MINISO Group - Q4 2023

Transcript

Operator (participant)

Hong Kong Stock Exchange. In addition, we have prepared a PowerPoint presentation for today's call, which contains financial and operational information for this quarter and fiscal year. If you are using Zoom Meetings, you should be seeing it right now. You can also revisit it on our IR website later. Now, I would like to hand the conference over to Mr. Ye, and Mr. Zhang will translate for Mr. Ye. Please go ahead, sir.

Guofu Ye (Founder and CEO)

[Fl]

Hello, everyone, and welcome to our earnings conference call.

Our overall performance once again reached new heights as we achieved big breakthroughs in both revenue and profitability. Total revenues exceeded the RMB 3 billion milestone for the first time, increasing by 40% year-over-year to RMB 3.25 billion. GP margin reached 69.8%, an increase of 6.5 percentage points year-over-year. Adjust net profits surpassed RMB 570 million, increasing by 156%. Adjust net margin also hit a new high, reaching 17.6%, an increase of 8 percentage points year-over-year. I'll now walk you through business updates for our three major segments: MINISO China, MINISO Overseas, and TOP TOY.

[Fl]

Speaker 9

MINISO China showed resilience despite the challenging consumption environment.

Offline sales of MINISO China achieved 40% year-over-year growth in this quarter. Whereas according to the National Bureau of Statistics of China, domestic retail sales increased by only 10%.

Average transaction volume increased by 18%, while average transaction value increased by more than 5% year-over-year.

Guofu Ye (Founder and CEO)

[Fl]

Speaker 9

Entering July, nearly one third of Miniso stores in China achieved new sales records, marking a strong start to the September quarter.

Guofu Ye (Founder and CEO)

GMV increased by over 25% year-over-year, with GMV per store increasing by 14%. Average transaction volume and average transaction value increased by 10% and 3% respectively. For the first seven months of 2023, GMV per store in China recovered to 2021 level and around 85% of pre-COVID level in the same period of 2019, in line with our expectations at the beginning of the year.

[Fl]

Speaker 9

...

[Fl]

Eason Zhang (CFO and VP)

What these good signs in store opening and closing reflect is the high confidence of our retail partners.

As of June, MINISO brand had over 1,000 MINISO retail partners, with nearly 50% of stores owned by top 50 franchisees. Among them, 40 have been cooperating with us for more than 6 years. In the past 4 fiscal years, about 50% of new stores in China are owned by our top 50 partners. The average number of stores owned by them increased steadily from 27 to 33. We have been recruiting new partners as our store network penetrates into larger cities. The total number of retail partners increased from 754 at the beginning of 2020 to 1,022 as of now. We are highly confident that we will achieve our target of opening 350-400 stores in China on net basis in 2023. We are also optimistic that we will be able to expand our network in different tier cities across China. We now expect to have about 5,000 stores in China by 2027, compared to 3,325 stores we had at the end of 2022.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Let's move on to overseas. Firstly, revenue is RMB 1.11 billion, a 42% year-over-year increase from the high base of last year, exceeding even our most optimistic expectations and setting a new record June quarter. Revenue from directly operated markets increased by 85%, accounting for more than 45% of our overseas revenue, up from 35% in the same period last year.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Secondly, GMV in overseas markets increased by 41% year-over-year, including a 69% growth in directly operated markets and a 32% growth in distributed markets. Overall, GMV per store in overseas markets increased by over 25% year-over-year. Average store count increased by about 11%. Major overseas markets maintained rapid growth momentum, including 106% growth in North America and a 46% growth in Latin America.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Third, overseas GMV per store in the June quarter recovered to 92% of the same period in 2019. This is meaningfully higher than the 75% and 68% recovery rate we saw in the previous quarter and the same period of last year. The distributed markets recovered to 95% pre-COVID levels, while the DTC market recovered to 85%. In our top five overseas markets, GMV per store in North America was nearly twice the same period in 2019. GMV per store in Latin America, Europe, Middle East and North Africa, all recovered to about 90% of 2019 levels. Asian markets recovered to about 65%, which was the highest we have seen since the pandemic, and the recovery is still very fast.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Countrywise, GMV per store in Mexico is 10% higher than pre-COVID level. In the first half of 2023, 4,000 new SKUs were launched in Mexico and became a major driver of its local sales. GMV per store in the US was 2x the pre-COVID level. Since the grand opening of our first global flagship store at Times Square on May 20th, it has consistently been setting new sales records.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Fourth, profit margin of overseas business is substantially improving, thanks to the operating leverage. In this quarter, overseas markets contributed more than 40% of total operating profit, meaningfully higher than the approximately 25% in last quarter. Margin expansion was especially apparent in US market, along with a rapid revenue growth and refined unit economics. About 90% of our stores there was already profitable in June, significantly driving up the operating profit margin for overseas directly operating markets.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

In the first half of 2023, 72 new stores were opened in overseas markets on a net basis. The second half of current year tends to be peak season for store opening and sales. Recently, store opening have accelerated. In July, we added 38 overseas stores. We are still positive with the target of 350-450 addition in overseas markets in 2023.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Since the beginning of this year, I have spent the majority of my time in overseas markets. During this period, I had a lot of deep thinking about MINISO's value proposition, and I'd like to take this opportunity today to share with you. In the past 10 years, since our inception, MINISO leveraged China's unmatched supply chains. We used to position our products as 3 highs and 3 lows, meaning high appealing, high quality, and high frequency, and low cost, low markup, and low prices. We relied on this cost leadership strategy for a very rapid growth.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

2023 marks the first year of MINISO brand upgrade. Its value proposition has never been clearer in my mind. Facing new changes and new trends, both at home and abroad, we cannot survive by relying solely on cost advantages. In addition to that, we also need to differentiate our product offerings as much as we can to engage in global competition. I have renewed MINISO's brand positioning to a global value retailer, offering lifestyle products featuring IP design. How should we think about this positioning?

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

...The first message I want to deliver is that we attach great importance to the design of every single product. We have developed a lot of trending lifestyle products that resonate with young consumers, by focusing on creating more interest-driven content, just like Nike has been doing in promoting better design in sportswear.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

In addition to that, we should become IP powerhouse such as Disney, and make lifestyle products more fashion by featuring IPs. By leveraging consumer demand to guide product design, we can always develop products that are truly unique or are believed to offer more value than similar IP products. Only in this way can we continuously design bestselling products that also resonate with our consumers. We are now cooperating with 80 IP licensors, compared to 17 when we listed in the U.S. 3 years ago. Take the recent blockbuster Barbie series as an example. A half of related SKUs we had in stock were sold out within the first 5 days of launch.

The collaboration generated immense buzz on social media platforms, including Xiaohongshu, while related topics received over 13 million comments, as well as Weibo, where the topic accumulated nearly 300 million views as it became another phenomenal IP co-branding event for us.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Third, we will stick to value for money proposition. MINISO believes in our happy philosophy as we offer creative and high-quality products to global consumers at affordable price. This is in line with our commitment to make it easy for consumers to enjoy happy and quality life. Leveraging China's efficient supply chain and design capabilities we have accumulated during the past 10 years, MINISO is able to offer global consumers budget-friendly products and build our customer-friendly image. This value for money proposition enables us great advantages in navigating through economic cycles.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

We have identified two product strategies for overseas markets: globalization and IP strategy. To accomplish these two strategies successfully, we need to consistently drive product and design innovations. That means we need to offer emotional resonance with consumers by providing good-looking, fun, and useful products, among which we believe three categories will be key to our success. These are big beauties, big toys, and big IP products. In this year, perfumes, IP-related plush toys, and IP-related blind boxes acted as our pillar categories, and have generated explosive growth in overseas markets, opening up a new avenues for our future growth.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

We'll implement super store strategy. I believe super stores play a key role in growing mind share among consumers and strengthening our brand as they contribute larger sales. For example, our recently opened flagship store on Guangzhou Beijing Road, refreshed the sales record of single store in China for years. This is particularly impressive given the ongoing weakness of consumption in China. In particular, the opening performance of Times Square flagship store was unbelievably strong. It has upgraded our understanding of our business, including for me and the whole management team. It helped us have better understanding of the market potential in the US, strengthened our confidence in further developing and making investments there. The super store concept is potentially a new path towards improving personal sales for us.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Let me brief you our recent developments from TOP TOY. Quarterly revenue increase, increased by 81% year-on-year, with an increase of 46% year-on-year in personal sales, an increase of 24% of average store count.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

I believe that high quality growth is just ahead of us. In the June quarter, TOP TOY's product mix has been optimized, as our exclusive products accounted for one third of total sales, reaching the goal we set about two years ago. Merchandise GP margin was about 46%, 5 percentage points higher than the same period last year. Accounting GP margin continued to increase to a comparable level of MINISO China one year ago. This is a reasonable comparison as both business employ an analog business model, where we mainly attract partners to invest in stores. When sales reach a certain scale, operational leverage will kick in and drive our profit.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Now turn over to Ethan for a review of our financial performance in June quarter and fiscal year 2023. Thank you, Jack. Hello, everyone. Thank you again for joining us today. I'll walk you through our financial results for the June quarter. Please note that all numbers are in RMB, unless otherwise stated, and I will also refer to some non-IFRS measures, which have excluded share-based compensation expenses. Revenue is RMB 3.25 billion, representing an increase of 40% year-on-year. Revenue from China was RMB 2.14 billion, up at 9% year-on-year. The increase was driven by a growth of 42% in revenue from MINISO's offline stores, and a growth of 81% in revenue from TOP TOY.

The 42% year-on-year growth of MINISO offline business, was the result of a 9% growth in average store count, and a 31% of growth in personal sales. On a more comparable basis, personal sales increased by about 25% in excluding the impact of store closures last year. The 81% year-on-year growth of TOP TOY was a result of 24% growth in average store count, and a 46% growth in personal sales. On a more comparable basis, personal sales increased by about 30%, excluding the impact of store closure last year. Revenue from overseas markets was RMB 1.11 billion, up 42% year-on-year, driven by an increase of 11% in average store count, and a growth of about 28% in average revenue per MINISO store in overseas markets.

Revenue from distributed markets was about RMB 609 million, an increase of about 20% year-on-year. Revenue from directly operating markets was about RMB 506 million, an increase of about 85% year-on-year, accounting for 45% of overseas revenue as compared to 35% last year. For through fiscal year 2023, revenue was RMB 11.5 billion, up 14% year-on-year. Of this, revenue from overseas markets was about RMB 3.82 billion, up 45% year-over-year. Gross profit in the June quarter was RMB 1.3 billion, up 68% year-over-year. Gross margin was 39.8%, compared to 33.3% in the same period of last year. The year-over-year increase was due to three reasons: One, GP margin in China increased by about 6 percentage points, thanks to our continuous effort in brand upgrade.

Two, GP margin in overseas markets increased by another 6 percentage points, thanks to product optimization and higher revenue contribution from directly operated markets. Three, GP margin of TOP TOY increased by 10 percentage points due to product optimization. SG&A expense as a percentage of revenue was 19%, down from 22.7% in the same period of last year. Selling and distribution expense was about RMB 458 million, increased by 33% year-over-year, driven by, 1, increased IP licensing expenses, number 2, increased personnel-related expenses, and number 3, increased marketing expenses, mainly in connection with our strategic brand upgrade of MINISO in China. Going forward, we will continue to see marketing expense increase for a while, but we are highly confident to make sure the total SG&A expense maintained at a reasonable and controllable level of revenue.

G&A expense was RMB 161 million, decreasing by 10% year-over-year. Turning to profitability. Operating profit was RMB 690 million, increasing by 154%. Operating margin in this quarter was 22%, the first time ever for us to reach such a high level. For fiscal year 2023, operating margin has reached nearly 20% too. Adjusted net profit in this quarter was RMB 571 million, increasing by 156% year-over-year. For full fiscal year, adjusted net profit was about RMB 1.85 billion, up 155% year-over-year. Adjusted net margin in this quarter was 17.6%, compared to 9.6% in the same period of 2022.

For fiscal year, adjusted net margin was 16.1%, compared to 7.2% in last year. As of June 30, 2023, we had a strong cash position of RMB 7.3 billion, compared to RMB 5.8 billion one year ago. Turning to capital allocation strategy, we have established a dividend policy of paying out no less than 50% of adjusted net profit in the future. For fiscal year 2023, the board of directors approved a cash dividend in amount of $0.412 per US dollar per ADS, about 50% of our adjusted EPS of $0.81. The aggregate amount of cash to be paid is approximately $128.5 million US dollars, or RMB 931.7 million.

MINISO aims to be a world-class company. Our capital allocation strategy in the future will balance new growth opportunities and our commitment to bring stable return to shareholders. June quarter has witnessed too many breakthroughs and new heights in each major aspects of our operations. Looking forward into the September quarter, we expect our sales will continue to grow strongly on a year-over-year basis, driven by better store level performance and store network expansion. Meanwhile, our margin profile will continue to optimize on a year-over-year basis. Thank you. This concludes our prepared remarks. We are now ready to take questions.

Operator (participant)

Thank you, sir. The first question today comes from the lines of Michelle Lam from Goldman Sachs. Line is open. Please go ahead.

Michelle Lam (Analyst)

[Fl]

[Fl]。 I have 3 questions, first 2 is for Mr. Zhang.

Ye. The first one is, the IP performance has been very strong this year. Can you share with us the sales contribution for IP products this year, and whether we have any target for the future? Regarding the cooperation method with partners, is there any difference between the domestic market and also the overseas market? My second question is about the China per store GMV upside. People are still around 15% gap versus pre-COVID level. Do we have any specific strategies to drive further improvement? Third question is about the OP margin for overseas. This year, this quarter, we have a 35% revenue from overseas and 40% contribution from operating profits for overseas business.

Can you share with us what is the drivers for DTC and also the distribution model, and how do we think about the margin upside for the overseas business? Thank you.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Okay, Michelle, thank you for your first question. We will continue to continue, you know, enlarge our cooperation with strong IPs, with global influence, and, you know, in line with our strategic direction of brand upgrade, and will help, be helpful in, in, in expanding ourselves. Specifically in overseas market, we will stick to our big IP product strategy, and we will continue to fund the strong IPs in each important market we are in. That is, as that will be one of our focus too. For the target of IP sales, we do not have specific numbers at this moment, but my, my, my personal estimate is that in the near future, it will be stabilized at about 25% to 30%.

In the first half, the IP contribution was about 25%, about 1 percentage point higher than the same period last year. Compared to, you know, 2019, it has been, you know, 10% higher. I would say in at least for a while, the percentage contribution will be 25%-30%.

In the future, we will dynamically change the contribution from IP based on the market change. There's no significant difference between our cooperation model between in China and overseas market. We specifically found that IPs in, you know, the US or you know, from Japanese, has, you know, a global appealing among our customers. We will cooperate with our IP licensors in terms of product authorization, in terms of marketing, in terms of shopping experience and store experience, and in all these aspects, we will leverage IP to empower us in terms of, you know, branding power and product power. Thank you.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

In terms of the second question, you are right that with the progress of our brand upgrade, we will stick to our, you know, big store strategy or flagship store strategy. By the end of June, we, the average store size of MINISO China store is about 180 sq meters, and this number has been stabilized during the past several years. With the improvement of our branding power and our product, it has created some, you know, preconditions of our, you know, big stores opening. As I shared earlier, only by open big stores, can we, you know, increasing our mind share among our customers, as these big stores contribute a larger sales.

By opening big stores or flagship stores, it's also, you know, common experience that we have learned from the big retailers, the advanced retailers from European countries, and the U.S. In the first 6 months, we have opened, a dozens of, you know, big stores that has demonstration effect. For example, the, the flagship stores of Beijing Road and the Chunxi Road. Now, in our store portfolio, we have about 100 flagship store or big stores, large stores. On average, the initial CapEx is about 2 times of ordinary stores. In the first 6 months, the personal sales has been very great of these big stores, because they are, you know, personal sales is 3 times of that of ordinary stores, with ASP high, 7% higher.

In the inventory turn, turnover days, with inventory turnover days of about 30 days, it's about 20 days less than the ordinary stores. In general, in terms of ROI and payback, these large stores will be, you know, far better than the ordinary stores. Michelle, this is about your third questions about the OP margin of improvements. I think, first of all, you have to know that this 1st percentage, you know, OP margin contribution, is the one before the allocation of, you know, headquarter overheads. Because there's always some, you know, overheads in the headquarters that even is allocatable to HBU.

For the OP margin of overseas business, I would say now, currently it's between the 22% of, you know, the group level and about, you know, the nearly 30% of MINISO China, it's between them. I, I'll say, whenever the OP margin of overseas business is above the average, the group level, its profit contribution will be higher than its revenue contribution. If you look at the comparison between this quarter and last quarter, I would say the source from the improvement is mainly from the operating leverage.

If we look at the expense structure in both directly operating markets and distributor markets in this quarter, we would see that the expense ratio, the OPEX ratio, you know, they decreased about, you know, several percentage points compared to last quarter. In general, the OP margin of overseas market in this quarter has improved by about 5 percentage points on a quarter-over-quarter basis. The last point I would add is, I would say it's not the first time that we have seen OP margin contribution of overseas markets surpass 40%. As we shared earlier, before the pandemic, when the overseas market contributed about 35% or nearly 40% revenue contribution, then we already saw a nearly 40% or over 40% of margin contribution.

I would say, because the directly operating markets of our overseas business is still picking up operational leverage. The overall profit contribution from overseas market, I would say you will not surprised to see it will fluctuate for a while. Thank you.

Michelle Lam (Analyst)

[Fl]

Operator (participant)

Thank you. The next question is from the lines of Anne Ling from Jefferies. Line is open. Please go ahead.

Anne Ling (Senior Equity Analyst)

Hey, hello, [Fl]

Guofu Ye (Founder and CEO)

[Fl]

Anne Ling (Senior Equity Analyst)

[Fl]。 my first question is on the superstore strategy.

Just a follow-up question, regarding, like, you know, whether we will be opening self-owned superstore? How many, how many of these store, you know, in the future will be operated by the franchise? In the future, you know, what is our target for the, for these, you know, superstore in our 300-400, you know, store opening for this year, for both China as well as for the overseas market. The second question is coming out from, is that, is actually for the U.S. market. How much of the sales contribution is, like, you know, from our, from the U.S., you know, as a percentage to the U.S., from the overseas sales?

In terms of the personal performance, you know, how different is it so far in, you know, versus the China market? I remember that in the past, our S, and it's been gradually building up, which in the future will help drive the sales as well as the profitability.

Guofu Ye (Founder and CEO)

[Fl]

Operator (participant)

Thank you, Ann.

Guofu Ye (Founder and CEO)

For your first question about the large, large store strategy, I would say we'll stick to this strategy. In my, you know, design, we have a blueprint that in the future, we do believe that each city or each provincial city in China has a flagship store that represents MINISO brand image. My best guess is we should have like 500 such stores. There's no such thing that, you know, this store should be directly operated or, you know, franchisee operated. We, the most first and foremost important thing is we should find the optimal location. We will suggest every of our MINISO Overseas market to open, you know, suitable flagship stores. Because as I said, the big store strategy is critical for our future success, because it can brings our...

it, it brings MINISO brand image and our store performance to a new heights, and it will also has a demonstration effect for its peer stores among the same markets. For example, in the U.S. markets, our flagship stores there, you know, we can deliver like, you know, $1.3 million-$1.4 million sales record. For our, you know, Guangzhou Beijing Road flagship stores, we may have, you know, RMB 5 million sales per month, and all these are new sales record for MINISO universe.

Eason Zhang (CFO and VP)

For the second question about the U.S. market, specifically, I'll say, the U.S. market for the past 3 quarters, it has 2 quarters ranked the first among its revenue contribution in overseas market, and in June quarter, it's the second largest in terms of revenue contribution. This revenue contribution of our overseas market is high teens. Its revenue contribution of our total sales is like mid-single digit during the past several quarters. You are right that we have, you know, a lot of potential in terms of store operations, in terms of product optimizations, in terms of unit economics, in the U.S. in the near term. As I shared in our prepared remarks, the unit economics of the U.S. stores has been improved a lot.

For example, the OPEX ratio of U.S. stores for during the past 12 months decreased by about 20 percentage points. That is one big thing that turned this business into a profitable one. Thank you.

Lucy Yu (Research Analyst)

Thank you.

Operator (participant)

Thank you. The next question is from the line of Lucy Yu from Bank of America Merrill Lynch. Line is open, please go ahead.

Speaker 8

[Fl]

Lucy Yu (Research Analyst)

我 ， 我 先 翻 译 一 下 吧 。 There has been mentioned in the announcement that MINISO China is targeting for 5,000 stores in 2027. What's the allocation or geography allocation of those new stores? Do we have any midterm plan for the MINISO Overseas market, which may have greater potential in the long term? The second one is on the MINISO China store unit economics post-COVID. What's the detailed GP margin of the expense breaking down, as well as payback period? Thank you.

Speaker 9

[Fl]

Eason Zhang (CFO and VP)

Okay. Thank you, Lucy. For the first question about the store opening potential. In China, our target is to have 5,000 stores by year end of 2027. We have strong track record, and we have high confidence to achieve that goal. In terms of our overseas potential, I would say, from my perspective, we, we do not have any, you know, worry, concern about the, the, the store opening in overseas market for at least the next 10 years. My personal observation in this year, I have spent a lot of time in overseas market, is that, in a lot of countries in overseas market, we can open 1 MINISO, at least 1 MINISO stores for each 100,000 people in overseas markets.

Lucy, for your second question about the payback of the domestic stores. We strongly believe that the payback period for most of our franchisees has, you know, been shortened during the past several months. There are several reasons. The first is our better store performance during the first half of this year. The second reason is the optimization of their expense structure, i.e., the rent level decreased, the staffing costs optimized, and there are other, you know, savings in their costs, too. Our estimate that our, you know, franchisees on average, their margin profile has improved significantly compared to, you know, one year ago, two year ago, especially in Tier 1 cities.

In this year, we have observed that in Tier 1 cities, our MINISO stores, you know, their sales per store increased by 30%, more than 30% on a year-over-year basis. It's higher than the, you know, 20% of the average year-over-year growth. For the new stores in Tier 1 cities in this year, we observed that their average rent, you know, rent, rent level has, you know, decreased by single digits compared to last three years. As Misty just shared, in the first half, we have opened a batch of demonstrated big stores. The big stores, their average payback period is far, far less than the ordinary stores. I, I would say, as my last point to your question, is that the big stores will also help increase the ROI of our franchisees. Thank you.

Jialong Shi (Head of HK and China Equity Research)

谢 谢 叶 总，谢 谢 Ethan。

Eason Zhang (CFO and VP)

Thank you.

Operator (participant)

Thank you. The next question is from the line of Samuel Wang from UBS. Line is open. Please go ahead.

Samuel Wang (Equity Research Analyst)

[Fl]

We saw from the announcement that our July sales is also very strong, with a domestic growth above 25%, overseas growth 50%.

What are the reasons and drivers behind that? Thank you.

Eason Zhang (CFO and VP)

Thank you, Samuel. This is Ethan. Yes, our, you know, domestic sales increased by more than 25% in July month. It's between 25% to, you know, 30%, driven by two drivers. The first is the, you know, the, you know, the personal sales of MINISO China increased by mid-teens during the same period. We have also in a decent of, you know, store number growth. On a single store basis, the, you know, mid-teens per store sales increase was, you know, major from, you know, a low single digit of ASP hike and a high single digit or about 10% of, you know, traffic improvement. The overseas market, we also mentioned in the earnings release that the GMV increased by about 50%.

I would say the overseas, you know, directly operated markets still has, you know, see continued high, high growth rate, you know, comparable to, to the June quarter. In overseas market, we also see, you know, the drivers also come from the traffic and ASP hike. Thank you.

Operator (participant)

Thank you. The next question is from Jin Ru Song from Industrial Securities. Line is open. Please go ahead.

Jialong Shi (Head of HK and China Equity Research)

哎 , 谢 谢 叶 总 ， 谢 谢 Ethan, 呃 , 的 提 , 呃 , 这 个 提 问 机 会 。 然 后 我 这 边 , 呃 , 有 两 条 问 题 想 请 教 一 下 ， 关 于 呃 , 主 要 是 第 一 条 ， 想 看 一 下 ， 就 是 我 们 在 未 来 的 , 呃 , 这 个 , 呃 , 时 间 内 怎 么 样 有 这 个 提 升 海 外 的 供 应 链 能 力 的 一 个 计 划 。 因 为 我 看 到 现 在 , 尤 其 是 今 年 以 来 , 我 们 海 外 同 店 的 这 个 增 长 是 非 常 快 的 , 而 且 也 是 , 呃 , 预 计 会 有 一 个 保 持 的 持 续 的 增 速 。 所 以 想 看 一 下 , 呃 , 在 货 品 上 新 或 者 说 供 应 链 的 这 个 能 力 上 面 , 我 们 会 做 什 么 样 相 应 的 举 动 。 然 后 第 二 个 是 想 请 教 一 下 , 我 们 对 于 客 单 价 的 一 个 , 呃 , 判 断 ， 那 也 分 ...

您 也 分 享 了 , 就 是 我 们 今 年 是 同 比 3% 的 一 个 提 升 。 相 对 于 , 我 其 实 更 想 了 解 一 下 , 就 是 海 外 今 年 的 一 个 平 均 客 单 价 的 一 个 提 升 的 幅 度 , 以 及 对 于 未 来 1 年 的 一 个 , 国 内 和 海 外 的 客 单 价 的 一 个 展 望 。 我 也 就 简 单 翻 译 一 下 吧 。 I will have two questions. The first question is about how to improve our supply chain and about the, our overseas supply speed and control inventory, ask you.

The second question is, how do we forecast the ASP? Seems like it increased by 3% year-over-year this time. How do we forecast about the overseas ASP on the next year and the domestic ASP on next year? Thank you.

Speaker 9

供 应 链 这 一 块 我 们 还 是 以 China 为 基 础 ， 也 在 布 局 Southeast Asia 、 Vietnam 和 Vietnam 的 采 购 。 第 二 个 就 是 也 在 加 大 本 地 采 购 ， 比 如 说 US ， 我 们 在 本 地 做 了 很 多 这 个 IP 类 的 零 食 ， 我 们 也 在 做 ， 我 们 也 在 逐 渐 地 布 局 全 球 化 的 供 应 链 ， 但 现 在 依 然 以 China 为 主 。

Eason Zhang (CFO and VP)

Okay. Thank you for questions. In terms of, you know, overseas supply chain expansion plan, we have 2 points to add here. The first is that, you know, we will stick to, you know, the, our, you know, accumulated resource in China. China will definitely will be the, the major supplier supply chain base. We are still exploring new, you know, new partners in Southeast Asian countries such as, you know, Vietnam and so on. The second, we will increase the percentage of direct sourcing in local markets such as the U.S. market. For example, we have been proactively increasing the percentage of IP-related snacks in U.S. markets. For your second question about ESP in overseas market, I'd say in China it's around, you know, RMB 35, right?

Now it's about 37 in the June quarter. For overseas market, I'd say we have a rough number that on average, ASP in overseas market is about 2 times or, or a little bit higher of, you know, China's ASP. In countries, in specific countries like in European countries, in the US, I'd say this number is about 3 times or even higher than that of China than that of China. In, you know, our rapid growth markets such as the US, in Canada, and so on, we still see our ASP increasing at a very fast speed. Thank you.

Operator (participant)

Thank you once again for joining us today, and our conference call now comes to an end. If you have any further questions, please contact MINISO IR team. Our contact information can be found on today's press release. We will see you in the next quarter. Have a nice day. Goodbye.