Analyst Lucy Yu of Bank of America Securities reiterated a Sell rating on MINISO Group Holding (MNSO – Research Report), reducing the price target to $16.50.
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Lucy Yu’s rating is based on several factors impacting MINISO Group Holding’s financial performance. The company’s recent quarterly results showed a rise in revenue, driven by faster overseas growth, but this was overshadowed by a decline in net profit due to increased expenses related to direct-to-consumer (DTC) operations. This has led to a reduction in earnings per share estimates for the upcoming years and a lowered price objective for the stock.
Moreover, the domestic market presents challenges with declining same-store sales growth, and the shift towards DTC channels is pressuring margins. There are also uncertainties regarding the impact of U.S. tariffs and losses from Yonghui, which contribute to a cautious outlook. As a result, Lucy Yu has reiterated an Underperform rating, suggesting potential downside risks outweigh the positives in the near term.