MINISO Doubles Its Share Repurchase Program – Buyback Wednesdays

MINISO Group Holding Limited (MNSO): $25.65

Key Insights

• MINISO has seen its stock rally sharply by 380% over the last year.
• MINISO announced a new dividend policy promising a 50% payout of earnings.
• Robust financial performance and expanding margins in FY2023 indicate the future might be bright for the company.

MINISO, a ten-year-old Chinese retailer offers products that are heavily influenced by Japanese design. It was listed on a U.S. exchange in 2020. Since its listing, the company managed to expand its intellectual property (IP) licenses from 17 to 80 including Barbie products. In its recent call transcript, the company mentioned that half of the store’s Stock Keeping Units (SKUs) related to the recent blockbuster “Barbie” series were sold out within the first 5 days of launch!

The company operates on a franchise model, and its retail partners open and operate their own stores under its brand name. They share part of in-store sales proceeds with the company and are responsible for the stores’ capital expenditure and operating expenses. This model carries both the potential for profitability and associated risks as individual franchisees might suffer if the company expands too rapidly. In its Q4 FY2023 report, the company stated that its per store sales increased by about 25%, excluding the impact of store closures last year. This figure looks promising and it is likely that the franchise model is working well for them thus far.

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