Miniso's 2H Margins Could Improve on Overseas Peak Season

Miniso's 2H Margins Could Improve Sequentially on Overseas Peak Season

Miniso's second-half margins are likely to improve sequentially as overseas stores should see stronger sales from the peak season, say DBS Group Research analysts Clement Xu and Mavis Hui. The U.S. market has been the Chinese lifestyle retailer's largest margin drag due to its directly operated store model. However, the operating margin for the U.S. segment has already started to recover and should continue to gain as benefits from its operations' scale materialize.

DBS cuts its Hong Kong share target price to HK$39.00 from HK$46.00 and trims its ADR target price to US$20.00 from US$24.00. Shares drop 2.2% to HK$23.82, while the ADRs last closed 3.8% lower at US$12.47.