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

<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

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>Despite the drastic bull turn in Chinese equity sending MNSO’s share 41% from its trough, we see MNSO’s investment in Yonghui Superstores as a risk venture.</li>
<li>We believe the market has overestimated the scalability of the Pangdonglai rectification program for offline retail. </li>
<li>We downgrade the stock to SELL rating and cut TP to US$18/ADS</li>
</ul>


Despite the drastic bull turn in Chinese equity sending MNSO’s share 41% from its trough, we see MNSO’s investment in Yonghui Superstores as a risk venture.
We believe the market has overestimated the scalability of the Pangdonglai rectification program for offline retail. 
We downgrade the stock to SELL rating and cut TP to US$18/ADS


[Miniso (MNSO US, SELL, TP US$18) Rating Change]: We Took Our Stand on Yonghui Acquisition…DG2SELL

<ul>
<li>Miniso (MNSO) reported C2Q24 revenue (3.2%)/1.9% vs. our estimate/consensus. Non-GAAP NI (5.6%)/(2.7%) vs. our estimate/consensus. </li>
<li>Recent weak economic data in both China and U.S.,along with MNSO's deceleration in overseas average store sales;</li>
<li>We cut TP from US$34 to US$24 and maintain BUY.</li>
</ul>


Miniso (MNSO) reported C2Q24 revenue (3.2%)/1.9% vs. our estimate/consensus. Non-GAAP NI (5.6%)/(2.7%) vs. our estimate/consensus. 
Recent weak economic data in both China and U.S.,along with MNSO's deceleration in overseas average store sales;
We cut TP from US$34 to US$24 and maintain BUY.


[Miniso Group (MNSO US, BUY, TP US$24) TP Change]: Management Might Have Been Overly Optimistic

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

[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

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 (MNSO US, SELL, TP US$18) Rating Change]: We Took Our Stand on Yonghui Acquisition…DG2SELL

Despite a significant increase in MNSO's share value due to Chinese equity, their investment in Yonghui Superstores is seen as risky.

Blue Lotus Research Institute

[Miniso Group (MNSO US, BUY, TP US$24) TP Change]: Management Might Have Been Overly Optimistic

Miniso reports lower than expected revenue and non-GAAP net income, attributed to weak economic data in China and the U.S. Overseas store sales...

Blue Lotus Research Institute

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

[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

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 (MNSO US, SELL, TP US$18) Rating Change]: We Took Our Stand on Yonghui Acquisition…DG2SELL

​Despite a significant increase in MNSO's share value due to Chinese equity, their investment in Yonghui Superstores is seen as risky.

Blue Lotus Research Institute

[Miniso Group (MNSO US, BUY, TP US$24) TP Change]: Management Might Have Been Overly Optimistic

​Miniso reports lower than expected revenue and non-GAAP net income, attributed to weak economic data in China and the U.S. Overseas store sales...

Blue Lotus Research Institute

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...

Despite a significant increase in MNSO's share value due to Chinese equity, their investment in Yonghui Superstores is seen as risky.

Miniso reports lower than expected revenue and non-GAAP net income, attributed to weak economic data in China and the U.S. Overseas store sales...