CICC cuts MINISO target 22% to 39.16 HKD on macro headwinds

China International Capital Corporation cut its price target on MINISO Group Holding Ltd. (09896.HK) by 22 percent to 39.16 HKD, citing macroeconomic uncertainty.

"We expect operational enhancements and faster inventory turnover from continued optimization of the company's directly-operated overseas markets, represented by the U.S.," analysts at CICC said in the report.

The bank lowered its fiscal 2026 and 2027 adjusted net profit forecasts for MINISO by 11 percent and 16 percent, respectively. The new 39.16 HKD target implies 27 percent upside from the current price and is based on a 14 times price-to-earnings multiple on CICC's 2026 earnings estimate.

The downgrade comes despite MINISO reporting 4Q25 results that met market expectations, with revenue growing 33 percent year-over-year to 6.3 billion yuan. The move highlights investor concern over future profitability despite recent strong performance.

The company’s domestic revenue for the fourth quarter of fiscal 2025 increased by 25 percent to 2.9 billion yuan, with same-store sales showing a mid-double-digit increase. Overseas, revenue grew 31 percent to 2.8 billion yuan, driven by a strong performance in the United States where sales jumped 57 percent.

However, the company's gross margin saw a slight decrease of 0.7 percentage points in the quarter due to changes in the product mix. Strategic inventory stocking to mitigate tariff impacts led to an increase in overseas inventory turnover days to 228, up 41 days from the previous year.

For its TOPTOY brand, revenue surged 112 percent to 600 million yuan. The company's guidance for fiscal 2026 points to revenue growth in the high end of the 10-20 percent range.

The target price cut suggests that macroeconomic headwinds may overshadow the company's strong top-line growth. Investors will be watching for evidence of improved inventory management and margin stabilization in the upcoming quarters.

This article is for informational purposes only and does not constitute investment advice.