Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a>, a Guangzhou, China, head-quartered offline-based branded variety discount retail chain that refers to itself as a Japanese-inspired lifestyle product retailer will trade in the US and proposes to raise up to USD562 mn via its IPO, listing on October 15th. With its strategy of frequent rollout of varied designs of low-value discretionary consumer products, Miniso's products have an appeal similar to fast fashion - frequently bought, mostly on impulse, and easily discarded - sans the brand power. This, along with its extensive store expansion, has underpinned the company's aggressive (pre-pandemic) growth. In the detailed note below, we discuss why Miniso's aggressive (pre-pandemic) growth rate may not be sustainable and how its business model, like its products, lacks a competitive edge and longevity. We also highlight how Miniso's operating model could be weakened if the shift in consumer shopping behavior and preferences, triggered during the pandemic, stays on.

MINISO Group Holdings (MNSO US), a Guangzhou, China, head-quartered offline-based branded variety discount retail chain that refers to itself as a Japanese-inspired lifestyle product retailer will trade in the US and proposes to raise up to USD562 mn via its IPO, listing on October 15th. With its strategy of frequent rollout of varied designs of low-value discretionary consumer products, Miniso's products have an appeal similar to fast fashion - frequently bought, mostly on impulse, and easily discarded - sans the brand power. This, along with its extensive store expansion, has underpinned the company's aggressive (pre-pandemic) growth. In the detailed note below, we discuss why Miniso's aggressive (pre-pandemic) growth rate may not be sustainable and how its business model, like its products, lacks a competitive edge and longevity. We also highlight how Miniso's operating model could be weakened if the shift in consumer shopping behavior and preferences, triggered during the pandemic, stays on.

Miniso (MNSO US): Impulse Shopper's Paradise. Not a Sustainable Growth Model.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).Previously, we discussed MINISO's business model, financials and valuation in <a href="https://www.smartkarma.com/insights/miniso-ipo-long-term-growth-prospects-secured-by-a-sustainable-competitive-advantage" target="_blank" rel="noopener">MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage</a>, <a href="https://www.smartkarma.com/insights/miniso-ipo-as-appealing-as-miniso-products" target="_blank" rel="noopener">MINISO IPO: As Appealing As MINISO Products</a> and <a href="https://www.smartkarma.com/insights/miniso-valuation-valued-like-miniso-merchandise-bang-for-the-buck" target="_blank" rel="noopener">MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck</a>.Our relative valuation indicated that there is significant upside, even at the higher end of the IPO price range. MINISO lacks directly comparable peers, hence an exhaustive relative valuation exercise may not be as reliable as we would have hoped.Therefore, we feel it is worth exploring other valuation techniques to make sure that we don’t run into unpleasant surprises.

MINISO Group Holdings (MNSO US) is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).Previously, we discussed MINISO's business model, financials and valuation in MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage, MINISO IPO: As Appealing As MINISO Products and MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck.Our relative valuation indicated that there is significant upside, even at the higher end of the IPO price range. MINISO lacks directly comparable peers, hence an exhaustive relative valuation exercise may not be as reliable as we would have hoped.Therefore, we feel it is worth exploring other valuation techniques to make sure that we don’t run into unpleasant surprises.

MINISO Deserves More Than The IPO Valuation

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).
Last week, the company filed an updated prospectus with the SEC announcing the price range for the NYSE IPO. The price range was set at $16.50-$18.50 per ADS, which translates to $4.125-$4.625 per share.
MINISO plans to raise $502m-$562m via issuing 16.5m new ADS (122m-140m new shares). An overallotment option, if exercised, could increase the IPO by $75m-$84m (4.6m new ADS).
Previously, we discussed MINISO's business model and financials in <a href="https://www.smartkarma.com/insights/miniso-ipo-long-term-growth-prospects-secured-by-a-sustainable-competitive-advantage" target="_blank" rel="noopener">MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage</a> and <a href="https://www.smartkarma.com/insights/miniso-ipo-as-appealing-as-miniso-products" target="_blank" rel="noopener">MINISO IPO: As Appealing As MINISO Products</a>.
This insight will focus on valuation and assess if it is worthwhile subscribing to the IPO.

MINISO Group Holdings (MNSO US) is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB 9.0 billion (US$1.3 billion).
Last week, the company filed an updated prospectus with the SEC announcing the price range for the NYSE IPO. The price range was set at $16.50-$18.50 per ADS, which translates to $4.125-$4.625 per share.
MINISO plans to raise $502m-$562m via issuing 16.5m new ADS (122m-140m new shares). An overallotment option, if exercised, could increase the IPO by $75m-$84m (4.6m new ADS).
Previously, we discussed MINISO's business model and financials in MINISO IPO: Long Term Growth Prospects Secured By a Sustainable Competitive Advantage and MINISO IPO: As Appealing As MINISO Products.
This insight will focus on valuation and assess if it is worthwhile subscribing to the IPO.

MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck

APAC IPOs & Placements

Zhen Zhou, Toh

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.

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is looking to raise about US$562m in its U.S. IPO. MINISO Group Holding (MINISO) is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable. It operates its flagship brand “MINISO” and has a global presence with about 2,500 stores in China and over 1,680 stores across 80 other countries. In this note, we will look at earnings forecast and share our thoughts on valuation.Our previous coverage of the IPO:<ul>
<li>
<a href="https://www.smartkarma.com/insights/miniso-pre-ipo-store-walkthrough-co-branding-allows-for-stronger-pricing" target="_blank" data-smartkarma-citation="insights:43821" rel="noopener">MINISO (名创优品) Pre-IPO - Store Walkthrough - Co-Branding Allows for Stronger Pricing</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/miniso-pre-ipo-asset-light-and-fairly-resilient-despite-covid" target="_blank" data-smartkarma-citation="insights:43623" rel="noopener">MINISO (名创优品) Pre-IPO - Asset-Light and Fairly Resilient Despite COVID</a> </li>
</ul>

MINISO Group Holdings (MNSO US) is looking to raise about US$562m in its U.S. IPO. MINISO Group Holding (MINISO) is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable. It operates its flagship brand “MINISO” and has a global presence with about 2,500 stores in China and over 1,680 stores across 80 other countries. In this note, we will look at earnings forecast and share our thoughts on valuation.Our previous coverage of the IPO:

MINISO (名创优品) Pre-IPO - Store Walkthrough - Co-Branding Allows for Stronger Pricing 

MINISO (名创优品) Pre-IPO - Asset-Light and Fairly Resilient Despite COVID 


MINISO (名创优品) IPO - Reasonable Towards the Low-End

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/miniso-group-holdings" target="_blank" data-smartkarma-citation="entities:29673:1" rel="noopener">MINISO Group Holdings (MNSO US)</a> is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the global branded variety retail market in 2019, according to Frost &amp; Sullivan. Miniso has launched its IPO at a price range of $16.50-18.50 per ADS. At the mid-point of the IPO price range, Miniso will raise net proceeds of $504.2 million. <div><div><div class="content-highlight">In <a href="https://www.smartkarma.com/insights/miniso-group-ipo-initiation-chain-reaction" target="_blank" rel="noopener">our initiation note</a>, we stated that setting aside the short-term negative impact due to COVID-19, Miniso presents a unique opportunity to gain exposure to the global branded variety retail market which is driven by consumers’ increasing focus on product design and value for money. We opined that Miniso’s fundamentals offer more positives than negatives. Overall, our valuation analysis suggests that the IPO price range is attractive.</div></div></div>

MINISO Group Holdings (MNSO US) is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the global branded variety retail market in 2019, according to Frost &amp; Sullivan. Miniso has launched its IPO at a price range of $16.50-18.50 per ADS. At the mid-point of the IPO price range, Miniso will raise net proceeds of $504.2 million. In our initiation note, we stated that setting aside the short-term negative impact due to COVID-19, Miniso presents a unique opportunity to gain exposure to the global branded variety retail market which is driven by consumers’ increasing focus on product design and value for money. We opined that Miniso’s fundamentals offer more positives than negatives. Overall, our valuation analysis suggests that the IPO price range is attractive.

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): Impulse Shopper's Paradise. Not a Sustainable Growth Model.

MINISO Group Holdings (MNSO US)'s business model is more fast fashion-like and lacks a sustainable competitive advantage. Expect risks to its...

Devi Subhakesan

MINISO Deserves More Than The IPO Valuation

MINISO is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and revenue of RMB...

Oshadhi Kumarasiri

MINISO Valuation: Valued Like MINISO Merchandise - Bang for the Buck

MINISO Group Holdings is the leading variety retailer of lifestyle products globally with an aggregate GMV of RMB 19.0 billion (US$2.7 billion) and...

Oshadhi Kumarasiri

MINISO (名创优品) IPO - Reasonable Towards the Low-End

MINISO Group Holdings (MNSO US) is looking to raise about US$562m in its U.S. IPO. MINISO Group Holding (MINISO) is a value retailer with a focus...

Zhen Zhou, Toh

MINISO Group IPO: Valuation Insights

MINISO Group Holdings (MNSO US) is the largest global branded variety retailer of lifestyle products, with a 5.2% market share of the GMV of the...

Arun George

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