Ladies and gentlemen, thank you for standing by and welcome to MINISO Group Holdings Limited's earnings conference call for the third quarter of fiscal year 2021 that ended March 31st, 2021. At this time, all participants are in a listen-only mode. After the management's prepared remarks, we will conduct a question-and-answer session. Please note this event is being recorded. I'd like to hand the conference over to your host speaker today, Mr. Eason Zhang, Director of Investor Relations. Please go ahead, Eason.
Thank you, Jason. Hello everyone, and thank you all for joining us on this call. The company has announced its quarterly financial results earlier today, and the earnings release is now available on our investor relations website at ir.miniso.com. Today, you'll hear from our Chairman and CEO, Mr. Guofu Ye, who will start the call with an overview of our business. He'll be followed by our CFO, Mr. Steven Zhang, who will address our financial results in more detail before we take your questions. Before continuing, I'd like to refer you to the safe harbor statements in our earnings press release, which also applies to this call, as we will be making forward-looking statements.
Please also know that we will discuss non-IFRS measures today, which we have explained and reconciled to the most comparable measures reported under International Financial Reporting Standards in the company's earnings release and filings with the SEC. During the Q&A session, please repeat your questions in Chinese if you ask in English. Management will answer in Chinese, and I will translate in English. With that, I will now hand the call over to Mr. Ye to give you a business update. Please go ahead, sir.
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Hello, everyone. For the March quarter of 2021, MINISO recorded a revenue of CNY 2.23 billion, up 37% year-over-year and in line with the company's guidance. Our domestic business delivered a combined revenue of CNY 1.79 billion, up 75% year-over-year and 12% compared to the same period of 2019. In today's conference call, I share the major developments we have achieved for both MINISO and TOP TOY this quarter.
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For MINISO, our domestic operations continued to deliver an encouraging recovery this quarter. While occasional cases of COVID-19 in early January resulted in shutdowns for certain stores, we took a number of measures and launched a series of new products in the following months to achieve a healthy recovery. As a result, domestic operations of MINISO brand recorded revenue of RMB 1.72 billion, up 71% year-over-year and 12% compared to the same period of 2019.
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We added 44 new MINISO stores in China during the quarter, with more than 90% of new stores located in tier-3 and below cities. During the past 12 months, we made significant progress in executing our strategy to penetrate into lower-tier cities, with 70% of new stores located in tier-3 and below cities. We noted that nearly all key operating metrics for MINISO stores, such as average ticket size, conversion rate, and cross-selling rates are similar in lower-tier cities with Tier 1 and tier-2 cities. Revenue and expenses are more attractive, providing a better ROI for our retail partners in the long term. As of March 31st, less than 14% of our stores were located in lower-tier cities. As lower-tier cities account for more than 70% of China's GDP, nearly 60% of GDP, and contributed two-thirds of the country's economic growth. Going forward, we see a lot of opportunities in lower-tier cities and will continue to unlock new market opportunities there.
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As for overseas operations, revenue was RMB 441 million, down 28% year-over-year and 5% quarter-over-quarter. During the same period of previous year, COVID had not fully erupted. However, during this quarter, many countries have experienced major setbacks on the path to pandemic recovery, especially in Southeast Asia and Latin America, where many of our overseas stores are concentrated. In these areas, many countries have continuously reported new records in case numbers and have adopted stricter control measures. By the end of March, 228 overseas stores were temporarily closed, and many others were forced to reduce business hours due to the impact of COVID-19, resulting in the year-on-year revenue decline.
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Less than that, we have made encouraging progress in our overseas market expansion. The number of overseas stores increased by 29 in this quarter, surpassing the net increase of 20 in the same period in 2020, demonstrating our overseas partners' confidence in the brand's long-term capacity. The net increase in new stores came mainly from countries in the Middle East and Europe, where the pandemic recovery went well. This includes Spain, where we opened six new stores during the quarter. In January, MINISO opened its first store in Porto, the second largest city in Portugal, which was the 94th overseas market we have entered.
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The mission of MINISO is to provide global consumers with high-quality and affordable lifestyle products. In this quarter, we continue to focus on product and innovation. I'd like to share additional details on this front.
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First of all, in product development, we focus on strategic new categories. In this quarter in China, sales of strategic new categories such as toys and snacks increased significantly year-over-year. Specifically, sales of toys were up nearly twofold year-over-year, in which building blocks were up more than threefold. Sales of snacks were up 104% year-over-year, in which sugar candy sales increased by 168% year-over-year.
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Second, we kept innovating our business. Take our first event store, Fashion Mask store as an example. It sells in a single day exceeded CNY 10,000, which is a very encouraging number for a vertical retail store, and provided us with confidence and experience in expanding event stores in other categories, and will translate this new successful business to other cities in the near future.
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Let me give you another example. During the pandemic, we proactively leveraged innovative ways such as live streaming to distribute merchandise to overseas partners. That's been proved to be quite effective in promoting the recovery of overseas business. The two live streaming events in this quarter generated revenue of CNY 150 million.
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Third, we strengthened our IP advantage by successfully launching products with new IP partners such as Chip 'n' Dale, Tsum Tsum, Heaven Official's Blessing, and Bilibili during this quarter. So far, we have fully covered six major IP sectors such as Global Trendy IPs, ACG IP, Chinese traditional IPs, creative art toys IPs, sports and gaming IPs, and have solidified MINISO's position as a leading IP player in the industry.
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On the operational side, we have been dedicated to improving the efficiency of MINISO stores by introducing information systems and retail tactics during the past several years. For example, the average number of employees per store in China dropped from ten a few years ago to six in the last quarter, and dropped further by nearly 10% during this quarter, effectively reduced the cost burden of our retail partners.
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MINISO's omni-channel strategy continued to be well executed actually during this quarter. We continue to reach and activate members through various ways such as private traffic operations and give incentives such as coupons and WeChat Mini Program to improve retention and repurchase rate of members. As of March 31st, members who had made at least one purchase during the past 12 months were about 30.2 million, an increase of 2 million sequentially and nearly 8 million from the end of June 2020. As a result of the above-mentioned measures, revenue contribution from online channels exceeded 10% for the first time in this quarter. The e-commerce contributed RMB 171 million, or 7.7% of net revenues, and O2O contributed about RMB 17 million, or 3.1% of net revenues.
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I'd like to share more about TOP TOY. As the first new business incubated on the X strategy, this is TOP TOY's first full quarter. We continue to see healthy trends in each aspect of its operation, including optimization of its economic model, expansion of product categories, improvement of omni-channel strategy and positive initial results of IP strategy.
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The first DreamWorks store, TOP TOY, has been in operation for five months. Our team has been refining its business model. So far, we have opened four DreamWorks stores, each of which has created a very good opening performance among peers, giving us great confidence in the success of DreamWorks stores. At the same time, we are also testing smaller stores such as collection stores as well as flash stores, and will continue to review TOP TOY's operations on a dynamic basis, and will provide more updates on next quarter's call.
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TOP TOY is committed to building the world's largest and most comprehensive collection shop of art toys. To achieve this, it has been adopting a multiple category strategy to expand addressable market of art toys while reducing reliance on any single category. In this quarter, we added sculptures as the eighth category of TOP TOY to enrich its product line. Garage kit, building blocks, and assembly Gundam were three rising categories favored by consumers during the quarter, and their revenue contributions continued to increase. Far, TOP TOY has about 2,500 SKUs, increased from 1,500 when it got started.
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In terms of channels, TOP TOY has been building its omni-channel capabilities since day one. Today, it covers 15 cities in China with 25 offline stores. Meanwhile, it plans to open robot shops and the first overseas store within this year. In terms of online channels, it has accumulated more than 300,000 members in its WeChat Mini Program. In addition, it opened its Tmall flagship store in late April and will cooperate with other e-commerce giants such as JD.com and Douyin to open more stores.
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On April 28th, TOP TOY held a themed branding event in Shanghai to introduce its proprietary IPs such as Twinkle, Tammy, and Yoyo. I'd like to take this opportunity to share TOP TOY's IP strategy. We estimate 30% from TOP TOY's products will be through self-owned IPs or through cooperation with IP partners, and the other 70% will be through third-party IPs. Proprietary and exclusive IPs, because of its originality and uniqueness, are much easier to communicate with fans. They have high gross margin and enable TOP TOY to build competitive advantages. To focus on IP development, TOP TOY has cooperated with nearly 300 designer and supply partners, including talented designers such as Kow Yokoyama, Japan's top designer.
The March quarter was MINISO's first full quarter as a public company. We have experienced accelerating recoveries in domestic operations and profitability as we continue to focus on product innovation. TOP TOY continues to achieve new milestones as we continue to sharpen our business model, products, sales channels, and proprietary IPs. Looking forward in 2021, MINISO will continue to penetrate further into China's lower-tier cities by opening more stores and capture greater market share in these high ROI regions. Meanwhile, we will continue monitoring the pandemic recovery in overseas markets carefully and rapidly adapt our expansion plans as necessary to embrace its recovery.
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This concludes March quarter business updates. I now turn the call to Steven for financial results.
Thank you. I will start my remarks with a review of March quarter financial results and then provide additional color regarding the June quarter. Please note that I will be referring to non-IFRS measures, which exclude share-based compensation expenses. Revenue was CNY 2,229 million, representing a year-over-year increase of 37% and a quarter-over-quarter decrease of 3%.
The year-over-year increase in revenue was driven by the recovery of our domestic operations, which increased 75% to CNY 1,788 million. Within our domestic operations, revenue of MINISO offline stores was CNY 1,544 million, increased 69% year-over-year. Revenue of e-commerce was CNY 171 million, increased 86% year-over-year. In overseas markets, revenue declined by 28% year-over-year as compared to a decline of 51% year-over-year in the previous quarter. The quarter-over-quarter decrease was mainly due to seasonality and the influence of pandemic. Our business is subject to seasonal fluctuation, typically with a strong performance in the December quarter than in March quarter. However, we took several effective measures, such as launching more popular products, to boost sales and penetrating further into lower-tier cities in China in this quarter.
The sequential decline of revenue was only 3%, compared with the sequential decline of 11% in March quarter 2019, which represented a normalized seasonality before pandemic. Gross profit was CNY 627 million, increased 19% year-over-year, and decreased slightly quarter-over-quarter. Gross margin was 28.1%, the highest in the past four quarters since the outbreak of pandemic, showing a positive sign of our continued business recovery. Gross margin was 32.4% a year ago and 28.0% a quarter ago. As we have explained in last quarter, the fluctuation in gross margin was due to change in our revenue mix. The year-over-year decrease was due to a decrease in revenue contribution from our more profitable overseas operation, which was 19.8% of net revenue in this quarter as compared to 37.3% a year ago.
The sequential increase in gross margin was mainly attributed to an increase in revenue contribution from our high-margin online channels, such as e-commerce and O2O in this quarter, despite the decrease in revenue contribution from our overseas operation, which was 20.1% of net revenue a quarter ago. Selling and distribution expenses were CNY 275 million, increased 18% year-over-year, but decreased 10% quarter-over-quarter.
The year-over-year increase was attributed to increased logistic expense, which was in line with the recovery of our business during this quarter, and the increased marketing expenses as we continue to strengthen brand recognition for MINISO and TOP TOY. The quarter-over-quarter decrease was primarily due to the decrease in marketing-related expense and personnel-related expense, such as payroll and travel expenses caused by seasonality. G&A expense was RMB 157 million, increased 29% year-over-year and flat quarter-over-quarter. The year-over-year increase was primarily due to increase in personnel-related expense and IT expense. We took measures to reduce G&A expense when the COVID-19 pandemic broke out during the same period of 2020, such as trimming down the personnel-related expense and IT expense, resulting a low comparison base for this expense. Turning to our profitability. Operating profit was RMB 161 million, increased by threefold year-over-year and twofold quarter-over-quarter.
The year-over-year improvement in operating profit was primarily due to our business recovery in China. While the quarter-over-quarter improvement was due to the reduction in operating expense and other net income or loss, which was a loss of RMB 55 million in the previous quarter, but an income of RMB 8 million in this quarter. Adjusted net profit was RMB 149 million, increased by 10% year-over-year and 77% quarter-over-quarter. Adjusted net margin was 6.7%, the highest in the past four quarters since the outbreak of pandemic, compared to about 8.3% a year ago and 3.7% a quarter ago. Basic and diluted earning from continued operations per ADS were both $0.40 compared to $0.76 a year ago and $0.08 a quarter ago. Adjusted basic and diluted earning per ADS were RMB 0.52 compared to RMB 0.44 a year ago and RMB 0.28 a quarter ago. Turning to our balance sheet.
As of March 2021, the combined balance of company's cash equivalents, restricted cash and other investments were RMB 7 billion, compared to RMB 6.9 billion a quarter ago. The increase was primarily due to the cash flow generated from the operation. Turning to working capital, the turnover of inventories and trade receivable remained flat sequentially. Looking ahead into June quarter of 2021, we expect our total revenue to be between RMB 2.3 billion and RMB 2.5 billion, which represent an increase of 48%-61% year-over-year. As we continue to operate in a time of significant uncertainty in regards of the timetable of pandemic recovery in our overseas market, we remain cautious in our sales outlook in this market.
We are encouraged by our efficient working capital management, steady recovery of gross margin, disciplined investment and expense in the new business, all of which has laid a solid foundation for us to deliver consistent, strong financial performance and long-term shareholder value. This concludes our prepared remarks for today. Operator, we are now ready to take questions.
Thank you. We'll now begin the question-and-answer session. Our first question is from Michelle Cheng from Goldman Sachs. Please go ahead.
[Non-English content] I have three questions for management.
First one is, the company introduced the new retail platform strategy. We successfully developed our TOP TOY. Can management share the thought about the future development and also what experience we can learn from TOP TOY development? Second question is about the overseas recovery. On one hand, we control the inventory and also the expansion. Have we reviewed the overseas distributors, financial situation and the business environment, and how this will impact our expansion in the future? Thirdly, for the domestic business, we have been expanding aggressively in the lower-tier city. Can you share with us for those stores opened in the past few quarters operational situation and also how do we see the business opportunities in the lower-tier city going forward? Thank you.
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Okay, Michelle, thank you for your question. For your first question on app strategy, we certainly have some ideas and new categories. TOP TOY has gained preliminary success at this moment, and we are actually in the planning and preparation process of what new categories and fresh up more what we have at this moment. Thank you.
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Okay, Michelle, for your second question. For the overseas, I think these questions need to be analyzed case by case. We had more than 1,700 overseas stores by now, and in terms of overseas distributors, the top 10 distributors accounted for more than 60% of our overseas stores. The concentration is quite high and stable. For these big distributors, they absolutely are comfortable at this moment. Outside they are very strong in cash position, in shareholder structure and in their cost control. Our judgment is that there is no big risk for these big distributors. For the smaller ones, absolutely some of them will face even bigger difficulties. As we shared before that, we now have 80 distributors in our overseas markets. Certain distributors' financial difficulty will not influence the whole big picture of our overseas market.
If you look at the past performance of our overseas business, no matter in revenue or in net income, I think the most difficult time has passed. We even see in some overseas markets, some distributors are accelerating their pace of expansion, such as Italy and Portugal, which we have entered during the first quarter and second quarter this year. For example, Spain, this country alone has opened six stores in the first quarter. So that's the answer for your second question
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For the questions on lower cities. First of all, we think MINISO's product and our business model are both very competitive in lower tier cities. As Mr. Ye mentioned just now, the key operating metrics such as average sale price, cross-selling rate and conversion rate, they are very similar with the high tier cities. In terms of addressable market, as of today, MINISO has entered about less than 300 cities in China. If you look at the tier- 3 and below, there are 270 more in China, not to mention the tens of other countries in China. The addressable market is big enough.
In terms of ROE, we have been continuously monitoring the past year as we discussed before that in lower tier cities the revenue may not as high as in the first tier cities. A typical store there can generate sales of CNY 3 million-CNY 4 million annually, the rental cost can be controlled within 8% of sales. The payback period can be as short as in six to eight months. It's very similar to MINISO's first stage in the 2013, thank you.
The next question is from Lucy Yu from Bank of America. Please go ahead.
[Non-English content] The first question is about membership.
We have accumulated members for a while. What we have learned from this big data, and how are we going to more utilize this data to help with our operations? Second question is about the GMV recovery in China and overseas market in April and May. How should we think about the recovery trajectory for the second half? Third question is about TOP TOY. What's the store opening plan for this year as well as more operating metrics? Thank you.
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Okay, Lucy, thank you for your question. For your question on members, as we shared that by the end of this quarter, we have accumulated 30.2 million m embers, and we have using various ways to outreach and activate them. We have some figures to share. In terms of average sales price, the members were double of that of non-members. In terms of repurchase rate, ordinary customers on average, they come and buy for 1.5 times each year versus three times of members. As Steven added that, we have realized the important role that members have taken in our improvement of our business. Understanding of the importance of members have been improving during the past year, and we'll make more efforts to improve that.
For example, we have managed our members in different stage in their lifecycle, so that we can carry out more targeted marketing to outreach and keep them, and increase the retention and repurchase rate of these members.
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Let me quick update our business in China and overseas market. In April and May, we have two public holidays in China, so we can see very strong sales increase during these two holidays. After the holidays, we can see a quick decrease and get to normalized of the sales. We believe that in China, the pandemic influence is still there, so the overall recovery is still at 95% or so. In overseas market, by the end of last month, by April 30th, the overseas market as a whole is a little bit worse than we were in the end of March. We have more than 300 stores were temporarily shut down because of the stricter control measures by the relevant countries. For those stores in business, the sales recovery rate on average were 5% lower than in last month.
If you look at the second half of this year, we see stable growth and stable recovery in China, unstable situation in overseas. The pandemic recovery for overseas market is still way too soon. For example, in India, where we have 150 stores, as for now, 90 of them cannot open. For some developed countries such as the U.S., where the vaccine injection is quite privileged, we actually see a good recovery of the several chains. In U.S., we now have only more than 30 stores, so the influence is quite insignificant for overseas market. Thank you.
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In terms of TOP TOY, in terms of the expansion plan, we have no big change with our last update. We maintain our guidance of 90-100 stores by calendar year end. In terms of economic model, it is continuously being refining. I want to share our four DreamWorks stores. The monthly sales of each has been quite stable at CNY 2 million a month. We are also testing our Type B stores in which monthly sales can be stable at CNY 600,000 per month. In terms of the retail partners, we also held quite a big roadshow of our retail partners at the end of April, and we saw strong willingness of our retail partners to open TOP TOY stores. We have been receiving positive feedback and quite effective proposals from them.
There are no more questions in the queue. This concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks.
Okay, thank you again for joining us today. If you have any further questions on MINISO, please feel free to contact MINISO Investor Relations. All contact information can be found on today's press release. Let's do the next quarter. Have a good day.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.