Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>MNSO reported 1Q25 rev. in line with cons. but non-GAAP op. profit 17% below and GAAP net income 33% below cons, </li>
<li>We view MNSO's store expansion as being below its bar of quality. Downside risks were not fully priced in. Our 2025 revenue/net profit forecasts are 7.0%/8.2% below consensus;</li>
<li>We cut the TP from US$16 to US$13.5/ADS and keep the SELL rating.</li>
</ul>


MNSO reported 1Q25 rev. in line with cons. but non-GAAP op. profit 17% below and GAAP net income 33% below cons, 
We view MNSO's store expansion as being below its bar of quality. Downside risks were not fully priced in. Our 2025 revenue/net profit forecasts are 7.0%/8.2% below consensus;
We cut the TP from US$16 to US$13.5/ADS and keep the SELL rating.


[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

<ul>
<li>MNSO reported C4Q24 rev.1.6%/2.0%, and non-GAAP EBIT 3.4%/2.0% below our est./cons.. What concerns us more is the quality of the growth;</li>
<li>In our view, MNSO's slow same-store-sales-growth (SSSG), overseas investment, and Yonghui's integration haven't fully reflected in the price;</li>
<li>We cut the TP to US$16 and maintain the SELL rating to reflect slower profit growth. The stock trades at 14x 25E P/E vs. a 12% 3 Yr. NI CAGR</li>
</ul>


MNSO reported C4Q24 rev.1.6%/2.0%, and non-GAAP EBIT 3.4%/2.0% below our est./cons.. What concerns us more is the quality of the growth;
In our view, MNSO's slow same-store-sales-growth (SSSG), overseas investment, and Yonghui's integration haven't fully reflected in the price;
We cut the TP to US$16 and maintain the SELL rating to reflect slower profit growth. The stock trades at 14x 25E P/E vs. a 12% 3 Yr. NI CAGR


[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>We met with the management of <a href="https://www.smartkarma.com/entities/dream-international-ltd" target="_blank" data-smartkarma-citation="entities:15783:1" rel="noopener">Dream International (1126 HK)</a> in Hong Kong. The company is riding a hectic phase with its Vietnam operations running at full capacity.</li>
<li>Management is evaluating capacity expansion in Indonesia and Vietnam for plastic and plush toy production serving China, targeting an aggregate capacity increase of approximately 20–30% to meet demand.</li>
<li>The stock has pulled back and trades at 8.9x PE, 5.1 EV-EBITDA, with a 6.2% dividend yield and 21% of the market capitalization in cash, and 10 Yr-Avg ROCE ~20%. </li>
</ul>


We met with the management of Dream International (1126 HK) in Hong Kong. The company is riding a hectic phase with its Vietnam operations running at full capacity.
Management is evaluating capacity expansion in Indonesia and Vietnam for plastic and plush toy production serving China, targeting an aggregate capacity increase of approximately 20–30% to meet demand.
The stock has pulled back and trades at 8.9x PE, 5.1 EV-EBITDA, with a 6.2% dividend yield and 21% of the market capitalization in cash, and 10 Yr-Avg ROCE ~20%. 


Dream International (1126 HK): Postcard From Hong Kong, October 2025

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>We preliminarily estimate TOP TOY may be valued at 19.1-40.3% of <a href="https://www.smartkarma.com/entities/miniso-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:36659:1" rel="noopener">MINISO Group Holding (9896 HK)</a>'s market capitalisation, though there are still a lot of moving parts.  </li>
<li>TOP TOY is doing well in FY24 with a 41.1% surge in GMV, and for 1Q25, its revenue grew by 58.9%, reflecting exciting growth prospects.</li>
<li>
<a href="https://www.smartkarma.com/entities/bloks-group-limited" target="_blank" data-smartkarma-citation="entities:43648:1" rel="noopener">Bloks Group (325 HK)</a> is a better comparable as its revenue is 2.3x TOP TOY's, but its profit is 8x. A successful TOP TOY spin-off should benefit Miniso.</li>
</ul>


We preliminarily estimate TOP TOY may be valued at 19.1-40.3% of MINISO Group Holding (9896 HK)'s market capitalisation, though there are still a lot of moving parts.  
TOP TOY is doing well in FY24 with a 41.1% surge in GMV, and for 1Q25, its revenue grew by 58.9%, reflecting exciting growth prospects.

Bloks Group (325 HK) is a better comparable as its revenue is 2.3x TOP TOY's, but its profit is 8x. A successful TOP TOY spin-off should benefit Miniso.


MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off

China

MINISO Group Holding is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable.

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Miniso (MNSO US)

[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit

MNSO's 1Q25 revenue meets expectations but profit falls short, store expansion quality lacking, downside risks not fully accounted for. TP lowered...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Blue Lotus Research Institute

Dream International (1126 HK): Postcard From Hong Kong, October 2025

Meeting summary with the Dream International (1126 HK) management in Hong Kong. Recent share pullback values stock at ~8.9x P/E with a ~6.2%...

Sameer Taneja

MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off

Preliminary estimates suggest TOP TOY may be valued at 19.1-40.3% of Miniso's market capitalisation, with strong growth prospects and potential...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit

​MNSO's 1Q25 revenue meets expectations but profit falls short, store expansion quality lacking, downside risks not fully accounted for. TP lowered...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

​MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Blue Lotus Research Institute

Dream International (1126 HK): Postcard From Hong Kong, October 2025

Meeting summary with the Dream International (1126 HK) management in Hong Kong. Recent share pullback values stock at ~8.9x P/E with a ~6.2%...

Sameer Taneja

MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off

​Preliminary estimates suggest TOP TOY may be valued at 19.1-40.3% of Miniso's market capitalisation, with strong growth prospects and potential...

Osbert Tang, CFA

MNSO's 1Q25 revenue meets expectations but profit falls short, store expansion quality lacking, downside risks not fully accounted for. TP lowered...

MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Preliminary estimates suggest TOP TOY may be valued at 19.1-40.3% of Miniso's market capitalisation, with strong growth prospects and potential...