CICC has released a research report maintaining its non-IFRS net profit forecasts for MINISO Group Holding Limited (09896, MNSO.US) for 2026/27 at RMB 31/35 billion, respectively. The current Hong Kong and U.S. stock prices correspond to approximately 10/9 times the 2026/27 non-IFRS P/E ratio. The firm reiterates its Outperform rating and target prices of HK$39.16 and US$20.32, which represent a 14x multiple on the 2026 non-IFRS P/E, implying an upside potential of 41%/44%. The key points from CICC are as follows:
The company pre-announced that for Q1 2026, its adjusted non-IFRS net profit, excluding foreign exchange gains/losses, is expected to increase by 7% to 10% year-over-year. MINISO anticipates Q1 2026 revenue to be in the range of RMB 5.68 to 5.73 billion, representing year-over-year growth of 28% to 29%. Adjusted net profit, excluding foreign exchange effects, is forecasted to be between RMB 620 and 640 million, marking a 7% to 10% increase compared to the same period last year.
Domestically, MINISO continues to focus on enhancing the shopping experience, sustaining solid growth in Q1 2026. In China, the company remains focused on high-quality products and popular IP collaborations. It is optimizing the shopping experience through flagship store formats and renovations of existing stores while innovating with celebrity IP partnerships. For January and February, MINISO's GMV in the Chinese mainland market grew by over 25% year-over-year, with same-store sales achieving high-single-digit or higher growth. It is anticipated that March will continue this positive trend, leading to high-single-digit same-store sales growth for the quarter. Regarding store count, with the ongoing strategy of expanding larger store formats, a modest increase in the number of domestic MINISO stores is expected.
Overseas directly operated markets continue to lead growth. The directly operated overseas markets are projected to maintain faster growth than other segments in Q1 2026. In key markets like the United States, the company is deepening its dual-strategy of partnering with top-tier IPs and localization. GMV in the U.S. market for January and February surged over 50% year-over-year, with same-store sales growing by 20% or more. March is expected to follow this trend, supporting mid-to-high teens same-store sales growth for the North American market in the quarter. Additionally, markets in Europe and Mexico are anticipated to achieve double-digit year-over-year same-store sales growth in Q1 2026, while performance in the Indonesian market is also expected to show some improvement.
Gross margin and expenses may still see fluctuations, while investment gains drive significant profit growth. Regarding gross margin, considering the year-over-year increase in the proportion of direct sourcing in the U.S. and the company's active optimization of its product assortment, a slight year-over-year decline in gross margin is anticipated. On the expense side, continued pre-opening costs for new stores in directly operated regions are expected. During the period, the company incurred a foreign exchange loss. However, benefiting from a gain of approximately RMB 870 to 880 million from an investment in an artificial intelligence enterprise and a share of profit from Yonghui Superstores of about RMB 80 million, Q1 2026 net profit is projected to be between RMB 1.23 and 1.25 billion, representing year-over-year growth of 195% to 200%. Excluding the impacts from the acquisition of Yonghui, the issuance of equity-linked securities, and the investment gain from the AI company, the adjusted net profit excluding foreign exchange effects grew by 7% to 10% year-over-year to RMB 620-640 million.
Risk factors include a retail environment weaker than expected, slower-than-anticipated channel upgrades, and new business development falling short of expectations.
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