MINISO Group's Global Expansion and Margin Resilience: A Compelling Investment Play

Theodore QuinnFriday, May 23, 2025 6:49 am ET
25min read

MINISO Group Holding Limited's Q1 2025 earnings call delivered a masterclass in balancing aggressive global expansion with margin discipline. With revenue surging 18.9% year-over-year to RMB4.43 billion and overseas stores now accounting for 70% of new openings, the company is solidifying its position as a global retail disruptor. Amid economic uncertainty and rising competition, MINISO's strategy—driven by IP-centric products, localized store formats, and a fortress-like balance sheet—presents a compelling investment opportunity. Here's why now is the time to act.

Global Dominance Through Store Expansion

MINISO's relentless push into international markets is paying off. By March 2025, the company operated 7,768 stores globally, a net addition of 978 stores year-over-year. Overseas expansion dominated this growth, with 3,213 stores outside China, a 617-store increase. Notably, 70% of new MINISO stores opened in the past year were overseas—a stark reflection of its global ambitions. The TOP TOY brand, which focuses on premium lifestyle products, expanded to 280 stores globally, including its first international locations in late 2024.

The

underscores the brand's ubiquity. This scale is critical as MINISO leverages its size to negotiate supplier terms, reduce inventory days (now 100 days for overseas stores, down from 135 in 2023), and drive cost efficiencies.

Margin Resilience: A Strategic Play on High-Margin IP

While MINISO's adjusted net margin dipped to 13.3% from 16.6% a year ago—due to aggressive expansion costs—the company's focus on IP-centric products and premium segments is bolstering gross margins. Gross margin hit 44.2%, a record high, fueled by IP collaborations with Disney, Harry Potter, and 150+ other global licenses. IP products now account for 40% of overseas sales, growing 85% YoY, and IP Land Stores (e.g., plush-toy-centric outlets) are delivering outsized returns. The Tianjin IP Land Store, for instance, generated nearly RMB1 million in its first month.

The **** highlights this shift. By prioritizing higher-margin products and localized store concepts, MINISO is future-proofing its margins against economic headwinds.

Navigating Risks with Discipline

No expansion without challenges. MINISO's U.S. tariff risks are being mitigated by boosting local sourcing to 60% (target: 80% via South Asian, Japanese, and U.S. suppliers). Meanwhile, same-store sales (SSS) in China narrowed to a mid-single-digit decline—a significant improvement from prior quarters—while overseas SSS grew at a high single-digit rate. This balance suggests MINISO's global diversification is shielding it from regional slowdowns.

The company's cash reserves of RMB7.26 billion and shareholder returns of RMB987 million (dividends + buybacks) further underscore financial strength. This liquidity buffer allows MINISO to fund its 2025 targets: 700+ new overseas stores, 100+ TOP TOY locations, and a 20–30% revenue growth ramp.

Why Invest Now?

  • Underappreciated Global Footprint: MINISO's store count in the U.S. alone nearly doubled year-over-year (238 → 503), and its European presence in the U.K., Italy, and France is growing. This is just the start.
  • Margin Upside Ahead: As new stores mature and IP sales scale, adjusted net margins could rebound. Management's focus on optimizing store layouts and inventory will further drive efficiencies.
  • Dividend Discipline: With a ≥50% payout ratio and buybacks, MINISO rewards shareholders while reinvesting in growth.

The Bottom Line

MINISO Group is proving that global retail expansion and margin resilience are not mutually exclusive. Its IP-driven product strategy, disciplined financial management, and geographic diversification create a moat against competitors. With shares near a 52-week high but still undervalued relative to its growth trajectory, this is a rare opportunity to buy a high-quality, high-growth retailer at a discount.


Act now before the market catches up to MINISO's global dominance.

This analysis combines MINISO's Q1 results with its strategic roadmap, revealing a company poised to capitalize on emerging markets while maintaining financial strength. For investors seeking a leveraged play on global retail recovery, MINISO is primed for outperformance.