BofA Securities upgrades Miniso stock rating to Neutral on earnings beat

Miniso (MNSO) reported robust second-quarter results, with revenue increasing 23% and non-IFRS net profit after tax growing 11%, significantly surpassing analyst expectations. This strong performance prompted BofA Securities to upgrade the stock from Underperform to Neutral, raising its price target to $24.00 due to improved margins and higher earnings estimates. Concurrently, Jefferies upgraded Miniso from Hold to Buy, setting a $26.20 price target, citing better-than-expected operations and the resumption of new store openings, collectively indicating a positive outlook for the company's growth and financial trajectory.

Analysis

Miniso (MNSO) delivered a robust second-quarter performance, significantly exceeding analyst expectations and signaling a positive operational inflection. The company reported a 23.1% year-over-year revenue increase to RMB 4.97 billion, surpassing the consensus estimate of RMB 4.86 billion, and an 11% growth in non-IFRS net profit after tax. This marks a notable acceleration from the first quarter, which saw 19% revenue growth but a 5% decline in non-IFRS net profit. The results prompted significant analyst revisions, with BofA Securities upgrading the stock from Underperform to Neutral and raising its price target by 45% to $24.00, citing a 14% beat on their profit estimate driven by higher revenue and improved margins. Consequently, BofA increased its 2025 and 2026 non-IFRS EPS estimates by 11% and 2%, respectively, and raised its target valuation multiple from 12x to 15x. Jefferies followed with a more bullish upgrade from Hold to Buy, lifting its price target to $26.20. The positive outlook is underpinned by expectations of reaccelerated growth in the second half, supported by an easier comparison base, the rising contribution from more profitable mega stores, and the resumption of new store openings in China.

Key Decisions for Investors

• Investors should recognize the material shift in Miniso's operational narrative, as the strong earnings beat and subsequent double upgrade from BofA and Jefferies challenge any prior underperform or bearish thesis.
• Monitor key forward-looking catalysts cited by analysts for the second half, specifically the pace of new store openings in China, the margin contribution from 'mega stores', and the execution of overseas direct-to-consumer expansion plans.
• While the fundamental outlook has improved, investors should note the stock's recent 12.4% weekly gain and the increased valuation multiple, weighing the positive momentum against a potentially less attractive entry point.