MNSO had a mixed 4Q25: while the RMB550m loss shared from Yonghui Superstore is much higher than market expected, its core business is above expectations, suggesting all-rounded improvement in most countries. In 2026, we expect MNSO’s NP will still be dragged by Yonghui, but we estimate it will be somewhat offset by its investment gain on MiniMax. Hence, we expect the valuation in the near term could be more correlated to its core business, which has demonstrated signs of sequential improvements. While the 2026 full year guidance implies adj. NP growth would be rather limited, which we estimate to be MSD YoY growth, we expect it will eventually translate into much stronger growth in the future, as its IP-centric strategy could sustain strong momentum. With a lower TP of US$18.2/HK$35.6, we reiterate that MNSO could reappear attractive if the overhang on Yonghui is eased.
Key Factors for Rating
Mixed 4Q25 as drag from Yonghui disappointed investors. If only core business is viewed, MNSO’s 4Q25 is slightly above expectations, as revenue jumped 33% YoY to RMB6,25
4m, despite adj. NP only growing 8% YoY to RMB853m. This suggests MNSO is on track to deliver strong store expansion and ramp up per-store sales in most markets, even though higher opex from selfoperated stores could drag near-term profitability. However, MNSO had an RMB142m net loss if RMB550m loss shared from Yonghui Superstore (601933 CH, NR) and other non-operating costs are excluded.
1Q26 & 2026 guidance implies top-line growth still encouraging, but profitability may still take time to ramp up. While we see MNSO’s 1Q26 guidance still encouraging with a revenue YoY growth of 25%, full-year guidance may be on the conservative side (revenue +high-teens only), while adj. NP will grow slower, implying NPM could see further pressure. We expect this guidance may disappoint some investors again, given MNSO had a slower adj. NP growth already in 2025. However, we believe the current thesis for MNSO’s core operations have now switched to the longer term return from its ramp-up of self-operated stores in overseas markets, especially North America. We also expect there could be further upside room for such guidance, if the energy crisis since Mar 2026 has limited impact on its global operations.
Doubling down on IP-centric strategy globally with more visible outcomes. Mgmt. has turned more positive on its IP strategy after it recently achieved success on several fronts, such as: (1) good per store sales and profitability of bigger store formats (e.g. Minso Land, Plaza), which strengthened MNSO’s bargaining power with landlords; (2) collaborating with Blackpink’s Jennie on new products, reflecting recognition from global celebrities, and (3) strong proprietary IPs on the pipeline, with Yoyo now being one of the frontrunners which mgmt. expected it to hit RMB1bn sales soon.
Confident on turning underperforming regions around in 2026. MNSO achieved strong performance in 2025 & 4Q25, except Southeast Asia and Mexico trailing mgmt. expectations. MNSO will now replicate its successful experience in China and the US to Indonesia and Mexico where bigger, IP-themed stores will be the focus of reform. Mgmt. expected it could take some months to achieve such turnaround. We see if these reforms are carried successfully, this could imply further upside for its guidance, as SSSG on these regions could turn more positive.
Drag from Yonghui will still persist, but gains from Minimax could buy some time. Yonghui Superstore reported an RMB2.55bn net loss in 2025, and MNSO had to share RMB834m on a full-year pro forma basis. We expect Yonghui will continue to record loss in 2026 due to its unsuccessful reforms, and store closure-related losses could still threat bottom lines. However, given Yonghui’s share capital attributable to shareholders has already lowered to RMB1.86bn, which is a very low base, we do not expect 2026 net loss will be larger than RMB2.55bn. Still, we do acknowledge there could be going concern risks for Yonghui, which would mean MNSO could be subject to a total loss of RMB5.5bn in the future. On the brighter side, MNSO expected that it will record a gain of RMB800-900m from its investment on MiniMax (100 HK, NR), and this will be booked in 1Q26. We expect this will mean MNSO could still buy time in 2026, and seek ways to achieve more synergy with Yonghui. Key Risks for Rating
Weak SSSG and store opening, weak expenses control, weak product pipeline to sustain traffic, global geopolitics affecting expansion and big loss from Yonghui. Valuation
After 2026 guidance, we revise our adj. EPS for FY26/27 by -12%/-4% to reflect: (1) weaker revenue assumption, and (2) weaker margin assumptions as selfoperated stores may take longer time to ramp up and report visible profits.
Due to weaker growth outlook in the near term, and also uncertainties on global retail after energy crisis, our TP is lowered to US$18.2 and HK$35.6, based on 12.5x 2026E adj. EPS (previous: 15x 2026E adj. EPS). Our TP is equivalent to 12x/11x reported 2026E/27E EPS. Our valuation method of adj. EPS is based on the view that the non-operating losses from Yonghui Superstore could distort earnings and could not reflect the changes of its core business.
Despite the overhang from Yonghui, we maintain BUY as we see Miniso now on a good track to deliver stronger organic growth after successful execution of initiatives, while valuation is undemanding on long-term growth prospective. We expect Miniso’s shareholder’s return scheme (especially buybacks) should also support its share price to mitigate some impact from the drag of Yonghui.