JPMorgan raises Miniso stock rating to Overweight, target to HK$43

On Tuesday, JPMorgan analyst Kevin Yin upgraded Miniso (H-Shares) (9896:HK) (NYSE: MNSO) stock rating from Neutral to Overweight and increased the price target to HK$43.00 from HK$29.00. Yin’s decision reflects a positive outlook for the retailer’s performance in 2025, anticipating a change in the company’s fortunes. According to InvestingPro data, Miniso currently trades at a P/E ratio of 15.8 and maintains a strong financial position with more cash than debt on its balance sheet.

Miniso’s stock has seen a 24% decline year-to-date, underperforming against the Hang Seng Index’s 19% rise. Market concerns have centered around Miniso’s performance in China and its 29% equity acquisition of Yonghui (YH). Despite recent volatility, InvestingPro analysis suggests the stock is currently undervalued, with strong fundamentals including a healthy 45% gross profit margin and 16% return on assets. JPMorgan predicts a recovery in China’s same-store sales growth (SSSG), projecting a shift from a high single-digit decline in 2024 to a mid-single-digit increase in 2025.

The upgrade was also influenced by Miniso’s aggressive overseas expansion plans, which account for 50-70% of its new store openings, and are expected to contribute to a 1.1 percentage point operating margin uplift. Furthermore, a clearer turnaround strategy for Yonghui is anticipated, including a leadership change and a targeted significant loss reduction in 2025. With revenue growth of 11.3% in the last twelve months and a market capitalization of $5.6 billion, Miniso demonstrates strong momentum in its expansion strategy.

JPMorgan’s analysis also incorporates Miniso’s shareholder return strategy, which includes a HK$1.7 billion buyback program set to be completed by June 2026 and a commitment to a 50% or higher dividend payout. The financial firm has maintained its 2025 estimates for Miniso and foresees margin improvements in 2026. This confidence comes on the back of Miniso’s 2024 revenue and adjusted earnings, which rose by 22.8% and 15.4% year-over-year, aligning with expectations. InvestingPro data reveals the company has maintained dividend payments for five consecutive years, with a current dividend yield of 3.56%, showcasing its commitment to shareholder returns. Get access to 10+ additional ProTips and comprehensive financial analysis with an InvestingPro subscription.

In other recent news, Miniso has reported a 22.8% year-over-year increase in revenue and a 15.4% rise in adjusted earnings for 2024, meeting financial expectations. JPMorgan has upgraded Miniso’s stock rating from Neutral to Overweight, setting a new price target of $22.00, citing potential growth drivers such as a recovery in China’s same-store sales and aggressive international expansion. The firm also noted Miniso’s strategic acquisition of a 29% stake in Yonghui, which could lead to improved financial performance. HSBC has initiated coverage of Miniso with a Buy rating and a price target of $29.30, highlighting the company’s leading position in China and its rapid international market expansion. HSBC projects a compound annual growth rate of 22.8% for revenue from 2024 to 2026, with international markets expected to contribute significantly to this growth. By 2026, HSBC anticipates that 51% of Miniso’s total revenue and 44% of its overall profit will come from overseas operations. The company’s strategic focus on global market penetration and supply chain optimization is seen as a key factor in its positive outlook. Both JPMorgan and HSBC emphasize Miniso’s robust plans for international store openings, which are expected to drive future financial performance.

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