Q1: How is MINISO's domestic same-store sales performance improving? What are the key drivers?

A:
- Domestic same-store sales declined by mid-single digits in Q1, a significant improvement from Q3 and Q4 last year.
- As of the latest data, the decline has narrowed to low single digits.
- The company is confident in achieving positive same-store growth for the full year 2024 in China.
- By region, Eastern and Southern China, where tier-1 and tier-2 cities are concentrated, have seen better same-store sales improvement. Some regions like Northern and Northeastern China still face some pressure.
- Customer traffic declined by low to mid-single digits in Q1, while average ticket size remained flat year-over-year.

Q2: What is the current situation with MINISO's franchisees in China?

A:
- Franchisees' return on investment has improved significantly since the beginning of 2025, in line with same-store sales recovery trends.
- Most of the newly opened TOP TOY stores and flagship stores are operated by franchisees, indicating their confidence in the brand.
- The majority of IP flagship stores and flagship stores currently under preparation are also franchisee-operated.

Q3: Has there been any change to MINISO's store opening guidance for China this year?

A:
- The company is focusing on store network optimization rather than pursuing aggressive expansion.
- MINISO remains confident in achieving double-digit growth in China this year, even with potential adjustments to the store network.
- The focus is on opening larger, higher-quality stores while closing smaller, underperforming ones.

Q4: How is MINISO preparing for potential changes in US-China tariffs?

A:
- MINISO has increased inventory levels in the US to support 3-6 months of sales, providing a buffer against potential tariff changes.
- The company is actively diversifying its supply chain beyond China, aiming to become a global supply chain integrator rather than solely relying on Chinese exports.
- Local sourcing in the US has increased, now accounting for nearly 40% of products sold there.
- MINISO plans to flexibly adjust procurement sources in 2025 based on the situation.
- The company is also implementing tax planning strategies to reasonably reduce tariff impacts.

Q5: What is the outlook for Yihai's integration and its impact on MINISO's financials?

A:
- Yihai's results will start to be consolidated into MINISO's financials from Q2 2025.
- The goal for Yihai in 2025 is to significantly reduce losses.
- Key initiatives include improving per-employee efficiency, increasing sales, enhancing gross margins, and reducing costs and expenses.
- As of May 19th, 78 Yihai stores have been renovated, with plans to close 250-350 stores and renovate over 100 stores this year.
- The first 40 renovated stores (operating for over 3 months) have already generated over 100 million RMB in profits from January to May.

Q6: How is MINISO's overseas business performing, especially in the US market?

A:
- Overseas same-store sales in Q1 were similar to domestic performance, but with a higher base (21% growth in Q1 2024).
- Major markets like Mexico and the US have shown signs of improvement since April.
- The company remains confident in overseas same-store sales growth.
- In the US, MINISO is focusing on cluster-style store openings in 24 states that account for 76% of the US population to achieve economies of scale.
- Product development is being tailored to US market needs, with efforts to create regular bestsellers and optimize the supply chain.

Q7: How is MINISO approaching its IP strategy given increased competition?

A:
- Top-tier global IP licensing resources remain relatively scarce. MINISO's growing market scale allows for better resource allocation and exclusive category authorizations.
- Product design and quality are crucial factors in determining consumer purchases. MINISO believes it has a core competency in IP conversion, built on years of experience and a global store network.
- The company is also developing its own IPs. A recently launched IP, Jidemeng Bear, is expected to generate 400-500 million RMB in sales this year.

Q8: How is MINISO balancing the introduction of third-party products with maintaining profit margins?

A:
- The gross margin for MINISO's China business remained stable in Q1 compared to the same period last year, despite the introduction of some third-party products.
- Third-party products are being introduced in specific categories to drive customer traffic and same-store sales growth.
- The company carefully balances the mix of third-party products to maintain overall profit margins while benefiting from increased customer traffic and sales.

Disclaimer: This earnings call summary is generated by AI and is for informational purposes only. Due to technical limitations, inaccuracies may exist. It does not constitute investment advice or commitments.