MINISO Group Holding Limited

Hello, everyone. Thank you for waiting and welcome to listen to the 4th quarter of 2020 and the annual phone call conference of 2025. Now, all participants are in the listening mode. After the management level speech, we will also conduct the Q&A session. Please mark your name and where you are and note that this event will be recorded. This phone call conference provides English voice transmission. 你可以在Zoom会议中点击传译来选择语言。 我们已今天公布了2025年第四季度及2025年全年业绩, 可以在我们的投资者关系网站ir.minnesot.com上查阅。 参加今天会议的有我们的创始人兼首席执行官叶国富先生和首席财务官张敬金先生。 Before we continue, please take a look at the security statement in our financial report. This statement is also used for this phone call, because we will make a pre-published statement. Please note that we will be discussing non-IFAS financial indicators today. We have explained these indicators in the financial report of the company and the documents submitted to the U.S. Stock Exchange Commission and the Hong Kong Exchange Office, and have adjusted the most reasonable indicators according to the IFAS report. Unless there is another explanation, the currency unit is the people's currency. In addition, we have prepared a written report for today's phone conference. If you are using Zoom conference, you can see it now. You can also view it on our RR website later. Next, let's welcome Mr. Ye Guofu to start speaking. Hello, everyone.

Welcome to the 4th quarter of the Mingchang Youping Group's 4th quarter of the year. The 4th quarter of the year is the annual financial report conference. In 2025, there will be a growth in documents for the group. China China China China The core brand is outstanding. In the fourth quarter, the mini brand achieved the highest growth rate in nearly eight quarters, with a growth rate of 28%. The revenue reached 5.6.5 billion yuan. At the same time, the brand also achieved a strong growth rate of 4 quarters, with a growth rate of 112%. The annual income of nearly 600 million yuan shows the strong vitality of the multi-brand system. This year, we opened a store, and in the context of the reduction in sales in 2024, we achieved higher income growth, more performance, and more sales. This shows that our growth model is more efficient. The multi-ap, multi-product, globalized business model of Chunfeng Yanzi also shows its great potential for long-term growth. Today, I will combine the results of the whole year's business and share with you the significant results of the MISO strategy in the past year, especially focusing on our breakthrough progress in the two major fields of brand upgrade and door experience optimization. The first is MISO China, MISO brand. In the fourth quarter, the income of 56.5 billion yuan, of which 28.7 billion yuan was contributed internally by China. China has a growth of 25% compared to January 2021. China has a foreign income of 27.8 billion. China has a growth of 31% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50% compared to January 2021. China has a growth of nearly 50 2023 is the big year of retaliatory consumption after the epidemic. And Misao can also break through its share in the 25-year long-term market. This shows that this is a real structural improvement, not just by eating red rice. At the same time, we are also very confident. Assuming that the red rice environment will improve in 2026, and the consumption will return to the original state, Misao will have a stronger brand mentality, a better store position, a more efficient supply chain, and a better supply chain. The competitive status must be able to surpass the average elasticity of the industry, capture greater popularity, and gain more market share. And until the end of the fourth quarter, the number of domestic homebuyers reached 1,157, creating a new record. Homebuyers vote with their feet is the most real market signal. And more and more powerful large homebuyers came in to join our industry. Their homebuyers saw the performance and profit of our major stores with their own eyes. This trust is built up from our one-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred-hundred 我们既拿下了北上广深一线城市顶级商圈, 也布局了呼和浩特海口贵阳等地特色街区。 今年1月,广州增加密钞烂的KL, 首日客流近万人次, 销售额达54万元,创华南区域纪录, 同时密钞烂的在乌鲁木齐, 南宁等一线城市的首店表现同样亮眼。 南宁店市营业带上了商场客流成比增长80%, The Urumqi store, which used to be a shopping mall with more than 100 IP addresses, has become the new center of regional trend consumption, and has proven its strength in the downstream market. Such a high-quality online experience store is the heart of IP operation. Through real-world scenario design and product generation, we can really enter the IP world. This kind of tangible and participatory online experience not only makes the IP value fall, but also makes us collect and return. So I mean to say that offline stores are the best advertising brand and the best source of traffic. Microsoft is not the first to set up a large-scale brand. It is definitely not the last. But why is our large-scale strategy more difficult for others to learn? The key is that the large-scale model must also have a strong self-reliance for foundation. Without self-reliance, large-scale is empty. Some self-reliance can continue to produce unique and different experiences. And behind this is the design team of more than 1,500 global high-end suppliers in the supply chain for more than 10 years. There are also more than 150 top-level IP cooperation ecosystems. People who want to copy will have to spend the same amount of time and cost to build these core capabilities. And in this process, we will continue to move forward and not only move forward. In terms of the power station, we will build seven large power stations in 2024. And in 25 years, we will continue to treat it well. We hope that in different cities, business circles, and consumer environments, There is a kind of MISO telecommunications with precision equipment. That is to say, every business circle has a MISO's ZU. In fact, I proposed that MISO will carry out a large number of telecommunications. We also want to take this opportunity to share with you the deep logic behind this strategy. Why do all of our new telecommunications have to be big telecommunications, good telecommunications, and telecom telecommunications? Looking back at the development process, MISO has easily passed two strategic stages. First, run the whole world, spread the world, and then do an IP strategy upgrade, from a flat price to a cross-border, into an e-consumption destination. In these two stages, we have achieved the success of the current stage. Now we are entering the third stage, which is to upgrade the core of the core network with Microsoft NAND. This is not a simple door chain expansion, but it integrates the core capabilities of the previous two stages, and installs more APU categories in a larger space, and evokes emotional insomnia in a clear scene. You can see you get that AP don't see not a lot of Google. This is from my time being. Yeah. So you're not saying you can't find something that can be seen quite. This is our question. How do you think this is going to happen? You know, I don't know. I don't know. I don't know. The second is overseas. In the fourth quarter, overseas revenue of the fourth quarter reached 2.8 billion yuan, which is a historical high. The growth rate increased by 31%. Overseas closed-door stores competed in the quarter with 159 stores. In 2025, there will be 465 stores in the whole year. Our largest overseas market, the U.S., has grown by more than 60% in the whole year of 2025. Of which, the fourth quarter has a growth rate of 57%. The growth of power generation is more than 20%, which is more than what we expected. I talked about the performance of the last year's record meeting. North American market power supply is the core focus of the improvement in 2025. A year has passed since the US market power supply has made a comprehensive improvement in quality operation efficiency and user deepening. Let's talk about power supply. First of all, the rise in new power quality. The Japanese market share of new power in 2025 is historically high. As of 2024, double-digit growth will be achieved. Customer price and customer volume will not increase. Single-chain profitability and consumption transformation capabilities will be significantly enhanced. In this context, the old power supply will be more resilient. Through the fine-tuning of the power supply, the final model will make it possible for the old power supply to achieve the growth of the volume of documents. The daily sales and trading volume will double, and the current flow and consumption frequency will not improve. It is particularly worth mentioning the running of the Plaza gate. In 2025, 48 Plaza gates were opened throughout the year. These gates have a very high generation and customer base price. The daily sales of the Hsianzhu, Poyin, Tengqi shopping malls opened a more flexible and profitable opening new path for us. In operation, we focus on the core area to continue to open stores. The logistics efficiency is greatly improved. The cost efficiency is significantly improved. The U.S. staff is more stable. This document is the strongest and most powerful Thank you. One hundred and seventy-two single-caliber inputs have reached nearly six billion yuan. In terms of door chains, up to the end of 2025, Taobao's number of door chains has reached 334, including 34 overseas door chains, which are located in the markets of Thailand, Malaysia, Indonesia, and Japan. The international layout is being proposed. In the domestic operation strategy, Taobao is using its own product to maintain high-end innovation to determine the growth of door chains. The following AP Romeo will quickly break through with the help of stars. . . . . . This is an in-depth, multi-talented, self-sufficient experience. The most rich IP governance is our IP consumption. It is the most core, the most difficult to copy core competition. Microsoft's strategic vision is to become the world's leading IP operating platform. I have always seen it clearly and firmly. All the way through, we have used practice to prove the correct direction, the model is established, and the consumer's Thank you, Mr. Ye.

Welcome to today's meeting. Next, let me quickly review the financial data of this period, and then talk about our view on the 26th year and the 1st quarter. The currency is RMB, except for another explanation. First, let's review the situation of the completion of Q4 in the 25th year. Q4 group's income has increased by 32.7%, as I said earlier. from 25% to 30% in the previous year. We can see that all the BEOs have handed out higher-than-expected answers in Q4. Among them, China's domestic Q4 revenue has increased by 25% compared to the previous year's high double-digit number. The Q4 revenue has increased by nearly 30 billion in overseas Q4. The previous year's expected revenue was from low 20s to high 20s. Top Toys' Q4 revenue share growth was 112%, which exceeded the previous 80-90% forecast. Therefore, Q4 led to a 26.2% annual revenue share growth, which exceeded the previous 25% growth forecast we gave in the first half of the year. In the fourth quarter, the same-point growth of Mingchao Youping China is medium-sized. and the U.S. share price has increased by more than 20%. The share price of these two major markets has exceeded our previous expectations in the fourth quarter. The share price of the two upper markets has reached the middle position throughout the year. Although our previous guidance gave us the middle position, in fact, because Q4 is better than expected, the middle position is a little bit lower than our previous expectations. The adjusted net profit has increased by 12% in the fourth quarter, to the expected double-digit growth of the previous year. The net profit of this year's adjustment is 36.7 billion yuan, which is also in line with our previous year's leading range. In the fourth quarter, the net profit of this year's adjustment is 17%. Based on the upper and lower half of the year, in the second half of the year, the net profit of this year's adjustment is also lower than the upper half of the year. Looking at the quarter's revenue, we are very happy to have created three layers at the revenue level. The first milestone is the first time our single-segment group has exceeded 100 billion yuan. The first time our single-segment group has exceeded 60 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. The first time our single-segment group has exceeded 200 billion yuan. Since 2025, MINTSO's domestic performance in China has continued to grow. The annual revenue increase of the same ratio has increased significantly. Q4's same ratio increase is the highest in the past eight seasons. MINTSO's overseas revenue increase of the same ratio is 31%. Total's Q4 revenue is 600 million, and the same ratio increase is 112%. Since the last quarter, the same ratio increase of the same ratio has maintained a three-digit increase, which is more than expected. Back to the year of 2025, 21.4 billion in revenue, there are a few milestones that I think can be highlighted. First of all, the first milestone of 100 billion in revenue in China. In such an economic environment, we have increased by nearly 17%. The second is that overseas, the annual revenue of 86 billion has increased by nearly 30%. TopToy's annual revenue increased by 95% to maintain a high-speed growth. In terms of B-area structure, China's domestic revenue increased by 22% and accounted for nearly 60% of the total revenue. Overseas revenue increased by 33% and accounted for 40% of overseas revenue. In terms of the performance of the copper industry, Mint's China's Q4 copper industry continued to grow and reached a double. It exceeded our expectations. In the past 25 years, China's share price has grown from Q1 to Q2 to Q3 to Q4. China's share price has grown from Q1 to Q2 to Q3. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q1. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China's share price has grown from Q1 to Q2. China In order to improve the power supply, we have made a lot of efforts from the inside out. In terms of internal management, we have tested the image and integrated the growth of the power supply into the core test indicator. We have proposed a digitalized infrastructure, through the systemization, digitalization and intelligentization of the business process, to strengthen the team system. The third is the avoidance and optimization of operations. The power supply SOP has been fully upgraded, and the supply chain has been fully optimized, effectively improving the performance satisfaction, high-demand products continue to produce performance and reduce potential sales losses. Fourth, we speed up the delivery and promotion of products. We have improved the sales contribution of new FQs and the promotion of new products. Fifth, the health of our stores is constantly improving. From the perspective of business operations, we also continue to optimize the sales of our products and contribute to our stores. From the perspective of people, we have increased the conversion rate of our stores. By increasing the flow rate, to obtain high-frequency mid-range information. By testing different door-to-door decorations and layers, we can obtain information about door-to-door static electricity. This is just an example. This further boosts the optimization of our channels. At the same time, we have launched diversified marketing services. For example, this year, we have expanded Xiaohongshu's one-day computer activity, artists' streets and sign-up events. At the same time, there are also various star-studded stores. The wear and wear movements of star-studded stores and social media such as Xiaohongshu. Through the interaction of fans, we have enhanced the transparency of the brand. Looking at the products we just talked about, we would like to add two more things here. First, we have grasped the trend of seasonal and discounted products. Second, we have gained a deeper understanding of IP and non-IP. On the one hand, we have used the smartness of IP products well. On the other hand, we have used many methods to create a link between non-IP products. In terms of the factory, we have improved the storage of stores. We have completed nearly 300 stores in the whole year. We have achieved very good results. In terms of overseas, the performance of the same store is slightly different. First of all, in Asia and Latin America, the performance of the same store in these two markets is relatively inferior to that of other overseas markets. And our new strategic market, North America and Europe, and the performance of the power supply. Among them, our most important strategic operating market, the U.S., has achieved more than 20% of the power supply growth in Q4, exceeding previous expectations, and achieved power supply growth throughout the year. This is the result of our fine-tuning of the pull of the terminal performance and the door-to-door model. We are also excited to see that the door-to-door profit rate in the U.S. in 2025 will be equally healthy. Through scientific decision-making, The U.S. behind-the-scenes cost rate in the entire year of 2025 has lowered the number of low-end buyers. It has further dragged the continued improvement of the U.S. business profit rate. It is worth mentioning that in 2025, the U.S. income and profit both greatly improved. In 2025, the U.S. business suffered a huge red-light environment, such as a tax-free counterfeiting. Our team, with its excellent front-line support, sharp market insights, and a good execution, delivered an excellent result. In short, this result shows that our right-wing model is strong enough. Our team also has a strong ability to seize opportunities in uncertainty. This sense of organization from both inside and outside is the foundation of our business cycle. In the past 12 months, we have seen a very typical expression of the entire organization. . . . . . . . We are confident that in the Southeast Asia market, we will be able to reproduce the logic of respect for China and the United States. In terms of door stores, at the end of 2025, the number of door stores has reached nearly 8,500. The total number of door stores has increased by 647 in the year. Among them, the number of door stores in the world has officially exceeded 8,000. In China, the total number of door stores has increased by 182 in the year of 2025. Last year, the number of door stores increased by 460. Back in 2024, Mingchang China's domestic income increase was about 10%. In 2025, Mingchang China's domestic income increase was about 17%. This means that in 2025, we achieved a higher income increase with fewer power plants. This means that we are heading for a higher quality growth. In 2025, Minito overseas, it achieved 3,583 power plants in 465 power plants in the whole year. PowerPoint's income increase was 58%. At the end of 2020, it reached 334 stores. TopToy started to launch at the end of 2024. In more than a year, the number of overseas stores has reached 30 stores, including in Malaysia, Indonesia, Thailand, Japan, and China and Macau. At the end of 2020, MINISO has reached 26 stores, covering 19 cities across the country, with MINISO SPACE, LAND, and FRIENDS as core stores. Le Xi Men and Qi Jian Dian, and other major companies, accounted for about 10% of the total number of companies in China. However, in 2020, they contributed 20% of the GDP. This figure will continue to increase this year. This proves the logic of major companies leading major industries. In 2026, we will accelerate the release of this market. So far, we have seen Sanya's ZDF, Zhengzhou's Dawei City, and Shanghai's Hong Kong-based Hengmeng Hotel are about to meet you. In Q4 of 2020, we opened our first overseas store in Thailand, SunSquare. The market return was very hot, which made us believe that the space of overseas stores is still very large. In 2026, we will continue to revive this immersive entertainment experience to the global core. In the 26th year of the overseas market represented by the United States, and plan to cover the front line. We will try to complete most of the new stores before the Q4 sale arrives. The purpose of this is to focus all of Q4's experience on terminal use and experience optimization, thereby maximizing the real-time performance of the store when the sale arrives. In terms of profit, Q4's profit is 46.4% and last year it was 47%. The gross profit of the whole year is 45% and 24 years is 10%. In the past five years, our gross profit has increased from 28% to 45%. That benefits our brand to upgrade the globalization and IP strategy. Since this year, we have made some healthy gross profit adjustments to some products in and out of China and abroad. We have also obtained better sales performance and increased the gross profit of the company. In the future, we will continue to pay attention to the difference between gross profit and sales. to achieve higher quality and sustainable growth. In terms of cost, Q4's total cost, not to mention SBC, increased by 45%. Among them, sales cost increased by 47%. Sales cost rate is 25%, which is 3% higher than last year. Management cost increased by 36%. Management cost rate is 5%, which was even last year. The increase in sales costs is mainly due to the three aspects of the cost of authorization and marketing in Zhiyin. First, Zhiyin is still in the early stages of rapid expansion overseas. Zhiyin's cost of people, rent, etc. is 14% higher than last year. The cost is 40% higher than last year. However, the increase of 40% has been better than the increase of 55% in the first nine months of 2025. The second is that the IT fee has increased by 107% in Q4 in the same quarter, and by 3% after the war. This is one level higher than the IP rights fee in the same period last year. This is related to our IP strategy, especially our free IP, and the potential investment of large IPs that we will work with in the future. The third is our advertising promotion fee, which has increased by 30%. Although this increase is slightly lower than Q4's revenue, the ratio of revenue is the same as last year. The net profit after adjustment of Q4 increased by 12% to 10.6 billion. The net profit after adjustment of Q4 increased by 8% to 36.7%. In Q4 of 2025, we actually looked at our revenue Q4 is lower than last year, and Q4 is lower than last year. Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and Q4 is lower than last year, and It's 1% higher. The investment of the copyright fee is 1% higher. So, in total, the impact on the operating profit rate is about 3%. So, in the whole year of 2025, the adjusted operating profit rate decline is mainly related to the investment related to the power supply. This ratio is 2% higher than last year. So, the price of the copyright and other fees is 1% higher. This is the impact of 3%. Second, from the point of view of B.U., the operating profit rate of core joint business in the East China region, based on 17 points of income growth, is only a few dozen BP drops in a small degree. This is a very healthy data. The main reason is that we are more stingy in terms of net profit. In exchange for a healthy scale of growth and more net profit contributions. At the same time, the increase in the ratio of new business from the lightning warehouse to e-commerce has a slight effect on the profit rate of the East China region. The decline in the company's revenue is mainly due to the decline in overseas revenue, which is the same as in 2024. The main reason for this decline is the structural change in revenue. For example, overseas operating revenue accounts for more than half of the revenue from 1.3% in 2024 to 2.5% in 2025. Besides North America, our other overseas operating markets are in the early stages of inflation, and the revenue is lower. At the same time, It comes from our overseas debt, which is the income from our overseas assets. Because its profit margin is higher, and the increase rate is relatively slow in 2050. So the impact of this momentum caused a decline in the profit margin overseas. In our report, we also have some projects that non-Russian credit unions will present. There are about five of them. The first one is the SBC, which is based on equity settlement. Q4 is $1.5 billion. The full year of 2025 is 3.7 billion yuan. The full year of 2024 is 8.5 million yuan. The growth of SBC this year is mainly due to our company's influence on the management team and employees. Secondly, it is related to the cost of the extension product supply value change and the issuance of the transfer debt. This is related to the CBI in the early 2025. Thirdly, it is related to the interest cost. The interest cost related to our CBI and Yonghui's investment in the ice bag. Then Q4, the cost of the insurance loan is 51 million, of which 47 million is non-cash, and the loan interest of the acquisition of Yonghui is 2,400 million. In the whole year of 2025, the interest related to CB is 1.9 billion, of which 1.7 billion is non-cash, and it does not need to be reimbursed. The loan interest of the acquisition of Yonghui is about 87 million in the whole year. Then the fourth adjustment is the Yonghui rules of division. Then we have already mentioned it before. According to Yonghui's latest estimate of 25.5 billion yuan, this strategy is about 8.1 billion yuan. The fifth is the value change in the balance sheet of the recovery war generated from the priority stock. This is generated in Q4. The amount is 1.5 to 1.6 billion yuan. This change has something to do with the strategic financing of our subsidiary last year. The above five changes in Q4, with the adjustment of the influence rate of net profit, are about 10 billion yuan. In the previous five years, it was 17.1%. After removing the impact of the previous few months, in the fourth quarter of 2025, the effective tax rate of the company that has been adjusted is 20.2%. In the previous five years, it was 20.1%. Finally, regarding the progress of the adjustment, it has increased by 7.29% throughout the year. But due to our large-scale repurchase and resale in the past year, our revenue per share will increase In Q4, the growth was 9.4%. The annual growth was 8.0%. From the point of view of operating capital, at the end of 2025, the company's stock turnover was 100 days. Last year, it was 91 days. China's domestic stock turnover was 74 days. Last year, it was 75 days. So the domestic stock turnover has improved. The overseas stock turnover was 228 days. Last year, it was 187 days. The growth of the overseas supply chain is, on the one hand, a strategic preparation to meet the US tariffs, and at the same time, the local materials of our existing overseas market are also affected. On the one hand, the local materials can effectively balance the supply chain pressure and ensure the abundance and growth of the product. On the other hand, in the future, based on the current situation overseas, the dynamic adjustment of the supply chain will be optimized. By the end of 2025, the stock market's cash reserves had reached 7.1 billion yuan, which is still very significant. In 2025, the amount of cash flow generated by our business activities is 26 billion yuan, which accounts for nearly 90% of the total net profit of the year. This reflects our business's resilience, high-quality profit, and strong ability to create and learn. Our capital allocation strategy will continue to balance the growth and return of available and predictable returns. In 2025, we will buy back 1.4% of the total return, and will continue to sell. You can see it every day in the 25th year. We have released more than 200 copies in the 25th year. We made a strong return on the long-term internal value of the management team. In the whole year of the 25th year, the return we gave to shareholders was 19.1 billion yuan, which accounted for 66% of the annual net profit adjustment, including a return of 5.5 billion yuan and a cash inflow of 13.6 billion yuan. At the same time, today, the board of directors also approved a new round of end-of-year bonus. The amount is 8.1 billion yuan, which is 50% of the net profit of our second half of the year. It is expected to be paid to our shareholders in April this year. Finally, it is the balance and our outlook on the year. Looking back at the past five years, the financial performance of MINISO Group is very good. During the five years of 2021 to 2025, the total income growth rate of the Group reached 21%, The net profit growth rate has been adjusted to 40%. By 2026, we expect the total profit growth to be double. This means that the net profit growth in the past three years is not lower than 22%. Compared to the past five years, we still have a slightly faster growth. In 2026, our important markets, such as China and North America, will continue to maintain the first-largest health growth. There are 510 to 550 stores closed every year. we will pursue the quality of opening up, not the absolute quantity. In 2026, we will continue to balance growth and efficiency, and pursue profit growth and cash flow profits. In the coming 26 years, our current management profits and net profits will grow faster than in 2025. From the perspective of profits, the net profit of Europe and the U.S. is mainly in the low end, especially Q4. Many excellent companies with net profit in Europe and the U.S. . . . . from medium-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to-high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to- high-to Because this investment brings a one-time income of 8.5 to 9 billion yuan per month. I would like to remind everyone that the management thinks that this kind of income and our stock market capital spending will affect the loss of interest, the related cost of GDP, including the loss of Yonghui. It does not reflect the interest rate of Mingchang core industry. We should start from the adjustment of the investment interest rate and the interest rate. So that's my speech. Next is the question and answer session. Thank you.

Thank you, Ethan. Now, please change your name to the organization plus name mode. And in order for more analysts and investors to have a chance to communicate, please control each question in two questions. Okay. The first question is from Michelle from Kaohsiung.

Michelle, hello. Your line has been opened. 你们好,那感谢这个提问的机会 那也恭喜公司在这个市场这么波动 我们的这个销售成长的确还是非常亮眼 那我这边两个问题,第一个还是关于国内这边。 我们去年看到这个整个运营其实更精细化嘛, 那刚刚我们也提到说这些截听销售啊, 还有这个门店网络的升级这些举措, 让我们的铜电有很好的表现。 那如果我们接下来看26年的话, 当然Ethan刚刚有给一个guidance, 那能不能再跟我们分享细一点, 在策略上怎么再去驱动推动这个铜电这边, 就是关于国内的铜电。 Thank you for your question.

I think it's very clear. There are three things. The first is good IP. We need a very good IP. Like the recent joint venture, I think it has a great impact on our income. The second is good products. The third is good experience. For good products, Now, the quality of the product, including our simple price, is on the rise. The second is to open a large store and have a good experience. This is Genie's chain series. We first launched it in the Midland 6-way store and the theme fast-food store. It achieved a pure IP experience. For example, the local fast-food store in Hengleng, Shanghai, opened its first day and created a performance of 2.2 million yuan. It also updated the single-day record of fast-food stores in 2025. This not only shows the strong appeal of the first phase of AP's launch in Luoyang, but also shows the high quality of the scene, plus the top-level AP content, which is to wait for global consumers to realize the value of AP. The value-based environment combination also plays a big role in our brand promotion. As you all know, what does Hengleng in Shanghai represent? What does Hengleng in Hong Kong represent? This Hong Kong, Hui, and Henan are very influential in Shanghai. All of them are the most high-end malls. In such a mall, you have to go in and make an IP sale. It represents the recognition of the top malls for us, the high-end consumers, and the most valuable consumers for us. Then the IP products are used to break the circle of users. The price of the customer is rising, and the recovery rate is increasing, and the supply chain is forming a strong positive cohesion. Mendelein is upgraded to an AP product to provide better display and development scenarios, especially in our outdoor store. As an AP product, Mendelein brings more accurate high-density users, which can drive the supply chain sales and continue high-quality growth. For us, the core business of AP is foreign foreign So we, these artists' cooperation with us, to promote our AP behind us, to increase the effect, foreign foreign foreign Then the second problem is that in terms of products and IP, we will continue to deepen and top-up IP solidarity and localization. On the one hand, we will continue to expand the IP income cooperation system. On the other hand, we will further expand the burst rate of high growth categories such as fur, fur, etc. You just talked about the U.S. market. What about the U.S. local market? We will optimize the SKU structure and focus on high-performance and high-performance products. We will increase the scale and create a better balance between performance and performance. In 2025, we will do a test. In 2026, I just came back from the United States and had a meeting with them. In 2026, we will carefully analyze which products will be purchased locally and which products will be purchased domestically. Domestic purchases may have higher performance. Because in 2025, as you know, due to the instability of tariffs, our local procurement will be affected by the interest rate. But in 2026, I will manage it more scientifically. Now the distribution of tariffs should be over. So we will be more sure about which local procurement, which Chinese procurement, domestic procurement. Finally, I just talked about the interest rate issue. We want to be in the procurement section, in the financial section and in the general procurement section. . . . Thank you, Mr. Ye. The next question is from UBS. Samuel, your line has been opened.

Thank you for the opportunity to ask a question.

I'm Samuel from UBS. I have a few small questions. One is, Mr. Ye just mentioned IP. I'd like to ask about some of the progress of our free IP, including whether we have any plan sales targets in 2026, and some strategic plans. Other key third-party IPs, are there any new ones that you can share with us? The second question is about the overseas market, that is, the Mexican market. We also see that in 2025, the Mexican market will be challenged. What do we think about the prospects of the Mexican market in 2026? Finally, I would like to ask, the manager just mentioned that we have invested in an AI company. I don't know if it is convenient to disclose which company it is. Thank you.

Okay, three questions. I'll answer the first one first, okay? Youyou, in 2025, we should say in the second half of the year, it will start to release products. In less than half a year, the sales will break through 100 million. Then I tell you, from January to March of 2026, only Youyou's products have sold 1.65 billion, which is about 50 million a month. According to this trend, Only domestic yoyo products, in 2026, we will sell 6 billion, plus overseas, I think yoyo products, in 2026, should sell 8 to 10 billion, it is possible to enter the 10 billion club. This is our yoyo's global sales, beyond our imagination. Yoyo is also a Chinese IP, all Chinese IPs, including the IP you see, all IPs, our yoyo is the first one, this one, over a billion, from birth to over a billion, only for half a year. You don't have an app in China right now, including what you can see outside. It's a very good app. It's not as fast as it used to be. It fully proves that in terms of the operation of the product's app and our other app operation capabilities, once we recognize the target and we turn this direction, we will progress very quickly. In terms of product development, we will continue last year's iPhone Box. to build the successful logic of the product structure in the market, and monitor the growth of the AP with a level of innovation. The three-generation products of Yoyo have achieved very outstanding performance. The first generation of Yoyo is the most popular among users. At present, the average price of the series is still within 400 yuan. The demand for the three-generation products continues to go far beyond our estimate. At the same time, we have always been clear about the perspective of selling only to AP. We value the health development of AP and long-term value. We will not invest in AP's vitality for a short period of time. Then YoYo26 will definitely be a year of its glory. Because our YoYo will soon have a lot of products that will appear in alliance with international AP. The alliance of all international AP. For example, the AP of Disney family will give us YoYo alliance. This is also the phenomenon of our free IP being able to cooperate with international IP. At present, we have signed and completed 30 to 40 free IP control lines. We have now prepared 30 to 40 IPs. There are Korean, Japanese, and Thai. Yes, there are all over the world. Among them, Kumaro, Qipao, ChouChou, and many others have already completed their innovative design and pre-preparing for product landing. They will meet with consumers in the future. We hope that through these series of arrangements, we can completely subvert the market's awareness of the product opportunities for premium and premium products, and achieve the bulk IP that more people need. On May 17th, our first secret gallery opened in Shanghai. This is where our first, and also a new, positive artist was shown. This artist's paintings sold tens of millions, so he's a great artist. So when our first secret gallery opened, we signed with more artists to work with us. Then the success of the success of the success of the success of the success of the success of the success of the success of the success of the success of We've been in the retail industry for many years, and we've accumulated the world's leading product development capabilities. We can quickly transform a creative IP, that is, an image IP, into a core system that includes both. Secondly, we stick to the flow of product landings first, so that the IP has a soul first, has user sympathy first, and then completes the value landing through the product, instead of counteracting it. So we are now getting more and more familiar with it. The third one is that we built it from the front-end initiative to the back-end supply chain, and then to the full chain of power channels. We can quickly meet the needs of the users and complete the product replacement. This set can be used as an IP recovery logic. It is also the logic of our family that can significantly achieve the core support and underlying logic of the retry IP. This is the three core components of our MISO LAN, the world's leading product development capability, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, the potential of the AP, You see, in Hong Kong, there is a store in Tula Bay. At that time, we didn't have our own IP. At the door of that store, Disney must put a dead body on the door. Next month, we will take this dead body down and put it in the bathroom. Whether it's Disney or this international IP, it is very important to experience the appearance and experience of the IP image of the store. This is the advantage of 8,000 stores around the world. So there are these things that consumers can see, touch, and go to the store with them, and they can take pictures and play cards. This kind of exposure is the most effective for consumers, the most effective, and the most effective for IP promotion. So the third one is about everyone's concern about third-party IP and free IP layout. I think our point of view is three words, nine words, multi-IP, multi-products, and globalization. Multi-IP means that We have to talk about international copyright IP and free IP. Our future is 50-50. Because I think international free IP has its advantages. Because it has movies, it has content, and it also has its sponsors and explosive power. So free IP has the benefits of free IP. Free IP has scarcity. If we have free private products, others don't. So I think international IP plus free IP's integration It's the most perfect business combination. It's a double-edged sword. I think business will be more stable. There will be more popularity. For example, our recent alliance with Genie. Look at everyone. All of the small companies and friends are their allies. The popularity is very high. That is, if we only do this kind of IP, without this, I think our popularity is lacking some things. But I think more IP, more products, It will be a great help to our experience, the experience of users, and the stability of performance. From a long-term perspective, we don't want to look at the short-term. From a long-term perspective, we have a multi-AP strategy. The third AP plus the layout of our fifth AP is a very environmentally friendly. I don't believe everyone will look at it two or three years later to verify what I said. Up to now, the IPs that we have signed up for, the IPs that we have signed up for, the IPs that we have signed up for, the IPs that we have signed up for, the IPs that we have signed up for, the IPs that we have signed up for, the IPs that we have signed up for, The third-party IP will be superior to the third-party IP in terms of user-driven traffic, as well as content marketing, which will bring us very good supplementary effects. The two sides have formed a strong co-operative partnership, which allows our IP related business to continue to grow in high quality. This is because of the influence of Microsoft NAND, many international IPs are willing to take the initiative That's what we're going to do. But we're going to do it again. You know what? You know what? You know what? You know what? You know what? It should be the top 30 markets in the world in the future. And Mexico... When I went there, I told their general manager face-to-face. I told him that the Mexican market should be like the Chinese market. We need to upgrade the brand. We need to develop the paradise store. We need to organize all the top 100 stores in Mexico. These 100 stores will be run by Michelin and France. They will be run by more than 800 stores. To open this store, I think Mexico's performance will bring a huge explosion. Because in Mexico, we went to the market, there are 100 factories in Mexico. There are good factories in the factories. And the situation in Mexico is very similar to China. Their human resources GDP and consumption structure are very similar to China. Its artificial cost is slightly lower than that of China. And it's not like e-commerce. E-commerce is very backward. It is a gold highland under development. So we hope to turn Mexico into the benchmark market of Latin America. When the performance of Mexico and the AP market are played out, Latin America will take it all. So we are full of confidence in Mexico. And we have a lot of hope. We also believe that we will put a lot of effort into the benchmark market of Mexico. to build this market. So we are very clear about the market in Mexico. The growth of the supply chain, including the future imagination, is very large. The fourth is that Mexico, as well as our Mexico, in the first quarter of this year, the growth of high-end companies, I think Mexico has not yet begun to exert force. It is the old business model, the old model of telecommunications. If we follow my idea, we will see that there are four stores, . . . To this street Because Mexico is the backyard of the United States Americans go to Mexico to travel When you get to this street You must buy some unique and different products So we found that Mexico has a lot of opportunities We found that Mexico has a lot of good malls A lot of places for tourists Also use the old goods Japanese small products will definitely not work We are talking about this All need to be changed Luoyan store Frenzy store Mainly to sell IP Sell grass . . . . Fourth, you asked about our investment. We were very lucky to invest in a very good company, an AI company, which is Minimax. Because at that time, Minimax's operations in our company were very good. And we wanted to expand and cooperate more deeply. We invested in it. We invested in it at a very low level in the early stage. So the return is still good. The main thing is this Minimax project. I'll stop there.

Thank you for the three-second question. Due to time constraints, we may need to limit the number of questions to one person. Next, please welcome Ren Bo from China. Ren Bo, you are now live.

Hello, Mr. Ye and Mrs. Yi. Thank you for this opportunity. I'm Yang Runbo, an analyst in the middle company. It's still a small problem. Because we saw that in 2025, Yonghui still has a little bit of a loss for us. So I would like to ask Mr. Ye, what new thoughts and plans do you have for Yonghui?

First of all, I would like to explain to the shareholders of the private sector that I am the most concerned about the core business. It's always the private sector. This is our foundation. It is also the core of our future to continue to work hard to achieve growth breakthrough. It is also a key step for Misao to become a great enterprise. So don't worry, I have more than 90% of my energy in Misao. Misao will always be my top priority, the highest job, and it will never be because of investment. As for Yonghui, Yonghui has already completed the management team adjustment. also officially hired Mr. Wang Shoucheng to be the CEO of Yonghui. Under his leadership, Yonghui has its own complete management team, which is already able to independently take charge of Yonghui's daily operations and strategic development. For Yonghui's future, we think everyone should take a long-term view and be full of confidence in this business. Then Mingchang is still the core business of myself. It is also our development, growth, Okay.

Thank you for your question, Renbo. Next, we have a question from Huatai. Huatai, Shidi, your line is open.

Okay, thank you for the question. I'm Shidi from Huatai. Congratulations to the company for achieving a brilliant performance this year. We can also see that the entire ecosystem operation strategy is gradually achieving its results. Mr. Ye just introduced a lot of strategies for free IP. We also saw that this year, is defined as the birth year of the original IP in 2026. So I would like to ask Mr. Ye if he can give us an in-depth interpretation of what the operating structure of the original IP is like. And in 2026, what are some of the things that are worth looking forward to in terms of the pipeline and some of the supporting operating transmission measures?

Thank you. We defined the birth year of the company's original IP in 2026. The first step is . . . . . . This is the strongest person in the company, the most capable person to do this business. So everyone can see our importance for this business. It must be this DeLocke said, this company management, in the transformation of new business, many people use new people to do new business, this is very dangerous. The company's determination for new business, and whether the company is willing to use the company's most capable people, the strongest team to do a new business. And we are using the company's most powerful team, the most capable people to take charge of this new business. And this business is completely independent, a new BG business. From the team configuration, we have already completed the product management, creative design, and three core positions of the product management, as well as specializing in CMF, We are also one of the few Chinese companies that have entered the material development center. In other words, we are now not only in terms of IP, but also in terms of product design, in terms of product materials, we have entered this development. From the source of the supply chain, the product landing of IP, the product innovation ability, and the quality of the product, for the long-term development of IP, This is our 25th year. In the second half of the year, we have invited many experts from outside, fabric experts, material experts, to set up our CMF, which is the Material Research Center, in the nearest place of the factory. In terms of operation and transmission, we will build up the influence of the global super AP in a diversified way. For example, we will participate in the International Art Expo and Fashion Week. For what I've just said, on May 17, the first Mitchell Gallery opened in Shanghai, one of the best art centers. This is also a sign that we have a higher status in the eyes of artists. Mitchell has its own gallery, and we not only have one today, but we will soon have one in Hong Kong. One in Huazhen, one in Huanan, because Hong Kong is a global artist center in Asia. We will establish foreign foreign 表情包短视频和二次创作你看小优优小红书上大家看小红上大量的优优的这个二创这也是我们首创在二创领域里面AP里面又有排第一位的大家可以小红书去看看对啊粉丝非常活跃所以我们第三个我们在Metal Land设计了AP主题专区将线上声量转化为线下体验 and actual sales. We are also in Guangzhou, Shanghai, at the Michelin restaurant, we have opened an artist street. This project is about 50 square meters. We will let new artists, young artists, many products, to show and show in this street, interact with consumers. This is also our first creation. Then through these, we will increase the production of original IP, create this ecological building, This is our specific approach to IP. This is what we are doing now. I think with our business capability improvement, not only will we have new ideas and new approaches,

Thank you, Mr. Ye, for sharing. Next, Jeffrey's question. Anne, you have the line open.

Please take a look at the number of questions. Thank you. Okay, thank you. Mr. Ye, hello. Hello, management. I want to ask you a question. I want to ask you a question. What is the current situation of our power supply? What is the current situation of our power supply? Thank you.

In the past 12 months, our growth logic has been very clear. First of all, it is based on the growth of copper electricity sales. Then, with the expansion of high-quality open new electricity, these two are jointly promoted. First of all, in terms of copper electricity sales growth, in 2026, our goal is to achieve real growth of copper electricity worldwide. This is a very challenging goal, but we have a way to achieve it. Why? Because we still have a lot of overseas leading stores. It's very, very difficult to prove that you want to manage a leading store. But I believe that through a very good plan and quality, we are confident. In terms of opening, we have just said that we plan to compete with 501 to 550 stores worldwide. China and overseas are both driving. Then the proportion of overseas stores is improving. In terms of the Chinese market, we plan to compete with 120 stores in 2026. The new stores are mainly in Lexi. or large stores. At the same time, we can do some heavy-duty exchange, close small stores with low cost, and promote heavy-duty circulation. So in fact, in 2026, you can see that in China, in addition to the growth of heavy-duty stores, in 2025 to 2026, we will open some high-quality new stores, and we will continue to contribute some high-end growth this year and next year. So you see, in fact, the Chinese market, we are planning to increase this year. There is a very good growth, but we only need 120 stores to open. That's enough. The overseas market, Our 26-year plan is to build 350 stores, mainly covering Europe, the United States, Southeast Asia, and Latin America. We will use the 3.2 method of regular high-end stores. Especially, as Mr. Ye said, we are going to enter the global top business circle in the overseas core market. If we look at the North American market, we have announced that the growth of the same store in the U.S. in January and February has exceeded 20%. We will accelerate the power outage in 2026. The operating profit of the U.S. is expected to continue to improve. Such an improvement of the first position should be a pity. In Europe, in 2026, we saw the growth of the power supply reach the double position. The power outage is also advancing steadily. Especially in some markets, there are some famous stores. For example, in Poland, we opened two stores that are very, very efficient. The main party is Chao Wan. This efficiency is very high. Very profitable. But in Europe, there are also four other leading markets. These are still in a relatively early stage of investment. We hope that its OOP margin will gradually improve. In Mexico in 2026, we saw that the share price was double. We hope that Mexico's share price will continue to grow throughout the year. Under the代理模式, the profit margin of this market has always been very stable. Southeast Asia now has some challenges. But the core of this business model is globalization. No matter which markets in the world are challenged, we can always diversify our entire business investment combination. So Southeast Asia is a bit of a challenge. But we hope that the supply and demand will gradually turn around. We focus on the core market, for example, corn. We focus on the high-quality point for opening up. Overall, the supply and demand rate of the major markets is a relatively healthy one. Thank you. Thank you, doctor.

Thank you for your question. My question is about Southeast Asia.

Southeast Asia is the first stop for us to get out of the sea. Thank you. Let me answer this question. I think the 265 will have a huge adjustment in Southeast Asia.

China. China. China will be very successful when we go to Southeast Asia, especially when we go to Indonesia. Our Malaysia has recently opened a grocery store. The performance is also very good. So in 2026, we will take China's way of fighting to Southeast Asia. These core markets will be adjusted in 2026. In the first half of the year, in the second half of the year, Southeast Asia will have a good turning point. So everyone, Okay, thank you for your answer, Mr. Ye. We have no more questions.

Okay, thank you. Next is the last question from Changjiang Securities.

Mr. Qin, you have the floor.

Okay, thank you for the question, Mr. Ye. Hello, Mr. Ye. I'm Qin Yang, an analyst at Changjiang Securities. I'd like to ask about the strategy of changing the old store to a new one last year. Can you share with us a strategy for this year, and how will the door-to-door rhythm and the current door-to-door effect be changed this year?

In 2025, we completed the adjustment work of about 290 stores. From the results, the effect is very significant. With the adjustment of the store, the average sales increase increased by 40% to 50%. This increase is not a single factor, but it is the current flow, the flow rate, the conversion rate, and the price. In total, these three aspects have a total limit. At the same time, the sales ratio of the rent The proportion has dropped significantly. The number of people and the number of schools has also increased significantly. The profit and loss of the single-storey store has improved significantly. And the key is that our brand, last year, the brand of Michelin got the recognition of the fake house. Now the fake house is very willing to give us a better position, a better position, a bigger position, so that we can open some open-air stores, Super Michelin, Qijian store, Zhenxuan, Mingcheng. In this way, the store is bigger, the product is richer, the position is better, and the rent is cheaper. With the outbreak of our free IP in 2026, you can see that we have a lot of good stores now. They are willing to take the best position for us to do the U.S. level, do the U.S. level of IP. Now China, including our two companies, can have free IP, can do the U.S. level. It also shows our scarcity. And now we are more and more influenced by the fake side. So in 2026, we will speed up the reform, speed up the reform, take some bad electricity, It will be optimized faster and have a better position. I think the year of 2026 is a year of acceleration and change. It's even more of an acceleration and change year. I talked about it. In the next 80 years, 80% of our stores will be replaced by other stores. They will be replaced by other stores. And with the rapid development of our free app, our stores will be more unique in the future. There will be more differences. In the eyes of the fake, it will be more influential. It will get better business conditions. In this way, our domestic performance will grow.

Thank you.