MINISO's 4Q25 results were broadly in line with expectations, and the 2026 revenue outlook is strong but margins remain under pressure

Overview

This report is UBS's commentary on MINISO GROUP HOLDING LTD (MNSO.US) 4Q25 results and the 2026 outlook. 4Q25 revenue and adjusted net profit were broadly in line with expectations, supported by improved same-store sales in China, overseas expansion, and strong performance in North America; however, profitability remained under pressure from direct-operated store operating expenses, DTC model expansion, and pressure in some distribution markets. UBS maintained its Buy rating but lowered the target price from US$31.00 to US$26.50.

Core views

The core view is that revenue growth momentum is stronger than margin performance. In 2025, company revenue grew 26% YoY and adjusted net profit grew 7% YoY; 4Q25 revenue and adjusted net profit grew about 33% and 8% YoY, respectively, broadly in line with UBS expectations. Management guided to high double-digit revenue growth in 2026 and a return to positive global same-store sales, and expects 1Q26 revenue to grow 25% YoY. However, the higher contribution from direct-operated stores will continue to weigh on operating margins, although the pressure in 2026 is expected to be less severe than in 2025. UBS therefore cut 2026-2028 adjusted net profit forecasts by 6% to 10%, but believes the valuation still offers attractive expected returns.

Analysis framework

The report uses earnings comparisons, management-guidance tracking, store expansion and same-store sales analysis, regional operating updates, earnings forecast revisions, and a DCF valuation framework. It focuses on revenue growth, cost pressure, gross margin, and operating margin changes, and combines operating trends in Mainland China, the US, Southeast Asia, and other regions to assess future earnings quality.

Methodology notes

• Valuation methodsThree-stage DCF model

  Deriving the target price with a discounted cash flow model

  UBS uses a three-stage DCF model to derive MINISO's target price of US$26.50; the target price cut mainly reflects a 6% to 10% reduction in 2026-2028 adjusted net profit forecasts, driven by lower margin assumptions from DTC expansion, partially offset by stronger revenue growth.

• Rating FrameworkForecast Stock Return

  12-month expected share price gain plus dividend yield

  UBS defines Forecast Stock Return as the expected price appreciation plus total dividend yield over the next 12 months. The forecast stock return in this report is 69.0%, comprising 64.4% forecast price appreciation and 4.6% forecast dividend yield.

• Operating AnalysisSame-store sales growth and store expansion analysis

  Measuring growth quality through SSSG, net openings, and store refurbishments

  The report focuses on Mainland China MINISO same-store sales, North America same-store sales, the global net opening plan, and sales uplift from store refurbishments to judge the sustainability of revenue growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• MNSO.US

  core covered name

  Strengths

  Strong revenue growth, with 2026 revenue guidance pointing to high double-digit growth; improved same-store sales in China, strong same-store sales in North America; global store count continues to expand; proprietary IP YOYO offers incremental upside.

  Weaknesses

  Margins are pressured by direct-operated store expenses, a higher DTC revenue mix, and pressure in some distribution markets; 2026-2028 adjusted net profit forecasts were cut.

  Comparison

  4Q25 revenue and adjusted net profit were broadly in line with UBS expectations; revenue growth was stronger than profit performance, and margins were weaker than previously assumed.

  Risks

  Uncertainty in international relations, potential litigation related to counterfeiting allegations, regulatory uncertainty around ADR status, and overseas distribution market recovery falling short of expectations.

• RMB.US

  appears in entity recognition but is not materially analyzed in the report body

  Risks

  There is no evidence in the report body to support this as a covered name in this report.

Key data

• 2025 RevenueRMB 210 hundred million, up 26% YoYThe company's full-year revenue performance was strong.
• 2025 Adjusted Net ProfitRMB 29 hundred million, up 7% YoYProfit growth lagged revenue growth, indicating margin pressure.
• 4Q25 Revenueabout RMB 63 hundred million, up 33% YoYBroadly in line with UBS expectations and close to the upper end of the preliminary earnings range.
• 4Q25 Adjusted Net Profitabout RMB 8.53 hundred million, up 8% YoYBroadly in line with UBS expectations.
• 2026 Revenue GuidanceHigh double-digit growthManagement expects global same-store sales growth to turn positive.
• 1Q26 Revenue Guidance25% YoY growthMainland China MINISO same-store sales are expected to grow in the high single digits, while North America is expected to grow in the mid-to-high double digits.
• 2026 Global Net Store Opening Guidance510 to 550 storesIncluding about 120 in China and about 350 overseas.
• 2026 YOYO Sales TargetRMB 8 hundred million to 10 hundred millionSales from the proprietary IP are expected to be concentrated mainly in the second half of 2026.
• Target PriceUS$26.50, prior US$31.00Lowered due to weaker margin assumptions.
• 2026E Adjusted Net Profit ForecastRMB 31.88 hundred million, 6% below the previous forecastThe forecast revision comes from UBS's earnings revision table.
• 2026E Operating Margin15.2%, 1.3 percentage points below the previous forecastDTC expansion and spending weigh on margins.
• Market CapUS$4.99bAs disclosed in the report's trading data.

Impact & implications

The investment implication is that MINISO still has strong revenue growth and overseas expansion flexibility, but the pace of near-term margin recovery is uncertain. If China store refurbishments, North America expansion, and YOYO proprietary IP sales materialize, the top line could continue to beat expectations; however, if direct-operated store expenses, pressure in Southeast Asian distribution markets, or DTC model costs remain above expectations, earnings forecasts and valuation may still come under pressure.

Risks

• Uncertainty in international relations could weaken global expansion.
• Potential litigation risk related to counterfeiting allegations.
• Regulatory uncertainty around ADR status.
• Expansion of direct-operated stores and the DTC model could continue to depress operating margins.
• Pressure in distribution markets such as Indonesia could weigh on overseas recovery.
• If YOYO proprietary IP sales, the World Cup, and co-branded campaigns fall short of expectations, incremental growth contribution may be below management's target.

What to watch

• The execution pace of the 2026 plan to add 510 to 550 net new stores globally, especially the share of overseas direct-operated stores.
• Whether Mainland China MINISO same-store sales can maintain high-single-digit or higher growth.
• Whether North America same-store sales and store expansion can sustain strong momentum.
• Sales recovery and margin improvement in Southeast Asia and the Indonesia market.
• Whether DTC model adjustments and cost control can ease 2026 operating margin pressure.
• YOYO proprietary IP sales realization in the second half of 2026, especially the uplift from the World Cup and co-branded campaigns.
• Whether UBS further revises its 2026-2028 earnings forecasts and DCF target price.