up. Q1 is traditional. Means the earth isn't 't for retail. It is also the best window to prepare for new store opening.

Speaker #1: And our long-term profitability target for Europe this is clear. Germany has already achieved that. Other markets were followed up. Europe is a market with long-term cultivation.

Speaker #1: We have the patience and we have a clear path with it. Thank you. Thanks for Jack here and thanks for Mr. King for the question.

Wu Chunxi: Thank you. Thanks for Jack here, and thanks for Mr. Jin for the question. Coming next, let's welcome Wu Chunxi from Guotai Junan Securities. Thank you. Jack, Eason, and Christina, thanks for giving me the chance. I have a question regarding US. It seems that you operate a large store format in US for quite a while. Is it possible for you to walk us through the operational details as well as the operational results? If you can see that, what is the purchase frequency of your US members? Is it improved as you roll out large stores? Thank you, Mrs. Xu. As I was emphasizing again and again, that is what we are doing now. For the past two to three years, MINISO continued to build up our non-US consumer group, the largest DTC network in the local area.

Speaker #1: Coming next, let's welcome Wu Chunqi from Guotai Haitong. The lights open, please. Thank you. Jack, Ethan, and Christina, thanks for giving me the chance.

Speaker #1: I have a question regarding US. It seems that you operate a large store format in US for quite a while. Is it possible for you to work us through the operational details as well as the operational result?

Speaker #1: And it can see that what would be the purchase frequency of your US members? Is it improved as you roll out large stores? Thank you, Mr. Miss Wu.

Speaker #1: As I was emphasizing again and again, that is what we're doing now. For the past two to three years, many stores continue to build up our non-US consumer groups.

Speaker #1: The largest this is a network in the local area. So starting from January of 2025, we started to explore the large stores. Before that, you say that we entered into US market in 2017.

Guofu Ye: Starting from January 2024, we started to explore the large scale. Before that, you see that we entered into the US market in 2017. By then, the majority of our stores are located in US shopping malls. From January 2024, we started to have our bottom group of stores improved, and we started to build our understanding of the process. By the beginning of this year, Jia went to the US to tour around our stores. We found out our bottom store has already moved into a 2.0 version type. What does 2.0 version mean? Our 2.0 version store is not picky about the business district at all. You can say that for our good and large bottom stores, even in an average business district, its store sales and efficiency per square meter is still improving.

Speaker #1: By then, majority of our stores are located in US shopping malls. But from January of 2024, we started to have our garden proof stores be opened.

Speaker #1: And we started to build our understanding of what by the beginning of this year, Jack here went to US to tour around our stores.

Speaker #1: We find out our bar store has already moved into a 2.0 version time. What does 2.0 version mean? And our 2.0 version store is not picky about the business district at all.

Speaker #1: You can say that for our food and large bar stores, even in an average business district, its store sales and efficiency per square meter is still be looking right.

Speaker #1: Compared with the 1.0 version bar store, the 2.0 version are actually showing better profitability. So we have already provided you a single store pre-order in the US.

Guofu Ye: Compared with the 1.0 version bottom store, the 2.0 versions are actually showing better profitability. We have already provided you with a single-store profit performance in the US. Generally speaking, for a single store, the payback takes around one year in the US. While for the 2.0 version store, the payback period has been controlled within one year. While for MINISO, we are committed to long-term business, and we stick to long-term investment. For the 2.0 version stores, and it provided above expectation single-store performance, and it also sustained and continued with improvement. In other words, in the near future, our US 2.0 version store can be rolled out to more cities and more business districts. It's a proven success, which can help us to continue to unlock its potential in the US market. The second question, you were talking about the sales data from our members.

Speaker #1: Generally speaking, for a single store, the payback takes around one year in the US. Where for the 2.0 version store, the payback period has been controlled within one year.

Speaker #1: Where for MINISO, we are committed for the long-term business and we stick to the long-term investment. So for the 2.0 version store, and it's provided about the expectation same store performance.

Speaker #1: And it's also sustained and continued with improvement. In other words, in the near future, our US 2.0 version store can be rolled out to more cities and more business districts.

Speaker #1: It's a proven success which can help us to continue to unlock its potential in the US market. The second question you were talking about the sales data from our members.

Guofu Ye: In China, we have a very mature and well-established CRM operation system. In that way, we will be able to extend our success China membership management to the US. For the past 1 year, the sales growth from our US members is quite significant. In China, we started to do membership in 2018, and in 2021, the membership sales exceeded half of our total business. We made 5 years of making the membership spending accounting for half of our revenue. While in the US, we only spent 1 year to make that happen. You can also see the repurchase rate of the US consumers is no less than that of the Chinese members. That's the reason, and we believe we're going to have a very healthy store efficiency this year, and we have every confidence for that. Thank you. Thanks for Jia, and thanks to Yizhang.

Speaker #1: In China, we have a very mature and very established CRM operation system. In that way, we will be able to extend our success China membership management to the US.

Speaker #1: For the past one year, the sales growth from our US members has been quite significant. And the China started to do membership in 2018.

Speaker #1: And in 2021, the membership sales exceed half of our total business. And we made five years of making the membership standing accounting for half of our revenue.

Speaker #1: Where in the US, we only spent one year to make that happen. And it can also see the repurchasement rate of the US consumer is no less than that of the Chinese members.

Speaker #1: So that's the reason. And we believe we're going to have a very healthy store efficiency this year. And we have every confidence for that.

Speaker #1: Thank you. Thanks for Jack here and thanks for Ethan. Thanks for all the investors and the analysts for your questions. Thanks for everyone to be a part of our MINISOs.

Christina Mengyun Zhu: Thanks for all the investors and analysts for your questions. Thanks for everyone to be a part of our earnings call. If you have any further questions, feel free to contact my team. Thanks for your attention this quarter for MINISO. See you next quarter.

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