Miniso's Q4 Outperformance and Global Expansion: A Strategic Buy Opportunity for 2025

The retail sector has been a tough neighborhood in 2025, but Miniso is proving to be a standout. JPMorgan's recent upgrade to Overweight with a U.S. price target of $22 and a Hong Kong target of HK$43 isn't just a ratings game—it's a signal that the company's playbook is working. Let's break down why Miniso's valuation, margin resilience, and global momentum make it a compelling long-term bet.

Undervalued Metrics in a Discounted Sector

Miniso's trailing P/E ratio of 17.43 as of July 2025 is a 23% discount to the retail sector average of 21.0x and a 33% gap from its direct peers' 24.2x average. This discount feels like a sale on a brand that's quietly outperforming. While the Zacks Rank for MNSO is currently a bearish #5 (Strong Sell) due to near-term EPS declines, the PEG ratio of 1.06 tells a different story. At just 6% above its growth-adjusted fair value, Miniso is priced to deliver, especially when compared to the sector's bloated PEG of 2.02.

Margin Resilience: The IP Flywheel in Action

Miniso's gross margin hit a record 44.9% in 2024, up 3.7 percentage points from 2023, driven by its IP-centric strategy. The Yu Yu Chan IP alone is projected to hit RMB 100 million in sales this year, and the company now derives 90% of revenue from proprietary products. This isn't just margin—it's margin accretion.

The operating margin story is equally compelling. Adjusted EBITDA in 2024 surged 21.4% year-over-year to RMB 4.33 billion, with JPMorgan projecting a 24% earnings CAGR from 2025–2027. The shift to large-format “MINISO LAND” stores—now 5% of China's store base but contributing mid-double-digit sales growth—has boosted efficiency. In the U.S., new stores are generating 1.5x higher efficiency and 30% more sales per square meter than existing locations.

Global Expansion: The 500-Store Catalyst

Miniso's international revenue grew 28.6% year-over-year in Q2 2025, with the U.S. leading the charge at 80% growth. The company added 189 stores globally in H1 2025, including 94 in Q2 alone, and plans to open 500+ stores in 2025. This isn't just expansion—it's strategic expansion.

The U.S. market, now a 35% direct-operated focus, is a goldmine. With 37 new stores in Q2 2025 and a mid-single-digit same-store sales recovery, the U.S. is a margin-boosting engine. Meanwhile, the company's RMB 7.47 billion cash reserves as of H1 2025 provide the firepower to fund this growth without dilution.

Shareholder Returns: A Buyback and Dividend Magnet

Miniso's HK$1.7 billion buyback program (to be completed by June 2026) and a 50%+ dividend payout ratio are investor-friendly signals. The company has raised dividends for five straight years, with a 3.56% yield and 66.7% growth in the last 12 months. This isn't just a stock—it's a cash machine with a dividend kicker.

The Long Game: Why This Is a Buy

JPMorgan's upgrade isn't a fluke. Miniso's 45% gross margin, 25%+ EBITDA margins, and 20%+ revenue CAGR projections paint a picture of a company that's not just surviving but thriving in a tough retail environment. The IP-driven model is a moat, the international expansion is a rocket, and the valuation is a bargain.

For investors, the key is patience. While the Zacks Rank is bearish short-term, the long-term fundamentals are bullish. At a 17.43 P/E and a 1.06 PEG, Miniso is priced for a 2025 recovery, not a 2024 slump. With $6.8 billion in market cap and a 24% earnings CAGR on the horizon, this is a stock that could outperform in 2025 and beyond.

Final Call: Buy Miniso for its undervalued metrics, margin resilience, and global momentum. This is a long-term play with a short-term discount.