A Fresh Look at MINISO (NYSE:MNSO) Valuation After Earnings, Dividend Declaration, and Share Buybacks

Investors following MINISO Group Holding (NYSE:MNSO) have plenty to digest this week. The company just posted its quarterly earnings, and the results were a mixed bag. Sales continued to surge compared to last year, but net income and earnings per share trended lower. At the same time, management announced a fresh semi-annual dividend for shareholders and shared updates on an active buyback program that has already retired a meaningful slice of shares. This latest combination of rapid sales growth alongside declining bottom-line profits is catching the market’s attention. Over the past month, MINISO’s stock price has climbed roughly 34%, and over the past 3 months, it is up 45%. Momentum has picked up sharply, even as the stock dipped earlier this year. Growing revenue, dividends, and share repurchases have clearly helped shape expectations and perhaps raised new questions about risk and reward for MINISO holders. So after this run and the recent updates from management, is MINISO Group Holding trading below its real value, or are investors already counting on brighter days ahead?

Most Popular Narrative: 43.6% Undervalued

According to user SuEric, the prevailing view is that MINISO Group Holding is significantly undervalued relative to its fair value, with a potential for outsized future gains. The narrative sets a target based on robust earnings projections and ambitious multi-year growth plans.

Strong Q1 2024 Performance: In Q1 2024, $MNSO revenue surged 26% year-on-year to $515.7 million, with adjusted EBITDA margin expanding by 200 basis points to 25.9%. This growth was fueled by a robust strategy of opening new stores globally. Aggressive Expansion Plans: $MNSO plans to open 900 to 1,100 stores annually from 2024 to 2028, aiming for a revenue CAGR of over 20%. As operational efficiency improves, sustained EBITDA margin growth is expected, enhancing the potential for higher dividends.

Think MINISO’s rally is over? Think again. This narrative relies on future growth assumptions that are more ambitious than you might expect. Which financial leap drives this eye-catching fair value? The secret lies in its expansion blueprint and profit targets, but only a deep dive reveals the boldest assumptions fueling this price tag.

Result: Fair Value of $44.06 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain as global expansion may slow or margins could contract. This could potentially challenge the optimistic assumptions underpinning MINISO’s undervaluation case.

Find out about the key risks to this MINISO Group Holding narrative.

Another View: Multiples Raise a Question

Stepping away from fair value estimates, a look at how the company's price compares to industry norms paints a different picture. Using this approach, the shares appear a bit more expensive. Could the market be running ahead of itself?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding MINISO Group Holding to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own MINISO Group Holding Narrative

If you see the story differently or want to weigh the facts for yourself, you can craft your own narrative in just a few minutes. So why not Do it your way?

A great starting point for your MINISO Group Holding research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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