BofA Securities upgrades Miniso stock to Neutral on earnings beat

Investing.com - BofA Securities upgraded Miniso (NYSE:MNSO) from Underperform to Neutral and raised its price target to $24.00 from $16.50 following the company’s second-quarter results that exceeded expectations. According to InvestingPro data, Miniso maintains a "GREAT" financial health score and has established itself as a prominent player in the Broadline Retail industry, with a market capitalization of $6.76 billion.

The Chinese retailer reported second-quarter revenue growth of 23% and non-IFRS net profit after tax growth of 11%, showing acceleration from first-quarter performance when revenue grew 19% while profit declined 5%. The company’s non-IFRS net profit after tax beat BofA’s estimate by 14% on 3% higher revenue and improved margins. InvestingPro analysis shows the company maintains a healthy gross profit margin of 45.08% and strong liquidity with a current ratio of 1.99.

BofA raised its 2025 and 2026 non-IFRS earnings per share estimates by 11% and 2% respectively, while increasing its target multiple to 15x from 12x to reflect Miniso’s faster earnings growth trajectory.

The firm 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.

Miniso shares have gained 13% over the past month, outperforming the MSCI China Index which rose 3%, with the stock now trading at 14x forward price-to-earnings ratio for a 14% earnings per share compound annual growth rate over 2025-2027. InvestingPro analysis suggests the stock is currently slightly undervalued, with additional insights and a comprehensive Pro Research Report available for subscribers looking to make informed investment decisions.

In other recent news, MINISO Group reported its second-quarter earnings, which exceeded analyst expectations. The company achieved adjusted earnings per ADS of RMB2.24 ($0.31), surpassing the anticipated RMB1.75 by RMB0.49. Revenue for the quarter reached RMB4.97 billion ($693.2 million), which was above the consensus estimate of RMB4.86 billion. This revenue figure also marked a 23.1% increase year-over-year, highlighting significant growth. The strong performance was attributed to robust revenue growth and improved same-store performance. These developments have been noted by analysts as a positive indicator for the company. MINISO Group’s recent results reflect its ability to outperform market expectations.

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