FAST NEWS: Miniso’s Shares Surge on Big Overseas Revenue Gains

The latest: Retailer Miniso Group Holding Ltd. (MNSO.US; 9896.HK) announced on Thursday its revenue dropped 6% to 2.32 billion yuan ($350 million) in the three months to June, but its net profit rose 87.5% to 209 million yuan.

Looking up: Despite taking a hit from China’s “zero Covid” policy that led to widespread store closures during the quarter, Miniso’s revenue remained within its previous guidance of 2.1 billion yuan to 2.4 billion yuan, thanks to a nearly 50% year-on-year jump in revenue from its overseas operations.

Take Note: The company expects the Covid pandemic will continue to affect its results in the current quarter through September, forecasting it will lose more than 700 million yuan in gross merchandise volume (GMV).

Digging Deeper: Miniso is known for its small, brightly lit stores selling stationery, cosmetics and other knickknacks, similar in style to Japanese chains such as Muji and Uniqlo. It was listed in Hong Kong in July this year, providing a hedge against a potential delisting from the U.S. as Washington and Beijing try to work out differences over information sharing. However, the company has recently faced some troubles, including a short-seller attack over its business model, and also a recent attack by some nationalistic Chinese for pretending to be a Japanese brand in order to hide its Chinese identity. The company eventually apologized and promised to remove the Japanese elements from its stores.

Market Reaction: Miniso’s Hong Kong shares surged 27.4% in early trade on Friday, but then gave back some of that before closing up 17.4% at HK$13.62 at the midday break. The shares are now 1.3% lower than their IPO price of HK$13.80.

Translation by Jony Ho

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