On May 26, Meicool released its Q1 2026 financial results. The data showed that the company's total revenue reached 5.688 billion yuan, a year-over-year increase of 28.5%, exceeding the upper limit of its previous growth guidance. However, beneath the impressive revenue figures, the divergence between core operating profit growth and non-operating gains has become a focal point for the market.

1. Overall Performance: Revenue Outperforms Expectations, Profit Shows "Uneven" Growth

  • Revenue Growth: The revenue of 5.688 billion yuan increased by 28.5% year-on-year, mainly driven by mid-single-digit same-store sales growth and expansion in domestic and international markets.

  • Brand Performance: The main brand of Meicool saw a year-on-year revenue increase of 26.6% to 5.17 billion yuan; the trend toy brand TOP TOY performed strongly, with a revenue increase of 51.4% to 515 million yuan, continuing to contribute high growth.

  • Profit Divergence:

    • Profit During the Period: It surged nearly 2 times (199.7%) to 1.248 billion yuan.

    • Core Reason: The surge in profit was primarily due to investment gains from the AI company MiniMax—as the company went public and its stock price rose, Meicool recorded an approximate 875 million yuan gain from fair value changes.

    • Operating Quality: After excluding such non-operating gains and exchange gains/losses, the adjusted net profit was 633 million yuan, up 8.1% year-on-year, which grew much slower than revenue, reflecting some pressure on the core business profitability.

2. Core Contradiction: Slowing Overseas Growth and High Expenses

Although overseas operations remain an important growth engine for Meicool, the market has developed new concerns about its growth rate:

  • Slower Overseas Growth: The report shows that overseas revenue increased by 21.9%, which is slower compared to previous market expectations for high-growth regions like North America.

  • High Expenses Eroding Margins: Due to continued investment in IP licensing and the strategy of expanding direct stores overseas, the company's selling expenses increased year-on-year, leading to a 0.9 percentage point decline in gross margin to 43.3%, indicating that the company is currently in a typical "spend to grow" cycle.

  • Caution in Store Expansion: The global net addition of 80 stores only achieved around 15% of the annual target, showing a slower pace of expansion, which reflects the cautious approach in evaluating site selection and operational efficiency during the rise in direct store ratio.

3. Investor Perspective: AI Monetization and Core Business Challenges

For this quarter’s report, the market showed a certain level of caution:

  1. The "AI Concept" Fires Up: The fair value change gain from investing in MiniMax allowed Meicool to make the profit of the entire year of 2025 in just one quarter. Ye Guofu remains optimistic, believing that the company's current valuation has not yet fully reflected its intrinsic potential.

  2. Operational Challenges: Although the investment gains were significant, the fact that the core business profit growth (8.1%) lagged behind revenue growth (28.5%) after excluding these gains has sparked discussions among investors about future operational efficiency and core profitability.

Conclusion

Meicool delivered a "glamorous but challenging" result in Q1 2026. The successful monetization of the AI investment proves the foresight of the management in early-stage investments. However, whether it can regain high growth momentum in overseas markets and how to balance the cost pressures from direct store expansion to improve core profit margins will be key factors in future performance growth.