Miniso Group Holding Ltd (MNSO) reported a robust 22% year-over-year increase in total revenue, reaching RMB 12.28 billion. This strong performance was met with a positive market reaction, as shares rose 1.73% in premarket trading. The company also announced significant improvements in profitability and cash flow, bolstered by strategic partnerships and global expansion efforts.
Key Takeaways
- Total (EPA:TTEF) revenue increased by 22% year-over-year.
- Gross profit margin improved by 3.7 percentage points to 44.1%.
- Stock price rose 1.73% in premarket trading.
- 859 net new stores added in Q3, with significant overseas growth.
- Strong cash reserves of nearly RMB 6.3 billion.
Company Performance
Miniso demonstrated a solid performance, with its revenue growth significantly outpacing the domestic retail market's 3.8% increase. The company's strategic focus on IP-centric and interest-based consumption has resonated well with young consumers, particularly in expanding markets such as Southeast Asia and the U.S. This performance highlights Miniso's ability to leverage its asset-light business model and strong supply chain capabilities.
Financial Highlights
- Revenue: RMB 12.28 billion, up 22% YoY
- Gross profit margin: 44.1%, up by 3.7 percentage points
- Adjusted operating profit: RMB 1.93 billion, up 60%
- Operating cash flow: RMB 2.03 billion
- Free cash flow: RMB 1.47 billion
- Cash reserves: Nearly RMB 6.3 billion
Earnings vs. Forecast
While specific EPS and revenue forecasts were not provided, the company's robust financial performance and the positive market reaction suggest that Miniso likely exceeded market expectations. Historical trends indicate that Miniso has consistently delivered strong growth, and the current results reinforce this trajectory.
Market Reaction
Miniso's stock rose 1.73% in premarket trading to $18.81, following the earnings announcement. This increase reflects investor confidence in the company's growth strategy and financial health. The stock's recent performance, moving closer to its 52-week high of $25.50, indicates a positive sentiment compared to broader market trends.
Company Outlook
Looking ahead, Miniso has set ambitious targets, aiming for a 20-30% full-year revenue growth and a net profit target of RMB 2.8 billion. The company plans to open 700 overseas stores and 100 Top Toy stores in 2024, with a focus on expanding in high-growth markets. This expansion is expected to drive overseas market growth by 45-50%.
Executive Commentary
CEO Mr. Ye highlighted the company's strategic direction, stating, "We believe by steady fast implementation of our multi-brands and globalization strategy, we will not only strengthen our existing competitive advantage but also help consumer market to navigate instabilities." CFO Yi Sun expressed confidence in the company's growth prospects, noting, "We have many store expansions in overseas markets, which lay a solid foundation for top-line growth next year."
Q&A
During the earnings call, analysts inquired about Miniso's strategy for the Yonghui acquisition and the performance of its IP products. The company also addressed its expansion plans in the U.S. and European markets, as well as challenges related to same-store sales and its O2O and warehouse store strategies.
Risks and Challenges
- Potential U.S. tariff risks could impact profitability.
- Challenges in maintaining same-store sales growth.
- Macroeconomic pressures in key markets.
- Supply chain disruptions could affect product availability.
- Market saturation in mature regions may limit growth.
Miniso's comprehensive earnings report and strategic initiatives underscore its strong market position and growth potential, despite facing some industry challenges.
Full transcript - Miniso Group Holding Ltd (NYSE:MNSO) Q1 2025:
Conference Operator: Ladies and gentlemen, thank you for standing by, and welcome to Bitauto's Earnings Conference Call for September quarter 2024. At this time, all participants are in a listen only mode. After the management's prepared remarks, we will conduct a QA session. Before joining the QA session, please mark your name and institution. And please be kindly noted this event is being recorded.
Simultaneous interpretation in English will be provided during this call. You may choose a language by clicking the interpretation into Zoom (NASDAQ:ZM) meeting. We have announced our September quarter financial results earlier today, I'd like to refer you to the safe harbor statement in our earnings press release, which also applies to this call because we are going to make a forward looking statement. Please note that we're going to discuss non IFRS financial measures today, which we have explained and reconciled to the most comparable measures reported under the International Financial Reporting Standard in the company's earnings release and filings with U. S.
SEC and Hong Kong Stock Exchange, the currency units in Chinese yuan, unless otherwise stated. In addition, we have prepared the slide presentation for today's call, which contains financials and operational informations. If you are using Zoom meeting, you will be able to see it right now. You can also revisit it on our IR website. Now I'd like to welcome Mr.
Ye to deliver the speech. Hello, everyone. Welcome to Minuso Group's earnings conference call for September quarter of 2024. As of September 30, 2024, the group added 859 stores on a net basis, including 324 new MINISO stores in China, 449 in overseas and 86 new Top Toy stores. Plus minisoul overseas and the top toys net store in addition in the 1st 3 quarters has exceeded their respective full year number from last year as minisoul global store network continued to expand.
In the 1st three quarters, the company's revenue increased by 23% yoy to RMB 12,280,000,000 with average store count increased by 90% with same store sales growing in a low single digit. The world is changing, and global retail industry experiencing major reshuffle. Consumer's perception continue to evolve. In this time of the greater transformation, China retail sector is facing opportunities for breakthrough. MINISO Group will firmly grasp the 2 trends in the future, maintaining a focus on quality retail and interest based consumption.
The future will be characterized by consumption model that combines product innovation and the consumer experience. And you can see in September, the company announced the acquisition of 29.4 percent stake of Yong Hui. Through this ongoing transformation, we aim to excel the quality retail, change conditional supermarket approach and deliver superior product, service and consumer experience. And investors as we see transformed the Yongpay store during this period, which should help us better understand our investment rationale. Moving forward, we will decide, dedicate more efforts to study consumers and understanding the changing consumption trends, maintaining a people centric approach and returning to retail fundamentals.
In the completion of Yonghui's stake acquisition, MINISO were in campus 3 brands, MINISO, Top Toy and Yonghui. Those brands complement each other while differentiating in product categories, targeted consumers and price points, gradually beating a unique multi brands, metrics in the retail sector. Meanwhile, leveraging MINISO's years of accumulated supply chain resources and the product design capacity as a shared platform, we will be able to empower those brands to improve the synergy and operational efficiency. We remain focused on the consumer retail industry. We believe by steady fast implementation of our multi brands and the globalization strategy, we will not only strengthen our existing competitive advantage but also help consumer market to navigate instabilities and diversify operational risks.
MINISO core business maintained our growing commitment for the 3 major 5 year plans from 2024 to 2018, maintaining a compound annual revenue growth rate of no less than 20% with earnings per share grow faster than revenue. Second, 8,901,000 new stores globally each year on a net basis, achieving IP product sales contribution over 50% by 20 28. The dividend policy of distributing no less than 50% of adjusted net profit annually continued the dynamic share repurchasement, delivering predictable returns to our shareholders. Coming next, I'm going to share with you, MINISO China, MINISO Grow Overseas and the Top Toy development in the 1st 3 quarters of this year. First, MINISO China revenue growth in the 1st 3 quarter met the expectation of our 5 year plan, including both of store and e commerce revenue grow by 12.3 percent with offline store grow by 11.8% and e commerce grow by 90%.
And 11.8% for online store was primarily driven by 40.7% increase in average stores count, where same store sales slowed a mid single digit decline in 1st 9 months of this year. Fitting the challenging micro consumption environment, we actively divested our auto business, which grew by nearly 80% on a while basis, helping us to stabilize same store performance to some extent. According to the National Bureau of Statistics, domestic retail sales of the consumer goods increased by 3.8% in the 5th 9 months of 2024. As an industrial leader, we achieved the growth rate of 12.3%, demonstrating greater resilience of our business. So we feel optimistic about the MINISO's China healthy growth in 2025.
In the 1st 3 quarters, we added 3 24 net new stores in China, maintaining a steady expansion pace towards our annual target of 350 to 450 net new stores, 60% of the low steel stores being in Tier 1 to Tier 2 cities, which tells us we still have significant untapped market for store expansion in China. Same store sales declined by mid single digit number in 1st 3 quarters with transaction value showing a slight increase while while while transaction volume decreased by mid single digit, high tier city outperformed lower tier cities in the same store performance. In the near future, we're going to have refined management of our IP centric product, making sure IP centric interest based consumption strategy of our business and continue to further improve the sales efficiency. The IP consumer goods market is a trading level market with great potential for MiniSource IP strategy. According to Global Licensing Report in 2023, the top 10 global IP licenses accounted for nearly 70% of the global IP retail sales, where the top 20 licenses represent more than 80% of that, demonstrating a very strong concentration effect.
Over the past few years, Mediasol has achieved significant success in IP. We have collaborated with more than 150 IP globally. We have partnered with 6 of the world top 10 IP licensors and 9 of the top 20. Moving forward, we will forge deep bonds with those leading global IP licensors, leveraging our global store network, design capacity and the supply chain advantage to launch new product. We have already begun the deep collaboration with Disney (NYSE:DIS)'s and the same role on the important product innovation category.
We also worked with Harry Potter IP, bringing new inspirations to MINISO's product design style. Accumulating experience in developing new SKU categories, but also continue to stimulate MINISO's potential for future collaboration with more diversified IP stills. We also improved product strength, striving to unlock the potential of the interest based consumption through innovative store formats. The 7 major store metric strategy announced at our brand upgraded conference on October 29th been implemented systematically. We're going to have the IP scenarioization and the characterized scenarioization.
The IP land store represent our IP standardization format. In August, our first municipal land opened in Binjiang Road, Tianjin, achieving nearly RMB5 1,000,000 in sales in its 1st month. Shanghai IP Land Store opened in October, so IP products accounted for 70% of the sales during its soft opening months. We hope we not only provide the experience but also exclusive IT product enhancing shopping uniqueness. For category scenarioization, same store are our key format.
Mini Store will develop a service of 800 to 600 category themed stores focusing on 4 major categories: plush toys, light boxes, pads and ACG, targeting young consumers and emerging consumption trends. The plush themed store that opened in Times Square in Chongqing in December has become a landmark destination for the plush toy fans. And you can also see that our sales force scrubbing have also continued to be improved. Going forward, MINISO will combine product differentiation with store format differentiation using different store formats to meet consumer variety needs, bring more joy to the global consumers. Coming next, let's talk about overseas business.
In the 1st 3 quarters of 2024, overseas revenue exceeds RMB4.5 billion, representing YY growth of 41% and especially for direct operated markets grew by 64%. Distributor market increased by 22%. GMV reached RMB9.7 billion in the 1st 3 quarters, grew by 31%. The directed operated markets showing 56% growth. Distributor market grew by 22% on comparable basis.
IP strategy continue to have a notable growth. The IP product accounted for over 40% of the overseas market sales in 1st 3 quarter, sales revenue growing by nearly 85% on a yoy basis. In the 1st three quarters, we see very good growth. The result is quite impressive, net addition of more than 4 49 stores. Direct operated markets contributed to 67% of the net new stores, primarily from the United States or Indonesia.
We see the total net new stores for this year will reach 650 to 700, exceeding our previous forecast. Same store growth in overseas market show a high single digit growth number. We were going to keep a flexible store operation model, introducing franchised store in direct operated market to leverage for leverage expansion. We're deepening the involvement in the distributor markets to better guide the store openings and operations. Notably speaking, Italy ranked among the top 20 overseas market in Europe in 2023.
By 2024, we have 4 major European markets, U. K, Italy, France and Spain, showing rapid development. Those are all because of our deep guidance to the distributors to adjust the inventories and the store operations, improving the efficiency and profits. In the near future, we aim to increase consumer stickiness in overseas market through continuous optimization membership system, in-depth consumer research. Take Indonesia and the U.
S. Market as an example. Member consumption contribution grew by 97% and 244%, respectively, significantly outpaced membership growth in both regions. We will further divide the localized product and adapt the store operation strategy to local market, realizing MINISO from China joy to the world. Regarding the potential U.
S. Tariff increase risks, we probably view this as an industrial wide impact. Compared to other retailers who mainly rely on buyer sourced merchandise, our products are predominantly municipal private brands. And through our IP collective store model, we maintain differentiation from other retailers, giving us stronger pricing power to offset potential cost increase. Nevertheless, we take the forward measures to mitigate potential risks.
Increasing local sourcing ratio in U. S. Market, now around 60% of the products being sourced from overseas supply chain. Establishing our backup overseas supply chain, we actively identify alternatives in South Asia, Japan, Korea and within the U. S, expecting to cover an additional 50% of the U.
S. Product category. We have the capacity to source over 80% of the products for U. S. Market through over source supply chain.
We optimize overseas inventory management strategies. Internally, we have a dedicated workforce to regularly assess global trade policy impact on our supply chain and to be able to formulate responsive measures. By having a diversified supply chain, we will be able to further improve inventory management, continue to strengthen our global competitiveness. Let me also talk about the Top Toy. In 1st 3 quarter, Top Toy revenue grew by 43% ryoy, same store sales grew by 5%.
Top Toy aided 86 new stores, steadily progressing the annual target of 400 stores. In Q3 of 2024, Top Toy's self developed products continue to increase. For example, the pilot of Top Toy, shopping shop in Minnesota's IP Land Store in Indonesia opened the 1st overseas store in Thailand. And because of young demographic structure, rapid economic development, young people become the target consumer of TopToys. We believe by deep dive into the Southeast Asia market, TopToys can achieve rapid growth, establish a solid foundation for its global expansion.
We always believe offline retail has unlimited potential. Chinese brands has great opportunity ahead. The key is for innovation and retaining to the retail fundamentals, focusing on consumer, bring the good service and product to consumer. When more Chinese brands are starting to showcase its great advantage, all the brands are running forward, breaking through and advancing. MINISO adhere to the long term strategy.
We are committed to steadily improve our product and service, contributing to the rise of the Chinese brands. That concludes my remarks. Coming next, I will have Yi Sun to present you the financials, please. Thank you, Mr. Ye.
Welcome everyone to our meeting. Coming next, let me just go through Miniso Group's financial data in the 1st 9 months of 2024. Please note, unless otherwise stated, all figures are in RMB. I will also mention some non IFRS financial metrics that exclude stock based compensation expenses. In the 1st 9 months of 2024, our total revenue reached RMB 12,280,000,000, grow by 22% on a yoy basis.
According to the forecast of the year, we are progressing towards our target. Average store count increased by 90% with comparable same store sales growth by a low single digit number. Revenue from China region reached RMB7.74 billion, grew by 40% on a worldwide basis. Within this, minigital brand China revenue was RMB 7,030,000,000, grew by 12 percent. Top toy brand revenue was RMB 700,000,000, grew by 43% on a YY basis.
Overseas revenue reached RMB 4,540,000,000, grew by 41%. Within this, revenue from direct operated overseas market was RMB 2,450,000,000, up by 64%. Distributor market was RMB 2,100,000,000, up by 22%. Take a look at the revenue structure. In the 1st 9 months, overseas revenue accounted for 37% of our total group revenue, where in the same period of 2023, the number used to be 32%.
The contribution from direct upgraded overseas market used to be 50% last year, but now it's already 20%. The change in the revenue structure is the key driver why we have a record high GP margin, which has also resulted in the operating profit being more concentrated to the second half of this year. Regarding the GP margin, in the 1st 9 months of this year, GP margin grew by 3.7 percentage point, reaching 44.1%. Besides the adjustment in our revenue structure, the improvement also benefited from the IP strategy, which improved the GP margin for all business segments, especially the overseas operations and the top toy GP margin, they all improved by a high single digit increase. Looking in the near future, with more overseas revenue and IP sales, our GP margin will continue to trend up.
However, as being mentioned by Mr. Ye, we will continue to uphold our value for the price to performance product. In the 1st 9 months of 2024, combining selling and administrative expenses increased by 54% and selling expenses up by 63%, administrative expenses up by 28%. Selling and administrative expenses accounted for 25% of the revenue, 5% higher than the same period of last year. Over 60% of those expenses increase was related to the newly opened directly operated stores.
As previously communicated, our current investment in directly operated stores aimed at capturing more sales opportunities to ensure our future business success, particularly in strategic overseas market like the U. S. At the end of September, we had 4 22 direct operated stores in overseas markets, double the number from the same period of last year. In the 1st 9 months of 2024, revenue from directed operated stores grew by 104%. Related selling and distribution expenses, for example, like rent, depreciation, amortization and personnel costs, grow by 75%.
We are implementing effective measures to improve the operational efficiency of those directly operated stores and control the cost. We believe with refined operation and strict expenses management, we believe the operating expenses ratio will be stabilized or trending down, and we also expect those new open directly upgraded store will unlock great sales potential in the near future. In the 1st 9 months of this year, advertising and promotion expenses grow by 38%, still be 3% of the total revenue, the same as last year. Licensing fee grew by 38%, accelerated compared with H1 of this year. The key reason is because we do have a few IP reserve more and launched a new IP product service.
The overall IP sales proportion notably increased, especially in overseas market. Logistics expenses increased by 52%, partially reflecting the higher shipping costs due to international shipping constraints in the 1st 9 months of 2024. However, we have observed a clear trend in the growth of these expenses. Regarding the profitability, in the 1st 9 months of 2024, adjusted operating profit grew by 60% and then adjusted operating profit margin was close to 20%. Adjusted net profit margin was RMB 1,930,000,000 up by 40%.
Our adjusted net profit margin was 50.7% and we also maintained a relatively faster growth for our directed sales model. Adjusted EBITDA. Earnings before interest, tax, depreciation and amortization increased by 21% with an adjusted EBITDA margin of 25.3%. Adjusted basic and diluted earnings per ADS increased by 40.1% 40.2%, respectively. Regarding the working capital, our channel inventory turnover remains efficient.
As the end of September 2024, 30% of the MINISOUCE brand inventory was located overseas. 1 year before, that number used to be 21%. Inventory turnover days was 85 days. China market, 71 days, unchanged on a y y basis. MINISO brand overseas directed upgraded market turnover was 100 and and 73 days, used to be 135 days last year.
It's because we are advancing the stocking to address potential tariff risks and also accelerated store openings. However, the average inventory level per overseas store decreased on a year over year basis. Structurally speaking, inventory aged over 180 days accounted for 12% of our total inventory. Going forward, we will further optimize our overseas inventory management strategy to improve the turnover efficiency, reduce the risks. Regarding the capital allocation, we will also maintain a dividend payout ratio of no less than 50% in the coming period.
Our capital allocation strategy will also balance rapid business growth with our commitment to delivering stable and predictable returns to our shareholders. By the end of September, we have already distributed cash dividends exceeding RMB600 1,000,000. Year to date, the company has returned approximately RMB1.6 billion to the shareholders through dividends and share buybacks. Starting from 2020, we have retained more than RMB 3,700,000,000 to shareholders. In the 1st 9 months of 2024, we generated operating cash flow of RMB 2,030,000,000 free cash flow CNY 1,470,000,000 at the end of 2024 September.
We maintained cash reserve of nearly CNY 6,300,000,000 including CNY 1,720,000,000 in cash and cash equivalents, RMB 4,230,000,000 in wealth management product recorded under other investment and restricted cash on the balance sheet, around RMB340 1,000,000 in deposit. The company's interest borrowing debt ratio remained lower than 1%, leaving empty room for our balance sheet. Last but least, I also would like to share with you the latest progress of Zhonghui transaction. The Zhonghui acquisition requires satisfying the 5 preconditions to date. The transaction secular has received non objection confirmation from the Hong Kong Stock Exchange.
The market supervision and administration authority has completed a public notification period for the simplified merger filing. This means we have essentially completed 2 of the 5 preconditions. The overall progress is meeting our expectation. We anticipate the transaction will be completed in first half of twenty twenty five. As previously communicated, after completion, Mediasol Group will become the largest shareholder of Yonghui.
Going forward, we will take investment by using equity method. We are positive about its future development. The current valuation is quite attractive. The investment will better leverage both party supply chain and the channel integration advantage to create more value to Chinese consumer. We expect to finance at least 60% of the investment account through external borrowing.
In other words, equals to RMB3.76 billion, allowing us to further optimize our capital structure and improve return on capital while maintaining sufficient capital reserves. So all in all, our performance in the 1st 9 months of 2024 again demonstrate our strength and resilience of our business model, which also reflect our effective execution and the development potential for the IP strategy. Looking to the future, our full year target remained unchanged from the beginning of this year. Revenue growth would be 20% to 30% on a yoy basis, but adjusted net profit target was CNY 2,800,000,000. I'm confident in achieving the full year targets, and I have every reason to remain positive about our future business development in 2025.
Our financial strategy will continue to keep vigorous roles in budgeting, cost control, capital allocation committed to achieving stable profit growth and healthy cash flow. Okay. That's all for the prepared remarks. Moderator, we can now start the Q and A session. Okay.
The first question is coming from Thank you very much. I have a few questions. I'd like to ask about the Q4 outlook. At least now, we see that in China, the market was not looking very well. So I'd like to ask you, in Q3 of this year, the performance also see same store decline and the growth is only a single digit number.
So how are you going to comment on the Q4 performance? What about the Double 11 sales festival? What's the situation may look like? Would you mind to be more elaborative on Q4 updates? And what would be your growth opportunities in China market?
That is my first question. My second question, you did a very good job for overseas business. Then I'd like to ask you, in your direct operated markets, how you're going to comment on the acceleration of the store expansion, for example, in U. S. Or in European countries?
Is there any measures we are going to take in order to further grow our business in overseas market? I think you have already experienced the Black Friday. Then how you're going to comment on the sales in festival occasions? How it's going to contribute or drive your Q4 performance? Thank you.
Okay. Thank you. Thanks, Hoenn. Thanks for your question. Let me just answer your question for the outlook of Q4.
I will ask Mr. Yan to share with you our comments on the U. S. Market in 2025. As we mentioned by me, we are still very confident in accomplishing the target we set by the beginning of this year.
In Q4, we believe our top line growth would be around 25% to 30%, within which the overseas market growth would be 45% to 50%, 45% to 50% growth. Direct upgraded model going to be 70% to 75%, where for distributor market, it's going to grow by a 20% number, where for toy, we're going to have a 50% to 55% growth, while in China, the growth would be a low teens number, including e commerce. I'd like to emphasize again, even if after having Q3, we see a big pressure for the eFly retail business, but I think for Miniso brand in China, we can still have a low teens growth, which is achievable. That is also our guidance for Q4, where for store expansion in overseas market, altogether, we're going to have 650 to 700 stores. So in Q4, the overseas store expansion net growth would be 200, 250 for Top Toy.
And in the previous three quarters, we have 86 new stores. For the full year, we managed to make it more than 100. Where you can see it, for domestic China, we're going to have around 400 new stores in 2024. So for the full year, we're going to have 700 overseas new stores, 100 toys, pop toys and around 400 mini store stores in China, altogether 1200 new stores. Where in China, we have on track performance of the store expansion, accelerated store growth in overseas countries.
For the profit, as I have already mentioned last year, our net profit target would be CNY2.8 billion, remain unchanged. Net profit would be highest in Q4. Where for the guidance, we also would like to keep our net profit margin between 16% to 16.5%. In 2024, according to the guidance, we believe our growth will be accelerated compared with 2024. Our direct operated business has been divided for a while.
It can help us to better control the cost and be more capable of the same store growth. Your next question is regarding U. S. And Europe, right? So Mr.
Ye will take over the floor to answer your question. Okay. What's the question about European market? You know that I heard from your presentation you hope you can have a better business environment in Europe, taking U. K.
As your base camp, right? Okay, great. I'd like to know if there's any progress there. Okay. Let's ask Mr.
Yan to talk about the U. S. Market. Well, for U. S, the Y digit growth is actually a mid single digit number, in line with our expectation.
And the channel expansion is being accelerated. Those stores are going to release greater sales potential, especially in Q4. We're going to have more store expansion in U. S. To take care of the best sales season.
Well, for this year, in U. S. Store, the OPM will continue to go up with more revenue from U. S. And we also adopted measures to improve the operational efficiency of our direct operated stores.
We will continue to improve the operating leverage, improving the profit rate. We also organized local management team control the cost on warehouse and logistics, rents and labor cost. I do believe with refined operation and the operational cost will be stabilized or even trending down. We have very strong confidence for our Q4 U. S.
Profit and the profit for 2025. Do you have any OPM target, Mr. Ye? We don't have it yet. Well, let's talk about the U.
K. For U. K, the same store performance growth was 35%. We have already been effectively supporting the distributors to adjust their product and operationals. We have already improved our internal decorations of the U.
K. Stores optimizing the consumer experience. And we also have some very popular IP product and SQL. And the APS being greatly improved and at the same time attachment rate has been further improved. That is for U.
K. Market. Next (LON:NXT) question comes from Wei Xiaobo from Citi. Please. I just have one question.
That is a question I'd like to direct to Mr. Ye. Yonghui is indeed a transaction that has been spotlighted by the whole capital market and especially there are some transactions regarding the super hyper business. And the announcement has been made for 1 to 2 months. I know you are also making research.
In your opening remarks, you already shared with us some of the strategies of your operation. Would you like to elaborate on some executables, how you're going to improve the performance of Yonghui? Is there any concrete measures you have in place? A few points I can share with you, actually four points. First of all, the both sides, Yonghui and the Minasol team, has already started to talk and engage each other.
And we also have a minisoul team to help Yonghui to further optimize their procurement cost. This is the first thing. The second thing, minisoul is supporting Yonghui to build self owned brands, improving the contribution from the self owned brands to improve the GP margin. As I mentioned, in the near future, for Super Hyper, the most important thing is to have the self developed product. For example, like Costco (NASDAQ:COST) and Sam's Club, they all have great contribution from the self made product.
So that's the reason why supporting your way of building their self brand product. The third one is to optimize the product and service of the store, improving store operational efficiency to reduce the cost. We're improving the human efficiency. After 3 months, we hope that we can improve the labor efficiency. This is indeed what we hope to make sure that each of the improvement store need to make positive profit.
If the pilot store can make a very good performance improvement, then we can ask the landlord to provide a concession on the rents. Nowadays, for the store, the highest cost is still the labor cost. So that's the reason we're going to follow the professional service to further improve the professional service efficiency. After 2 to 3 months, we can schedule more new people to new stores, improving the operational efficiency of the store by having the skilled labor force. Force point, resources concentration and also adjusting the store metrics.
Just to keep shut down those profit losing stores, we'd like to stick to the high quality development, only work on those well performed stores, keeping an eye on the primary resources, the best primary location to open stores. So for Yonghui, in the near future, all the adjusted stores need to make positive money. We don't need so many numbers of the stores. Here now for Yonghui, they have 7.90 stores. We're going to close those financially losing stores.
For those one with severe financial losses, they're going to be turned off. We're going to keep an eye on those best performing Yonghui stores. Even if we have less stores, but the performance of each store has been further improved in the near future. If we only keep 400 to 500 stores, if the efficiency has been good, then even the total output is better than the 100 low performing stores. So I think those are the 4 measures we have regarding the procurement cost, labor efficiency, the metrics of the store to further improve Zhongwei's future performance.
Mr. Ye can just summarize in this way. Both teams are already talking to each other. So financially speaking, right after the completions the transaction has been completed, we're going to see the immediate performance of Yonghui on your balance sheet, right? We have to complete the transaction then to show you the performance.
We're still in the early stage. There are some transitional arrangements. You know that especially for procurement, for brands, it takes time for both parties to talk to each other. It's still time consuming. We're still in the early stage preliminary discussions, business alignment and the communication.
We foresee in H1 of 2025, we will be able to complete this transaction. The sooner the better. Then first party will be able to have material cooperation on business. Okay, great. Thank you both.
Okay, great. Next question coming from Goldman Sachs. I have two questions to you. The first question is regarding same store performance in China. From Q4 to now, what would be the overall trend?
What about the overall trend in 2025? You mentioned the channel going to be a great driver. Last month when you have the brand strategy upgrading conference, you mentioned you're going to have the brand metrics and the store metrics. How you're going to see its future growth? The second part is regarding IP.
What is the contribution from Harry Potter IP recently? In overseas and the domestic market? What would be your key IP in next year in your pipeline? And what would be your key strategy? Thank you.
Let me help to respond the first question regarding the same store performance. I will ask Mr. Ye to respond to your second question. For same store performance, the overall trend, because we used to have a high baseline in Q3 of 2023. In 2023, in the summer holiday, there's very strong demand for travel and the popular sales of Barbie IP.
So in the 1st three quarters, indeed, same store sales has been pressured. ASP saw a slight increase, but the traffic's been reducing for 6%. Take a look at Q4 and still traffic being the key source of the pressure. According to our monitoring, our same store performance is even better than other peers in the same industry. We're looking to the future.
As I have already shared with you, in the next 5 years, our revenue growth target already built the uncertainties of the micro environment and the uncertainties of the offline retail store into our forecast. In the near future, if consumption has been trending up, we're going to be benefited from a higher growth. But even if the micro environment has not been improved a lot, our business model still be full of resilience. We still have many other drivers to grow our same store performance. We will continue to optimize our operational to further improve our target achieving performance.
First of all, we're going to have refined management on IP allocation. For this year, in the higher tier city, the same store performance is better than the lower tier cities. A big difference is because in higher tier city, the ASP made single digit number improvement compared with last year because there are more IP allocation in higher tier cities. So IP based strategy and interest based consumption be a key driver for our future performance. In the near future, we'll make IP product allocation more refined and more tagged, Pacing IP product to those stores with interest based consumption continue to improve the sales efficiency.
My second point, that is regarding the key categories we have. Especially recently, we keep an eye on the millet economy. We take ACG as a very important category to go for. We see the great momentum of ACG. By working with some very strong ACG IP in dedicated store and have the ACG in spatial areas.
For example, we have Identity 5 Halloween servers in October of this year with great positive feedback. The selling rate for Shanghai No. 1 store reached 93% in Q3 of 2024, and we have 300 new stores with ACG dedicated floor space. The sales of the ACG product increased by 50% on month quarter over quarter. And in December, we're going to have ACG dedicated space of more than 100 square meters in Quanxilou store in Chengdu, providing the large number of popular ACG IPs and the check-in installations.
Regarding the IP reserves, we have already worked with some Japanese manga IP for licensing cooperation. And in the near future, we're going to have more derivatives, merchandise by having the art commissions and also the derivative of creatives to create a differentiated product, The flagship stores and also same stores, the Swabian interest plays will also be provided to improve the interactive experience. We're also going to work with Bandai to launch more generally Japanese army peripherals and merchandise to provide a very immersive ACG experience to more users. But let me just tell you, Thailand is a key. In a frontier city representing city culture in China, we do have a seasoned IP operational team with great talents to solidify our bases there.
Same store performance always been grown by O2O contribution. We say our O2O business was still developing very fast. In Q past 3 quarters, it was growing by 80%. With our brand power continue to strengthen, we're going to reach more customers through the omni channel rather than from the offline stores for sales. That can also help us to improve the same store performance.
Mr. Yan, please help to respond to the second question regarding Harry Potter. Harry Potter co branded product is our 1st pilot to have the omni channel presence, which has already made some sales record in overseas market, very great response from the China market. But it seems that our inventory has been more efficient in overseas market. It actually helped to further improve our Q4 sales in overseas countries.
In Indonesia, and we also continue to launch the IP, Its single month sales has already more than RMB 30,850,000 by leveraging Harry Potter IP, which again take the new historical record. Harry Potter IP product sales accounted for 85% in municipal land stores for 95%. And in Hong Kong, 7 days of the high reported IP related product has already been more than HK5 million dollars A single day sales accounted for HK850 1,000. Even in 1 month, the fresh store sales is already more than HK12 million dollars Where in Malaysia, a 30 square meter flagship store, the single day sales is RMB430,000. U.
S. Is about to enter the Black Friday shopping season. We do see IP related product to register very good growth. We're going to have a more classic IP in our pipeline and ready to be launched next year. Besides Harry Potter, we also have IP resources.
We have 150 IP in our pipeline in the reserve. In the near future, you're going to see more IP product to emerge in the market. Now the corporation is still in the confidential stage. When time comes, we're going to make the announcement. Obviously speaking, for IP strategy, we work horizontally and vertically.
We leverage more IP to improve the IP co branded success. We also vertically to improve the IP operation to further brand extend the revenue. Thank you. Okay. Next question coming from UBS.
You're allowed to raise your question. Hello, Mr. Ye and Mr. Zhang. My name is Samuel Wang from UBS.
I have a question to you regarding Top Toy overseas business. 2024 is the 1st year for Top Toy to go for international expansion. You also have the Top Toy store in Thailand. And you can notice in Southeast Asia, the trendy toys being very popular. What about your operationals of Top Toy in overseas market?
What would be the future strategies you may have? That is a question regarding Top Toy. I have another question. You mentioned about the horizontal and vertical cooperation for IP. I'd like to ask a follow-up question.
In your media press, you mentioned you're going to have the plush toys and the pack product? Is there any more details you can share with us? The third question, that is O2O business. This is indeed a very popular topic in the industry. You invested a few in the O2O in Q3.
So what about the predictability of O2O? What about its future prospects? Thank you, Samuel. Let me just try to answer the first two questions. The third question will be taken by Mr.
Ye. Regarding Top Toei international expansion, first of all, maybe one point has been not mentioned in our presentation. For Top Toei, the business, the trend is looking very good. I mentioned the top line growth 43%, but it is worth mentioning it was making positive profit for 4 consecutive quarters. In the near future, Top Toi is going to take a very prudent attitude.
We're going to improve profitability, optimize product structure, improve the margin and go for international expansion. Top toy has a store in store in the Indonesia IP land. And in Singapore, we also have some dedicated shelf for Top Toy. Its first store has been opened in Thailand. In Southeast Asia market, the demographic is pretty young.
The economy is doing very well and with our increasing consumption power, all those advantage takes Top Toy as the first global expansion of having Southeast Asia market. I do believe with the Southeast Asia market further improvement, TopToe is going to register a bigger growth to lay a solid foundation for global international development. As you mentioned about the clash and also the pet product, the same as ACG, they're also going to be the key categories we keep an eye on for 2025 MINISO. And especially Top Toy have some exclusively licensed product with Sendryo. We did 2 patch of the product with very good sales result.
The third question will be responded by Mr. Yi regarding Meituan warehouse store. Meituan Warehouse Store is still in the faster development stage. It's a strategic development for our retail business. 20 fourseven warehouse store can stand make us stand out in the differentiated environment.
It's very different from the Walmart (NYSE:WMT) or from a Popol. You know that for we have more faster consumables along with 40% of the daily necessaries and other fresh fruits. Well, for Meituan, many of the stores are the white label grocery stores. The product quality has been inconsistent. So somewhat, we would like to work with Meituan Fresh Burchases as very good partners to work with to further improve the brand power.
We're going to leverage our very strong supply chain and the product power to continue to improve differentiations between the 24 superstores and the regular stores to have a very refined product allocation. We also continue to improve the transportation network, regular stores being located in the shopping malls, which are going to limit the business hours. But the superstores or the warehouse store by Meituan going to be a great complementary. So we will be able to realize the incremental growth here now Meituan warehouse store, its profitability and ROI also demonstrated our belief. And we're going to have more announcement when the business model will be more stable in the near future.
Next question. Let's welcome Yusei Yu, please. Hello. I'm Lucy from Bank of America. I have two questions to you, Ethan.
You mentioned in Q4, in China, the expected growth would be a low teens, still be accelerated compared with the mid- and the highest single digit number in Q3 of this year. Do you believe you are going to have more growth on ASP or more traffic compared with Q3 of this year? My second question is regarding 2025. You mentioned growth would be faster than 2024. Is it revenue growth or profit growth or both?
The third question, for store expansion, if we take a look at 2024, store expansion in line with expectation in China, but overseas market go beyond expectation. In the next 2 to 3 years, for that 900 to 1010 store expansion plan, are you going to have more in overseas countries, but tend to be more conservative in China? Thank you. Thank you. Thanks, Lucy.
Q4 of this year or should I say in H2 of this year, the airline retail has been greatly challenged in China. Why should I say so? The reason is because in China, the full year would be a low teens growth, high teens in H1 and in H2 of this year in Q3 and Q4. For the full year, we believe the growth would be a low teens growth. I have already mentioned, minisoul continued to upgrade our brand.
We provide such a guidance to the market, including the e commerce business. Our low teens growth include the e commerce business. In China for the full year, it's going to be a low teens growth. Where for 2025, the guidance is going to be more clear by the beginning of 2025. We're still in the budgeting stage.
But let me just tell you, we have every confidence to be so. We have many store expansion in overseas market, which lay a solid foundation for top line growth next year. Secondly, our U. S. Market is being well tracked and the expenses control also going to be more refined.
In other words, we're going to control expenses better. In 2025, no matter for top line or bottom line, we're going to have a faster growth compared with 2024. Thirdly, for store expansion. This is actually a unique point of MINISO. We have MINISO China, MINISO overseas.
We have distributor markets and self operated markets. We also have Top Toy. So every year, we can dynamically adjust our store new store allocation in different markets. Thank you. Thank you.
Thanks for Yi Sun. Next question is Shih Bin from Huatai Securities. Please. Hello. I'm Shih Di from Huatai Securities.
Thanks for giving me the chance to raise a question. I have two questions. The first question is regarding the U. S. Market.
Your self operated market was expanding very fast. In the near future, you may also have the retail partners to work with, right? Would you like to update us on on the retail partner model? What about the progress now? If in the near future, you have self operating model plus the retail partner model in U.
S, how it's going to impact your profitability in U. S? My second question, you mentioned about the middle economy was developing very fast. But I think in the market, there are also some new players who started to be very aggressive for the channel expansion, how you're going to comment on the competition landscape and the competition pressure? Thank you.
Okay. Thank you very much. First question, that is a timeline for China Retail Partners in U. S. Tiena, we don't have a timeline to share with you, but I can confirm with you for MINISO, we're still going to keep the asset light business model no matter in China or in the overseas market.
In the near future, we're going to take a very flexible store to operate our business. We can, in some direct operated market, introduce 3rd party stores to improve our leverage. But internally, we'll still review our store expansion experience to optimize our strategy in 2025. We're going to make the due announcement when time comes. Well, for media economy, it was a very popular concept recently.
But I think no matter what Minis will do, we will always be the most professional and dedicated one, especially for ACG. You have to be professional. Otherwise, you're going to end up with a high pulse of the stocks. So no matter the IP partners or the Thailand building, I do believe MINISO has already enjoyed great advantage. Well, for the more specifics, as I have already showed you, in 2025, every month we're going to launch new product.
We're going to have more elaborations next year. Thank you. Okay. Thank you. Ladies and gentlemen, here comes the end of our earnings call.
Thank you very much for your time. Let's meet next.
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