MINISO Group (MNSO) Report Interpretation

Overview

This report reviews MINISO Group's 2Q26 results and management outlook. Nomura concludes that early positive feedback on store reformatting and self-operated IP is insufficient to offset weaker overseas demand and 2026 margin pressure, prompting a downgrade to Neutral.

Core views

Nomura says MINISO's 2Q26 results and updated guidance were more discouraging than expected. Quarterly revenue increased 17% year-on-year to CNY5.8bn, but TOPTOY revenue growth slowed to 17% from 51% in 1Q26. The central issue was overseas momentum: MINISO's overseas same-store sales declined by a low-single-digit percentage year-on-year in 1H26, which Nomura attributes mainly to sequential weakening in the US during 2Q26 and the scaling-back of underperforming distributor markets. Management consequently lowered its full-year revenue-growth target to the mid-teens from the high-teens and adopted a more conservative expansion plan, including a net reduction of 50-70 overseas stores in 2H26E to improve per-store performance. Profitability weakened despite a headline gross-margin improvement. Gross margin rose 1 percentage point year-on-year to 45.3% in 2Q26, but Nomura notes that this was mainly supported by a 1.2% tariff-refund benefit. Adjusted operating profit declined 14% year-on-year to CNY731mn, with adjusted operating margin down 4.6 percentage points, as sales and distribution expense rose 36% and the company incurred foreign-exchange losses. Adjusted earnings decreased 24% year-on-year to CNY529mn; excluding FX losses, the decline was still 10%. MINISO also did not pay an interim dividend. Nomura expects the company to face a trade-off between top-line growth and bottom-line improvement, forecasting FY26F adjusted net margin of 9.9%, down 3.7 percentage points year-on-year. The report acknowledges that MINISO's more diversified store positioning and transition toward self-operated IP received some positive initial feedback in 1H26. However, Nomura expects both initiatives to compress margins in 2026F, leaving sluggish earnings growth as an ongoing concern. It reduced FY26-28 revenue forecasts by 4-9% and adjusted-earnings forecasts by 12-17%, reflecting increasingly conservative margin assumptions. New FY26F revenue is CNY24,229mn versus the prior CNY25,183mn forecast, while normalized income attributable is CNY2,679mn versus CNY3,055mn previously. Nomura cut its target price to USD11.70 from USD18.90 and lowered its forward 12-month P/E target multiple to 10.0x from 15.0x. The institution considers 10.0x consistent with MINISO's earnings-growth trend; the stock traded at 8.5x FY26F P/E at the time of the report. Although the revised target implies 13.3% upside from the USD10.33 closing price on 28 August 2026, Nomura sees limited short-term catalysts and downgrades the stock to Neutral from Buy. Within retail, it states a preference for Laopu Gold.

Analysis framework

Nomura assesses the 2Q26 operating results, separating revenue growth by domestic and international operations and examining gross-margin, sales-and-distribution, FX and earnings effects. It then incorporates management's revised growth and store-opening guidance into FY26-28 revenue and earnings forecasts, and values MINISO using a forward 12-month P/E multiple.

Methodology notes

• Valuation methodsP/E and PEG Valuation

  Forward 12-month P/E valuation

  Nomura applies a 10.0x forward 12-month P/E multiple to MINISO to derive its USD11.70 target price, reduced from a previous 15.0x multiple.

• Industry AnalysisVolume-price decomposition

  Revenue and store-performance analysis by market

  The report uses revenue growth, same-store-sales trends and planned overseas store reductions to assess changes in MINISO's market momentum and per-store performance.

Asset mapping & comparison

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

• MINISO Group (MNSO.US)

  Primary covered company; overseas weakness and margin pressure drive the downgrade.

  Strengths

  Store reformatting and self-operated IP strategy received initial positive feedback in 1H26.

  Weaknesses

  Overseas momentum weakened, TOPTOY growth slowed, and sales and distribution expenses increased substantially.

  Comparison

  Nomura prefers Laopu Gold in the retail space.

  Risks

  Domestic same-store-sales and revenue slowdown, overseas operational uncertainty, and intensifying competition.

Key data

• 2Q26 revenueCNY5.8bnUp 17% year-on-year.
• Overseas same-store salesLow-single-digit % declineYear-on-year decline in 1H26.
• 2Q26 gross margin45.3%Up 1 percentage point year-on-year, mainly aided by a 1.2% tariff-refund benefit.
• 2Q26 adjusted operating profitCNY731mnDown 14% year-on-year; adjusted operating margin fell 4.6 percentage points.
• 2Q26 adjusted earningsCNY529mnDown 24% year-on-year; down 10% excluding FX losses.
• FY26F adjusted net margin9.9%Nomura forecast, down 3.7 percentage points year-on-year.
• Forecast revisionsRevenue down 4-9%; adjusted earnings down 12-17%FY26-28F revisions.
• Target priceUSD11.70Reduced from USD18.90; based on 10.0x forward 12-month P/E.

Impact & implications

Nomura believes MINISO's overseas slowdown and higher operating costs constrain earnings improvement even as the company pursues store upgrades and self-operated IP. The revised expansion plan prioritizes per-store performance over overseas store growth, while the lower forecasts and valuation multiple underpin the downgrade to Neutral.

Risks

• Upside to Nomura's rating and target price could come from stronger-than-expected domestic self-operated IP performance.
• A faster-than-expected recovery in overseas revenue or a greater-than-expected profitability improvement could provide upside.
• Downside risks include a domestic same-store-sales and revenue-growth slowdown, overseas operational uncertainty, and intensifying competition.

What to watch

• The pace of recovery in overseas revenue, particularly following the US-market slowdown.
• Execution of the planned net reduction of 50-70 overseas stores in 2H26E and its effect on per-store performance.
• Whether store reformatting and self-operated IP can improve growth without further margin compression.
• Domestic same-store-sales trends, sales and distribution expenses, FX effects and profitability improvement.