Hello everyone. Welcome to MINISO March Quarter 2026 Earnings Call.

In March quarter, the revenue reached close to RMB 5.7 billion, grew by 28.5%, exceeding the high end of our previous guidance. Adjusted net profit, excluding forex gain and loss, comes at RMB 630 million, grew by 8%.

Operating cash flow grew by 40%. Free cash flow was up by 36%.

I'm not going to read through the financial items 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 the US. Thirdly, my view on H2 of this year.

Let me just start with strategic execution. Last year, I introduced store upgrade strategy.

We are right on that. MINISO brand store number grew by 380 in China, less than 10% growth, but offline store GMV grew by 25%.

The two data tell the story best. The share of the profit franchisee this quarter reached the highest level in recent quarters.

Franchisees are putting their own money on the line, their P&L is the 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 new store applications, half of that requesting for large-format or flagship stores. In the past, we had to convince franchisees to open large stores.

Today, they are competing for this chance. Such shift is the market's most direct vote for the confidence in our large store format.

On April 18, MINISO SPACE and MINISO LAND opened simultaneously at 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 move in speak for the brand equity. Most importantly, we bring something that people won't be able to take: an immersive IP-driven experience, add pop culture to duty-free malls, and translate into increment foot traffic and time for venue.

The real barrier for running large store isn't capital; it is content density. In a 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: licensing right of 150 global IPs, a network of 2,000 global suppliers, and a supply chain that fast enough to refresh assortment every week. These are the three that can really make us stand out.

While at the same time, we're systematically closing underperforming stores, those opened for many years with under 200 square meters. While at the same time, we upgrade our franchisee base, removing weaker partners to bring new, strong ones.

This is what our store and channel upgrade strategy is really about. Many people want to know how we have our IP strategy done.

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

This isn't classroom-style training. We use our MINISO LAND store as a live training ground, breaking down operation in real store environments.

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 your staff just follow it mechanically, the result won't be good. Only when people genuinely understand why IP resonates consumer most, that can help our right-half strategy.

This can turn IP operation from a headquarters drawing into a muscle memory across our entire network. On April 8, we concluded our overseas trade fair.

The star of this event was DUDU, a proprietary IP that we built from scratch in-house. 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 is the most honest vote of the confidence to our IP and our product. That's more telling than any market result.

DUDU surpassed RMB 100 million in sales within six months of launch. In April, it appeared on Met Gala, the so-called 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 the event. This is not marketing.

DUDU earned its place in the global fashion spotlight on its own merits. From CCTV's Spring Gala to Paris Fashion Week to Met Gala in New York, DUDU covered the ground in six months that many IPs won't be able to make in 10 years.

It's a full stack of the IP capacity, from incubation to design to operation and global rollout. DUDU's success is not a coincidence; it's a signal that proprietary IP strategy is going to get into the harvest stage.

In Q1 of this year, total overall revenue of MINISO Group exceeded 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 last investment with. It won't immediately show up in financials, but it buy our long-term development.

We have advanced a few things. Standardization: the headquarters has developed the operation and merchandising manuals, delivering video case study and on-site training to ensure a consistent understanding and execution across markets.

Each market also set up regional management training with regular sessions for store managers and supervisors. Secondly, we build benchmark and rapid replication.

When pilot projects is selected, once it proves success, we roll out them quickly to other markets. Thirdly, a mentorship model, pairing experienced operator who delivered results with newcomers, and continue to have the 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 store we have, the greater the compounding effect might be. Deep organizational capacity along with IP-driven product, those two things give us strong confidence for our long-term overseas growth.

Indonesia and the US are the two markets many of you are focused on. Let me give you an update on both.

Indonesia has been one of the markets we most proud of in our international journey, and it has to remain so going forward. Winning in Indonesia isn't about market; it's young demographic and vibrant consumer environment in the market we're going to have a long investment.

It also made a demonstration effect for confidence of our global team. We must make it right.

However, the business reached certain scale, hitting some bumps is entirely normal. The most difficult time is already gone.

We have already have a clear path forward. On channel, headquarters has set up dedicated negotiation team to proactively pursue prime location and select relocate stores.

On assortment, we have the one-size-fits-all approach scored on segmented. On the product operation, headquarters is providing direct support to strengthen local IP execution and tailored merchandising plan.

On the organizational side, we clearly defined responsibility: headquarters leads strategic development, while local team focusing on daily operation. 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 piece. We noticed Indonesia consumers show a clear spike in store visit at the end of each month, which coincide with the local payday cycle.

We made a payday week membership benefits program. The result was clear: membership participants was 80.5 percentage higher than during the normal member days.

The repeat purchase rate and frequency are all improved. During the Ramadan, we saw participation climbed even further, which tell us this has become a real habit for the consumer.

For the full year, Indonesia delivered a solid profit contribution. I believe with our adjustment took effect, profitability in this year would be much better than last year.

More importantly, when membership and repeat purchase become the primary engine for growth, and the growth would be even higher. I'm 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 update.

Today, I'd like to address two questions, including tariff and consumer behavior under inflationary pressure. I believe those are opportunities for MINISO.

Our price point gives us the structured advantages. Our core price range in US was around $5 to $25.

In that range, what drives purchase, emotional connection is IP: "I love this, I buy it." While at the same time, $5 to $25 is quite alluring.

While at the same time, a 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 has been 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 SOAR program, which can help to improve our supply capacity.

Thirdly, our goal can really 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. While at the same time, the stable cash flow and scale economy can also give us a confidence and resources to invest in the US.

The global complementary framework is not there for our competitors. Thirdly, tariffs and inflation are cyclical and short-term variable.

They come and they go. While consumer demand over emotional IP experience is structural.

It doesn't appear with macro volatility. For strong companies, cyclical pressure is also the growth opportunity.

It's going to accelerate industry shakeout and let truly differentiated brands stand out. In US, we are that differentiated brand.

Let me just turn to TOP TOY now. In first quarter 2026, TOP TOY revenue grew by 51%.

Net store grew by 21, reaching 355: 316 in China and 39 overseas. In Q1 of this year, we launched the new proprietary IP Xiao Yu, DUDU, and Baorongrong along with proprietary IP-themed stores.

Together with Nommi, TOP TOY portfolio of proprietary IP stand out. The portfolio products become more mature.

Our proprietary IP has been validated by the market. By the end of this month, we announced Zhao Lusi as TOP TOY's Global Brand Ambassador.

Her influence and recognition among young consumer will help us to accelerate and reach more young consumer. Coming next, let me just walk you through my H2 outlook.

There are four drivers. Membership is the most important lever for our same-store sales growth.

The data tells a clear story: for full year 2026, members contributed 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 see that consumer accounted for 79% of the total sales for us, a two highlight: first of all, contribution from repeated purchase continue to grow.

In Q1 of this year, repeat purchase 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 those 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 SSSG expansion in H2. Secondly, benefit of our channel upgrade only started to come through.

For the full year, we plan to open close to 500 large-format stores, with MINISO LAND and flagship store making up increasing share. Thirdly, North America and Europe set to enter into harvest space in H2.

The new store we opened in US and Canada was of high quality. Those cohorts will reach maturity and deliver high-quality same-store sales growth and margin improvement.

Fourthly, 2026 is a year with highest density of IP. As we move into summer peak season, we have a very strong pipeline of major IP collection launched, lined up.

Finally, well, we did see some return this quarter from our earlier investment in the AI space. I firmly believe that bigger prize lies in the efficiency gain AI can bring to our core business.

Strong management capacity get amplified by AI. The technology dividend from AI will flow first to organizations that already have high execution discipline and a very strong learning capacity.

I surely 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 spans more than 100 markets and regions.

For an organization like us, the drive for efficiency is our DNA. On the product development side, AI supporting the trend forecasting and assortment decision.

On marketing, AI can improve our efficiency in content production and customer stratification. On operation side, our smart floor system are helping us managing foot traffic by time and day.

We approach change with a sense of humility. We see AI as an amplifier, amplifying the supply chain advantage, product development speed, and operational precision that MINISO already has.

Recently, we also would like to leverage AI to forecast the product need. In that way, we will be able to improve the customer loyalty.

Those are the prepared remarks I have for you. Now I'm going to welcome Eason to walk you through the financials.

Thank you.

Thanks to Jack. Welcome everyone to today's call.

Please allow me to walk you through our financial result of this quarter. Unless otherwise noted, all figures are in RMB.

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 earnings call.

We delivered on every metrics we guided for this quarter. Revenue: group revenue was grew by 28.5%, which is higher than 25% we made for the previous call.

I will breakdown the growth driver 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, while North America delivered mid-double-digit same-store growth.

The two strategic priority market maintained a very strong momentum we saw 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 positive same-store sales growth in Q1.

The trend would be continued in Q2. Let's also take a look at the top line.

In Q1 of 2026, group GMV reached 10.1 billion, grew by 26%. Total revenue grew by 28.5%, reaching RMB 5.7 billion.

Let's breakdown by brand. 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.

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 1.94 billion, grew by 22%.

TOP TOY revenue was 510 million, grew by 51.4%, continuing a very strong growth trajectory. Let's take a look at same-store sales.

In Q1 of this year, mainland China delivered strong same-store sales growth with high-single-digit growth number. MINISO overseas, including the third-party distributor, also delivered solid low-single-digit growth.

Looking ahead, we will continue to strengthen our same-store across three dimensions: people, product, and stores. People: we leverage in-store traffic data to capture peak hours, regularly run in-store engagement activities, capitalizing on gift occasions like Mother's Day, 520, and Children's Day, and the Dragon Boat Festival to drive traffic through online-to-offline activation.

On the other side, we use internal mechanism such as inter-store competitions for the best-in-class mentoring to continue to improve our operation capacity. While at the same time, as Jack here has already mentioned, the value of our domestic membership system continue 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 purchasement.

In the near future, we will leverage AI capacity plus membership data to make sure we continue to have the demand forecast, precision targeting, and channel iteration continue to rise the same-store growth number. Second, let me talk about the product.

We continue to align tightly with seasonal and holiday consumption trends, use hero SKUs to drive a structural upgrade in the per-store sales mix. In H1 of this year, our IP collaboration has broke through across diversified categories, covering high-value IP for K-pop superstar Jennie, the streetwear brand [Flod?]

, and classic lifestyle aesthetic Laura Ashley. This fully validates the connectivities of our global IP platform.

In H2 of this year, we're going to heavily launch the World Cup collections, Chiikawa plus Sanrio collaborations, and the Toy Story movie. The hero IP will help to drive the high attachment rate.

Thirdly, on store: we continue to upgrade 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 effectiveness of the modal 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 8,210 stores worldwide, a net increase of 722 stores.

MINISO China store number grew by 380, while overseas, we net add 404 stores, reaching 3,670 stores by the quarter end. TOP TOY have 875 stores, with 355 stores by the quarter end, 39 are located outside China.

In Q1 of this year, we opened high-quality theme park, for example MINISO LAND and MINISO SPACE in Sanya CDF mall, MINISO LAND in Grandview Mall in Guangzhou, MINISO LAND in Dongguan and Shenzhen, as well as MINISO FRIENDS in IAPM in Shanghai. By the end of this quarter, the SPACE, LAND, FRIENDS store 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, themed park stores, flagship ones, and large store ones accounted for 12% of the total store count, contributed 30% of the sales.

We expected rollout more better themed park stores by the end of this year and delivery a joyful and unique shopping experience to our user. Let's talk about GP margin.

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 represent a small share of the total group revenue.

Secondly, the return of the value-for-money assortments in China, disciplined pricing has translated into higher volume. Thirdly, an increasing mix from our new domestic product 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 point. G&A expenses grew by 17.4%, slower than the revenue growth, representing a 4.7% of the revenue, a decline of 0.4 percentage point.

The growth of the selling expense was primarily driven by investment in operating store, licensing fees, and advertising and promotion activities. In Q1, the revenue from direct operated stores grew by 50% YoY, while related expense grew by 35%, demonstrating an ongoing optimization in our DTC store level economics.

Direct store-related investment include staffing, rent-related expenses, depreciation, and amortization. Secondly, advertising and promotional expenses grew by 74%, accounted for 3% of the revenue.

That was mainly because of the brand upgrade initiative 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. Fourthly, licensing fee grew by 42% in this quarter in line with our strategic investment in IP development, stably representing 2.4% to 2.6% of the revenue.

The growth of the G&A expense was primarily due to higher staffing cost, aligned with our business expansion. G&A grow slower than revenue.

Let's also take a look at other net gains. As being talked with many of you for the previous quarter call, in Q1, we recorded a large investment gain with other net income related to our direct investment in an AI company.

Following that company's recent IPO and meaningful share price appreciation, we recorded RMB 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 profit and the core operating business, it's been excluded from adjusted operating profit and adjusted net profit.

In addition, the line item also include net foreign exchange gains and losses. With forex volatilities in Q1, we record a net forex loss of more than 80 million in this quarter, 80 million in this quarter, which going to impact our margin by 1.5%.

Generally speaking, our forex exposure may coming from the holding foreign currency dominated assets, for example cash, 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 operation performance of our core business. As the share of our DTC business continue to grow, the impact of the forex will also increase.

The guidance we're going to provide you will exclude forex impact. For non-IFRS, there will be some item 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 84 million because of the TOP TOY.

The second one is gain from the indirect investment in an AI company. This is actually a non-IFRS with an investment of 870 million, represent unrealized and marked-to-market gains arising from the change in the fair value.

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 fees, it won't occur this quarter.

In Q1, the interest expense on convertible notes was 50.4 million, of which 45.7 million are non-cash. The actual cash interest paid by the company for these convertible notes 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 truly good.

The net profit was 290 million as we hold a 29.4% of the equity stake in YH. Then we recognize approximately 77 million in income from YH in Q1.

We also have the change in carrying value of the redemption liabilities arising from the preferred shares. All those items would be excluded from adjusted net profit.

Effective tax rate was 24.9%, which was 20% last year. Let's take a look at profitability.

I was talking about adjusted operating profit. Adjusted operating profit, excluding the net forex loss, grew 40.3%, reaching 840 million in this quarter.

The adjusted operating margin, excluding the net forex loss, was 14.7% compared with 16.6% in the same period of last year. Let me just work you through the gap.

Gross margin decline by 0.9% YoY. The total operating expense, excluding SBC, grew by 1.2 percentage YoY.

The above partially offsetted by other items, resulting in a total impact of 1.8 percentage point on the adjusted operating margin. It's been declined from 16.6% to 14.7%.

As you can see that for this quarter, the increase in our overall expense ratio was decreased significantly compared with the previous quarters. For the full year, we aim to well control the expense ratio 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. In H2 of this year, as the peak sales season of the overseas market continue to approach, we're going to honor our commitment for this call.

Regarding working capital, by the end of Q1 of 2026, inventory turnover was 101, compared with 102 days in the same period of last year. MINISO China mainland inventory turnover was 67, compared with 83 last year.

MINISO overseas inventory was 254, that was 208 last year. The increase of the overseas inventory was primarily driven to the inventory build-up ahead of the store opening.

The second one is due to the logistics unstabilities. In some strategic market, we have a more flexible supply chain management strategies, increase the safety stock in overseas market.

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.

By the end of this quarter, our cash position stood at 7.05 billion, remaining healthy. In April and May of this year, we distributed dividends over USD 160 million, bringing our accumulated shareholder return to 6.23 billion RMB.

We believe our share price is currently significantly below its intrinsic value. Jack has already announced by the end of April he intended to increase his shareholding.

The company also plan to conduct share buybacks based upon the market condition. Going forward, we will continue to maintain disciplined cost control and prudent budget management while balancing the growth within with a delivery stable and predictable returns to the shareholders.

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.

We expect for the full year of 2026, the revenue going to have a high double-digit growth. Three-year compound growth rate would be no less than 22%.

Full-year net store addition would be 450 to 500. Jack has already mentioned, we're going to pay more attention to the quality of the development.

450 to 500 net store increase would be adjusted as we continue to balance the quality of the store. However, overall speaking, and we're still 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 forex gains and losses, we expect adjusted net profit growth to accelerate compared with 2025 on full-year basis.

While the overseas macro environment present significant challenges, our expectation for the first half operating results remain unchanged, and we believe the revenue will grow by 20% to 22%. Net store addition would 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.

That's concluded my prepared remarks. I'm happy to take your questions.

Thank you.

Hello Jack and Eason. Thanks for giving me the chance to raise a question.

Congratulations for the company of having a good performance despite the challenges. My question was regarding overseas market.

They're being touched upon by Jack Ye. However, you see the crude oil price have risen and stay elevated.

Could the management team share with us what is the demand from the key overseas market? What would be the distributor order pricing, cost pass-through, 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 quarter, there are some key upside and downside risks, which are the market and the factors that you are most associated with?

Are there any market who is going to have a huge fluctuation and what are the market you are confident on? Thank you.

Thank you very much. A very good question.

Let me help to address this question. On product mix: we're systematically lifting out the share of the high-margin categories.

Proprietary IP products and IP collaboration limited edition are key focus. We also started to pursue narrowing but deeper strategy, concentrating on the true hero product and proactively on the tailored and SKUs, fewer categories, but a greater operating depth and efficiency in each.

This is, in itself, the most direct way to hedge against cost pressure. On the supply chain, we have extended the raw material stocking circle from the key SKU from 2 months to 3 to 4 months, locking the cost ahead of the time.

End-to-end stocking price is still stable, give us sufficient buffer. For US market, over the past two weeks, we started the differentiated price test, taking price stress on high-frequency, high-velocity items, for example like bottled water and T-shirts.

On the data now, we see May gross margin already improved compared with April. The price increase rollout further, and we believe the 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 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 size if the consumer sentiment is certain continue to weaken. Overall speaking, we're still very proactive for cost management.

Thank you very much. Thanks for Jack.

Thank you. Thanks for Jack Ye, and thanks for Eason, and thanks for Christina.

I have a question regarding your Indonesia and Mexico market. I heard a few remarks from Jack Ye regarding the Indonesia market outlook, but let me just ask you a follow-up question.

What are the same-store sales and the overall sales trends in Indonesia and Mexico over the past two months in April and May? What is your strategy for both market, especially Mexico?

How should you comment on the sales and profit growth outlook for both market in 2026? 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 turn positive. Latin America are also delivery 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 300 square meters. This year, we're going to rollout LAND store.

Large store not only means a larger square footage, it represent comprehensive upgrade on IP density and dwell time to improve the higher ticket size and repeat purchase. Our large store practice in China is truly validated.

We're going to have it in Mexico now. Looking to the full year, Mexico, the same-store sales should maintain positive.

New store benefit of the channel upgrade would be visible in H2. Latin America has a 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. Because for Mexico, we're going to have large stores starting from H2 of this year.

We really look forward to its performance. Thank you.

Thank you. Thanks for Christina.

I have a question regarding the mainland China market. As you can see that generally speaking, social retail data is not looking right.

However, as I was talking to the expert, we found out MINISO store, 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 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 were provided to our franchisees? Any strategies you have on the China market would happy to hear.

Thank you very much. Let's talk about renovation progress.

We renovated around 80 stores this quarter with clear result. Average daily sales increased by 50% post renovation, validating the effectiveness of our store upgrade strategy.

For 2026, we plan to renovate more than 300 stores, and we need to do it in a fast-paced and proactive intervention way, in other words, open big, close small, open good, and close weak, and transforming those aging, undersized stores into new store formats. We place strong emphasis on evaluating the visual identities, standard display, IP experience mix, and to have a efficient renovation strategy.

Let's also talk about franchisee profitability and paybacks. From Q1 2025 to Q1 2026, the share of the profit franchisee store continued to go up.

The GP margin continued to expand. On payback period, large store are meaningfully higher than the store-level profitability.

For some of the best performing theme park store can even achieve a payback within six months, compared with around 18 months for the standardized stores. In 2026, we continue to reinforce the franchisees their understanding over the large stores.

We received some positive feedback from many of our large store franchisees. Roughly 50% of the new store applications received by the headquarters are for large store format.

The feedback indicate franchisees are increasingly willing to invest in large store renovation. It also reinforce the importance of our strategic shift towards improving per-store quality.

Thank you.

Hi Jack and Eason. I have a question regarding mainland China business.

As we can see, in April and May, the macro 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?

What trend are you observing across different city tiers and consumer cohorts?

Same-store average daily order volume and average ticket size are both going up. The ticket size is approaching RMB 40.

There's one driver that 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 industrial cycle. The data tell us very clearly: members spend are 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. For the past few months, our member GMV share increased from 60% to more than 70%, driven primarily by new consumer acquisition.

In H1 of this year, we'd like to work on the member acquisition. In H2, we will focus on repeated purchase.

When the two are combining together, it can help to complete a membership growth flywheel. Taking a look at the city tiers, we observe some positive trend.

Consumption potential being unlocked for all tiers. Same-store sales are all positive for all city levels.

Provincial capitals are driven by large store 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 rollout the trendy toys to the countryside strategy, bringing MINISO IP product and the theme park experience to county-level market, and which can help us to have the same-store sales in county level reach double-digit number.

This tells us emotional demand for IP and trendy toys cover much broader audience. Young people in county, they also have the same demand.

They simply don't have the shelf and adequate supply before. This can also see MINISO brand has already covered different consumer cohorts.

The depth of the China market is far greater than what has been generally appreciated by the market.

Hello, can everybody hear me?

Yes, great. Loud and clear.

Thank you.

I'm Shi Di 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 base rising and subsequent quarter performance? What strategies and tactics are in place for sustain the same-store growth?

You're right. The baseline is indeed rising, but we have a clear and systematic strategy in place.

Let me just share with you a few data. During the May Labor Festival, domestic sales grew 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 holidays earlier this year. We see some third-party data show us foot traffic was under pressure during the May Day May Labor holiday, but our store, the entry level improved by 4.1 percentage.

Average per-store traffic also grew, means we drove traffic against the headwinds. By categories, toys, digital accessories, and travel categories deliver 25% growth, which is hard-earned result.

For sustaining same-store growth, we have the following strategy: for IP collaboration, we continue to deliver differentiated and high-frequency launches, for example with secure 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 520 I Love You Day. We have already built dedicated assortment and event plan according the gifting data to improve the average ticket size.

For operating, we also rollout the foot traffic contest at the store and to further empower our store. The supply chain also continued to improve.

Even during the May Day holiday, we can unlock the sales window. Even if the baseline is going up, we have a diversified toolkit, and we are confident in continue to deliver strong same-store performance.

Thank you.

Yes. Christina, thank you.

I have to say sorry, there might be some technical issue with my line. Jack, Eason, good afternoon.

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 lower-tier cities.

The design's been quite interesting. Is it possible for you to share with us your proprietary IP, for example DUDU, as well as pipelines and tomorrow?

Thank you. A very good question.

Let me elaborate on that. Third-party licensed IP and proprietary IP seems selling the same product, but the logic would be different.

Let's talk about GP margin. Proprietary IP product have a high margin compared with licensed IP, but the underlying logic matter the most.

Proprietary IP is most exclusive and absolutely differentiated. 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 sits fully in our hands. It also provides long-term high-margin moat.

However, you need to think about how to diversify the monetization model. A mature proprietary IP isn't sell product; you can sub-license it to the third party, you operate across multiple formats, and it can also drive content production and upgrading the IP capacity.

Those are all extreme high-margin business model that compound over time. DUDU appearance on the Met Gala and entry into Fashion Week reflect build-up of the brand value rather than sell product only.

While building our proprietary IP, we're building a business model on an entirely differentiated scale. That is most important upgrade for MINISO long-term profit structure.

Thank you.

Thank you. Thanks for the management team.

I'm Ting Yang from Changjiang Securities. I have a question regarding the Europe business.

It seems the business growth in Europe is quite fast, and they 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 plan? 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 store?

Thank you.

Europe has delivered continued positive same-store sales growth this year, with a leading category being trendy toys categories, for example like the vinyl plush and blind box. This is also the reason for us to go for international expansion.

We're not bringing in product others already selling, we're rather bringing the consumption scenario of IP trendy toys, open new demand. Channel upgrades are progressing in parallel.

The LAND store will roll out in H1 of this year. Regarding the profitability, Poland and Germany are strong proof points.

Both directly operated stores have outperform expectation, and the store level and market level operating margin reach double digit. The Germany overall operating margin across more than 10 stores has already stabilized with double digit.

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 DTC is clear.

Germany has already achieved that. Other market will follow up.

Europe is a market worth of long-term cultivation. We have the patience, and we have a clear path with it.

Thank you.

Thank you. Jack, Eason, and Christina, thanks for giving me the chance.

I have a question regarding US. It seems that you operate 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 results? You can see that what would be the purchase frequency of your US members?

Is it improved as you rollout large stores?

Thank you, Miss Wu. As I was emphasizing again and again, that is what we're doing now.

For the past two to three years, MINISO continue to build up our non-US consumer goods, the largest DTC network in the local area. Starting from January of 2024, we started to explore the large store.

Before that, you see that we entered into US market in 2017. By then, majority of our store are located in US shopping malls.

From January of 2024, we started to have our Garden Grove stores being opened, and we started to build our understanding over bazaar. By beginning of this year, Jack Ye went to US to tour around our stores.

We found out our bazaar store has already moved into a 2.0 version time. What does 2.0 version means?

Our 2.0 version store is not picky about the business district at all. You can see that for our good and large bazaar stores, even in an average business district, its store sales and efficiency per square meter is still be looking right.

Compared with a 1.0 version bazaar store, the 2.0 version are actually showing better profitabilities. We have already provided you a single-store payback model in the US.

Generally speaking, for a single store, the payback takes around one year in the US. For the 2.0 version store, the payback period has been controlled within one year.

For MINISO, we are committed for the long-term business, and we stick to the long-term investment. For the 2.0 version store, and it provide above-expectation same-store performance, and it is 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. 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 one year, the sales growth from our US members has been quite significant.

China started to do membership in 2018, and in 2021, the memberships sales exceed half of our total business. We made five years of making the membership spending accounted for half of our revenue, while in the US, we only spend one year to make that happen.

You can also see the repeat purchasement rate of the US consumer 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.