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Investing.com - BofA Securities has upgraded Miniso (NYSE:MNSO) (9896:HK) from Underperform to Neutral with a price target of HK$46.90, following the company’s second-quarter results that exceeded expectations. The stock has shown remarkable momentum, with InvestingPro data showing a 12.4% return over the past week and a market capitalization of $6.8 billion.
The upgrade comes after Miniso reported second-quarter revenue growth of 23% and non-IFRS net profit after tax growth of 11%, marking an acceleration from first-quarter performance when the company saw 19% revenue growth and a 5% decline in non-IFRS net profit. InvestingPro analysis reveals strong fundamentals, with a healthy current ratio of 1.99 and a robust gross profit margin of 45.1%. Get deeper insights with InvestingPro’s comprehensive research report, available along with 12+ additional ProTips.
BofA Securities noted that Miniso’s non-IFRS net profit after tax beat their estimate by 14%, driven by 3% higher revenue and improved margins, leading the firm to raise its 2025 and 2026 non-IFRS earnings per share estimates by 11% and 2% respectively.
The firm also increased its price targets by 45% to USD24.0/HKD46.9, reflecting higher estimates, a valuation anchor roll-over to the 2025/26 average, and an increased target multiple from 12x to 15x due to Miniso’s faster earnings growth.
BofA Securities expects sequential revenue and earnings growth to reaccelerate in the second half amid an easier comparison base, rising contribution from more profitable mega stores, fine-tuned overseas direct-to-consumer expansion plans, and the upcoming peak season for overseas stores.
In other recent news, Miniso reported second-quarter earnings that significantly exceeded analyst expectations. The company achieved revenue of RMB4.97 billion ($693.2 million), surpassing the consensus estimate of RMB4.86 billion, and marking a 23.1% year-over-year increase. Adjusted earnings per ADS reached RMB2.24 ($0.31), beating analyst estimates by RMB0.49. Additionally, Miniso’s non-IFRS net profit after tax grew by 11%, outperforming BofA Securities’ projections by 14% due to higher revenue and improved margins.
Following these results, BofA Securities upgraded Miniso’s stock from Underperform to Neutral, raising the price target to $24.00 from $16.50. Jefferies also upgraded Miniso’s stock rating from Hold to Buy, increasing the price target to $26.20 from $18.50, citing the company’s better-than-expected operations and the resumption of new store openings in China. The upgrades reflect a positive outlook on Miniso’s expansion and financial performance. These developments highlight the company’s strong market presence and operational improvements.
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