Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


MINISO GROUP HOLDING LTD-ADR

New York Stock Exchange, Inc. / Consumer Discretionary / Broadline Retail

Fundamental Rating

7

Taking everything into account, MNSO scores 7 out of 10 in our fundamental rating. MNSO was compared to 34 industry peers in the Broadline Retail industry. MNSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. MNSO is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes MNSO very considerable for growth and quality investing!



8

1. Profitability

1.1 Basic Checks

In the past year MNSO was profitable.
In the past year MNSO had a positive cash flow from operations.
In multiple years MNSO reported negative net income over the last 5 years.
Each year in the past 5 years MNSO had a positive operating cash flow.

1.2 Ratios

MNSO's Return On Assets of 15.56% is amongst the best of the industry. MNSO outperforms 93.94% of its industry peers.
The Return On Equity of MNSO (24.58%) is better than 84.85% of its industry peers.
MNSO's Return On Invested Capital of 20.61% is amongst the best of the industry. MNSO outperforms 93.94% of its industry peers.
MNSO had an Average Return On Invested Capital over the past 3 years of 9.40%. This is in line with the industry average of 11.22%.
The last Return On Invested Capital (20.61%) for MNSO is above the 3 year average (9.40%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 15.56%
ROE 24.58%
ROIC 20.61%
ROA(3y)1.86%
ROA(5y)-0.89%
ROE(3y)2.57%
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)17.46%

1.3 Margins

Looking at the Profit Margin, with a value of 16.28%, MNSO belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
The Operating Margin of MNSO (20.43%) is better than 93.94% of its industry peers.
In the last couple of years the Operating Margin of MNSO has grown nicely.
With a Gross Margin value of 41.18%, MNSO perfoms like the industry average, outperforming 57.58% of the companies in the same industry.
MNSO's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 20.43%
PM (TTM) 16.28%
GM 41.18%
OM growth 3Y31.3%
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y8.36%
GM growth 5YN/A

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8

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), MNSO is creating value.
The number of shares outstanding for MNSO has been increased compared to 1 year ago.
The number of shares outstanding for MNSO has been reduced compared to 5 years ago.
The debt/assets ratio for MNSO is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 8.08 indicates that MNSO is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 8.08, MNSO belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
The Debt to FCF ratio of MNSO is 0.64, which is an excellent value as it means it would take MNSO, only 0.64 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.64, MNSO belongs to the best of the industry, outperforming 84.85% of the companies in the same industry.
MNSO has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
MNSO has a better Debt to Equity ratio (0.09) than 69.70% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.09
Debt/FCF 0.64
Altman-Z 8.08
ROIC/WACC2.48
WACC8.31%

2.3 Liquidity

A Current Ratio of 2.34 indicates that MNSO has no problem at all paying its short term obligations.
With an excellent Current ratio value of 2.34, MNSO belongs to the best of the industry, outperforming 84.85% of the companies in the same industry.
MNSO has a Quick Ratio of 1.91. This is a normal value and indicates that MNSO is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.91, MNSO is in the better half of the industry, outperforming 75.76% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.34
Quick Ratio 1.91

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8

3. Growth

3.1 Past

MNSO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 107.57%, which is quite impressive.
The Revenue has grown by 39.43% in the past year. This is a very strong growth!
The Revenue has been growing by 8.51% on average over the past years. This is quite good.
EPS 1Y (TTM)107.57%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q82.76%
Revenue 1Y (TTM)39.43%
Revenue growth 3Y8.51%
Revenue growth 5YN/A
Revenue growth Q2Q54%

3.2 Future

The Earnings Per Share is expected to grow by 27.74% on average over the next years. This is a very strong growth
Based on estimates for the next years, MNSO will show a very strong growth in Revenue. The Revenue will grow by 24.45% on average per year.
EPS Next Y47.1%
EPS Next 2Y34.11%
EPS Next 3Y27.74%
EPS Next 5YN/A
Revenue Next Year35.92%
Revenue Next 2Y28.29%
Revenue Next 3Y24.45%
Revenue Next 5YN/A

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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6

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 22.84, which indicates a rather expensive current valuation of MNSO.
Compared to the rest of the industry, the Price/Earnings ratio of MNSO indicates a somewhat cheap valuation: MNSO is cheaper than 66.67% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.20, MNSO is valued at the same level.
Based on the Price/Forward Earnings ratio of 16.24, the valuation of MNSO can be described as correct.
Based on the Price/Forward Earnings ratio, MNSO is valued a bit cheaper than the industry average as 60.61% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of MNSO to the average of the S&P500 Index (21.63), we can say MNSO is valued slightly cheaper.
Industry RankSector Rank
PE 22.83
Fwd PE 16.23

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MNSO indicates a somewhat cheap valuation: MNSO is cheaper than 72.73% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MNSO indicates a somewhat cheap valuation: MNSO is cheaper than 60.61% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 26.98
EV/EBITDA 13.86

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MNSO has an outstanding profitability rating, which may justify a higher PE ratio.
MNSO's earnings are expected to grow with 27.74% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.48
PEG (5Y)N/A
EPS Next 2Y34.11%
EPS Next 3Y27.74%

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2

5. Dividend

5.1 Amount

With a yearly dividend of 0.47%, MNSO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.41, MNSO pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.47, MNSO pays less dividend than the S&P500 average, which is at 2.44.
Industry RankSector Rank
Dividend Yield 0.47%

5.2 History

MNSO has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1

5.3 Sustainability

MNSO pays out 40.99% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP40.99%
EPS Next 2Y34.11%
EPS Next 3Y27.74%

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