Stock Analysis & Valuation MINISO Group Holding Ltd (9896.HK)

• Previous Close: HK$36.80
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, HK$	Upside, %
Artificial intelligence (AI)	47.50	29
Intrinsic value (DCF)	96.74	163
Graham-Dodd Method	4.20	-89
Graham Formula	20.50	-44

Strategic Investment Analysis

Company Overview

MINISO Group Holding Limited is a leading Chinese specialty retailer revolutionizing the global lifestyle products market. Founded in 2013 and headquartered in Guangzhou, MINISO operates a vast network of retail stores offering high-quality, design-driven lifestyle products at affordable prices. The company's product portfolio spans home decor, small electronics, textiles, accessories, beauty tools, toys, cosmetics, personal care, snacks, fragrances, and stationery under its flagship MINISO brand. Additionally, MINISO has expanded into the rapidly growing pop toy segment through its TOP TOY brand, featuring blind boxes, toy bricks, model figures, and collectible dolls. With operations across China, Asia, the Americas, Europe, and Indonesia, MINISO has established itself as a global retail phenomenon, leveraging its unique 'IP-led lifestyle product' business model. The company's success stems from its ability to identify and capitalize on emerging consumer trends while maintaining competitive pricing through efficient supply chain management and strategic supplier relationships.

Investment Summary

MINISO presents an attractive investment opportunity with strong financial metrics including HKD 16.99 billion in revenue, HKD 2.62 billion net income, and robust operating cash flow of HKD 2.17 billion. The company's low beta of 0.187 suggests defensive characteristics relative to market volatility. With a healthy cash position of HKD 6.33 billion against HKD 3.11 billion total debt, MINISO maintains solid financial flexibility. The dividend yield supported by HKD 1.20 per share distribution enhances shareholder returns. However, investors should monitor the company's international expansion execution risks, potential supply chain disruptions, and increasing competition in the value retail segment. The pop toy market through TOP TOY represents both growth opportunity and fashion risk given the cyclical nature of toy trends.

Competitive Analysis

MINISO's competitive advantage stems from its unique positioning at the intersection of design, affordability, and rapid product iteration. The company has successfully created a distinct retail concept that combines Japanese minimalist design aesthetics with Chinese manufacturing efficiency. MINISO's strength lies in its agile supply chain that enables quick response to trending consumer preferences, typically bringing new products to market within 21 days. The company's dual-brand strategy—MINISO for lifestyle products and TOP TOY for pop toys—provides diversification across complementary consumer segments. MINISO's extensive store network, both company-owned and franchised, creates significant barriers to entry through scale advantages in procurement and distribution. The company's IP collaboration strategy, partnering with popular characters and brands, drives customer engagement and differentiation from generic competitors. However, MINISO faces challenges from the fragmented nature of the value retail market and must continuously innovate to maintain its design leadership. The company's international expansion requires careful localization to adapt to different market preferences while preserving its core value proposition.

Major Competitors

• Ryohin Keikaku Co., Ltd. (MUJI): MUJI is MINISO's most direct conceptual competitor with its minimalist design philosophy and lifestyle product focus. The Japanese company offers higher-quality products at premium price points, targeting a more affluent demographic. MUJI's strengths include strong brand recognition, consistent design language, and established global presence. However, MUJI's higher pricing and slower product iteration make it less accessible to mass market consumers compared to MINISO's aggressive pricing strategy.
• Daiso Industries Co., Ltd. (DII): Daiso operates the famous 100-yen store concept, competing directly on price in the value retail segment. The company's strength lies in its extreme cost leadership and vast product assortment at ultra-low price points. Daiso has extensive international presence, particularly in Asia. However, Daiso typically offers more basic, functional products compared to MINISO's design-focused, trend-driven assortment, giving MINISO differentiation in product aesthetics and quality perception.
• Alibaba Group Holding Limited (BABA): Alibaba competes through its e-commerce platforms (Taobao, Tmall) that host numerous sellers offering similar lifestyle products. Alibaba's strengths include massive scale, digital ecosystem integration, and data-driven consumer insights. However, Alibaba lacks the curated physical retail experience and brand consistency that MINISO offers. The online marketplace model also struggles with quality control and counterfeit issues that MINISO's controlled retail environment avoids.
• JD.com, Inc. (JD): JD.com competes through its e-commerce platform and increasingly through physical retail investments. JD's strengths include superior logistics capabilities, authentic product guarantee, and growing offline presence. However, JD focuses more on electronics and general merchandise rather than the curated lifestyle concept that defines MINISO. JD's model is more inventory-heavy and less trend-responsive compared to MINISO's agile retail approach.
• Five Below, Inc. (FIVE): Five Below operates as a value retailer targeting teens and pre-teens with products priced at $5 and below. The company's strengths include strong US market presence, targeted demographic focus, and seasonal product strategy. However, Five Below's product assortment is more toy and novelty-focused with less emphasis on the comprehensive lifestyle positioning that MINISO has developed. The company also has limited international presence compared to MINISO's global ambitions.
• Nome (NAME): Nome is a direct Chinese competitor with a similar business model of design-driven lifestyle products at affordable prices. The company has rapidly expanded in China and internationally, often located near MINISO stores. Nome's strengths include aggressive pricing, trendy product designs, and rapid store expansion. However, Nome lacks MINISO's scale, brand recognition, and the additional revenue stream from the TOP TOY pop toy business that provides diversification.