MINISO Group Holding Limited American Depositary Shares, each representing four Ordinary Shares 2026 Q2 Earnings Call

Hello, everyone. In H1, MINISO Group revenue reached RMB 11.5 billion, up 22.4%. EPS grew 8.2%, and operating cash flow rose 46%. Our global store accounted 8,674. MINISO today stands at a pivotal moment as we operate a larger and better store, building our own proprietary IP and develop our overseas organizational capacity. Opportunities and challenges coexist. I firmly believe the strategic direction and the stage-by-stage significance of those initiatives matter far than the near-term number.

I will walk you through our business performance this quarter across three segments, including MINISO China, MINISO Overseas, and TOP TOY. Official data show that China total retail sale of the consumer groups grew by 1.3% on YOY basis in H1 of this year. Against this micro backdrop, MINISO China H1 revenue grew by 26.2%, not only far outpacing broad retail sales, but also exceeding our private guidance. This was our fastest H1 growth rate in the past three years. Importantly, the quality of the growth is truly high, driven primarily by the mid and high single-digit growth number.

On the channel side, as of the end of 2022, the Q2, MINISO China store count reached 4,665, with a net addition of 97 stores in H1, among which MINISO Land format store net addition 59, flagship format store 159. Regular store record a net closure of 121. On August 22nd, MINISO Land Chengdu Eastern Suburb Memory Store officially opened, marking our 100th MINISO Land store here in China. Store count number was growing solid, but the quality is even more important. At the end of June, our China store count was up 8%, while the revenue grew by 26%, reflecting a substantial increase in per-store output and healthy growth in the overall sales per square meter. I'd like to show you three sets of the data. First of all, sale per square meter and the rent ratio varied each month.

The MINISO Land format store delivers sales per square meter roughly twice as that of the regular store. Compared with existing stores, the store newly opened in 2026 are significantly larger, yet the sales per square meter held steadily with the rent to sales ratio improved. To most, our new store format is no longer a mere tenant, but also the engine for foot traffic. Secondly, our store renovation pace continued to accelerate. We completed 189 store renovation in H1. Post-renovation store performance has been doubled YOY. Against a full-year renovation target of 355, we have every confidence to exceed it by the end of this year. Thirdly, franchise return continued to improve, whether measured by the payback period, the profit margin, or proportion of the profit store. The profitability of the MINISO Land worldwide and MINISO store nationwide in H1 reached its best level since 2019.

Franchisees are increasingly willing to open larger and better store, which is the most direct endorsement for our channel strategy. From swapping the cage to bring the better birds or large store-driven growth, our channel upgrade strategy has underway for 2 years, and remains significantly for the future. This assessment with the 2 facts. First, the proportion of the renewed store in China remain low, and second, we continue to innovate on the store format. This year, we introduced a new member to our store matrix that is Super MINISO, the most important innovation of 2026. Looking back to the evolution of our channel upgrades over the past 2 years, in 2024, MINISO Land validated the IP immersive flagship store. In 2025, MINISO FRIENDS entered into mid and high-end shopping districts in the affordable luxury tiering.

In 2026, Super MINISO brought the IP experience to the broader mass consumer base. Its product matrix was 50% IP merchandise plus 50 general lifestyle products. Since its launch, it has become one of the most popular store formats among the consumers. The clever aspects of our Super MINISO is not overturn the consumer existing brand perception, rather is build upon them and retain consumers familiarity with MINISO. Value for money merchandise, we're injecting freshness and the trait-driven experience through IP. Other formats like MINISO FRIENDS, MINISO Land, and MINISO Space progressively deepen the IP merchandise and might share, helping consumer move from lifestyle general merchandise to IP wonderland as part of the brand upgrade. But I'd like to say the success of the large store is not merely channel innovation, it's a systematic innovation by having content plus space and operation. The store is a space.

IP is a soul to fill it. The momentum of the larger store and value of the IP reinforce each other, forming an ever-accelerating flywheel. In June last year, we launched YOYO, our first proprietary IP. Within just one year, YOYO has entered into 53 countries worldwide, generating nearly RMB 500 million in related revenue in H1. The most iconic milestone was YOYO plus Disney Toy Story 5 collection. YOYO version of Woody, Buzz Lightyear, and the Slinky Dog sold strongly across stores in multiple countries. In just one year, YOYO success has propelled its validated proprietary IP to a new stage where it can engage top-tier global IP as an equal. Beyond the MINISO flagship store and brand, the TOP TOY has also built its own IP metrics. Its flagship IP, NOMI, has surpassed RMB 300 million in cumulative GMV.

And you can see that while YuY validated the methodology within our flagship brands, NOMI, YOYO, and DUIDUI has proven different style under the TOP TOY brand. Around proprietary IP, we have accumulated a full-chain SOP, standing artist, signing product definition, design to development, supply chain scheduling, all the way to the pre-launch standing default channel, in-store events, and fan operation. Our group-wide target of RMB 1 billion in proprietary IP sales, set at the beginning of this year, was achieved ahead of the schedule by the end of July. This all proven our multi-IP, multi-category globalization strategy is successful. They fully demonstrate MINISO's unique resources endorsement in building proprietary IP. We have the full category coverage, all channel penetration, global footprint, and full chain operation. Looking across the globe, MINISO only imposes the greatest flexibilities and expandabilities in product categories.

The strongest control and innovation capacity in channel, the boldest and the highest quality global store network in terms of the footprint. On the operation front, MINISO leverages full chain advantage from signing scientists to design to development to marketing and selling product. We deeply empower artists at every stage, maximize the potential of each IP. Those are precisely MINISO's highly differentiated and scarce resources, and they are also the key to MINISO's leap forward development and overtaking the proprietary IP. There are four fulls enable us to complete the entire process from IP concept to shelf more efficiently than the vast majority of the companies. Everyone, YuY is just the beginning. On August 22nd, we newly launched artist IP, Chou Chou, sold out entirely on its debut day, far exceeding expectation. We have already signed multiple designer toys.

You can see on the evening of 26th, 5,000 sets of Chou Chou was sold live within one second. At the same time, we have already signed multiple designer toy artists, recruiting top creative talents worldwide through our IP Protégé program. Our ambition is going forward, leading 100 Chinese IP onto the global stage. At the moment, global IP market is entering into unprecedented boom. The rise of the great nation is inevitably accompanied by the birth of the culture symbol and their global accident. MINISO, we are backed by our world-leading channel, product, and IP operation to secure our top position in this historic moment. Our vision is to become the world's leading IP operating platform.

Measured by channel scale, we are already the world's largest retailer of the IP products, and our proprietary IP business is building a new growth engine that is at once distinctive, explosive, and replicable. Our strategic pivot towards proprietary IP is a long-term choice grounded in the trend of our era, where we will sustain long-term investment. Even in the short term, the proprietary IP product line has delivered excellent report card. We not only have YuY proven to be success, same as Chou Chou, our second IP. In its H1, profit margin was above company average. Inventory turnover was kept within 30-40 days. Proprietary IP strategy has placed no pressure on overall profitability, laying a solid foundation to continue our IP ecosystem. Coming next, I am going to talk about membership strategy. Last year, I said membership would become another important engine for MINISO growth.

The value of the strategic membership is steadily materialized. Member scale and contribution continue to reach new level. In H1, our China membership grew by 31%, reaching 130 million, the all-time high. Member contribution sales rose to 57% in the same period of last year to 60% for the full year last year and 33% in Q1 and further 77% now, where at the same time membership is the latest evidence of MINISO's growth shifting from the opportunity-driven to the system-driven. The value of the membership manifested in two sell sides. The core engine of the lifting average transaction value. Average transaction value rose by 5%. Working with global IP, for example, like Sanrio, Disney, and Harry Potter, as well as Chiikawa, combined with the blockbuster effect of our proprietary IP, large store has become the core stronghold of the high-value members.