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

Overall MNSO gets a fundamental rating of 7 out of 10. We evaluated MNSO against 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 not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, MNSO could be worth investigating further for growth and quality investing!.



8

1. Profitability

1.1 Basic Checks

MNSO had positive earnings in the past year.
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

The Return On Assets of MNSO (15.56%) is better than 93.94% of its industry peers.
MNSO's Return On Equity of 24.58% is amongst the best of the industry. MNSO outperforms 84.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.61%, MNSO belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MNSO is in line with the industry average of 11.22%.
The 3 year average ROIC (9.40%) for MNSO is below the current ROIC(20.61%), indicating increased profibility in the last year.
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.
MNSO's Operating Margin of 20.43% is amongst the best of the industry. MNSO outperforms 93.94% of its industry peers.
In the last couple of years the Operating Margin of MNSO has grown nicely.
Looking at the Gross Margin, with a value of 41.18%, MNSO is in line with its industry, 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

MNSO has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for MNSO has been increased compared to 1 year ago.
Compared to 5 years ago, MNSO has less shares outstanding
Compared to 1 year ago, MNSO has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 8.18 indicates that MNSO is not in any danger for bankruptcy at the moment.
MNSO has a Altman-Z score of 8.18. This is amongst the best in the industry. MNSO outperforms 93.94% of its industry peers.
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.
MNSO has a better Debt to FCF ratio (0.64) than 84.85% of its industry peers.
MNSO has a Debt/Equity ratio of 0.09. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of MNSO (0.09) is better than 69.70% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.09
Debt/FCF 0.64
Altman-Z 8.18
ROIC/WACC2.48
WACC8.3%

2.3 Liquidity

MNSO has a Current Ratio of 2.34. This indicates that MNSO is financially healthy and has no problem in meeting its short term obligations.
MNSO has a Current ratio of 2.34. This is amongst the best in the industry. MNSO outperforms 84.85% of its industry peers.
A Quick Ratio of 1.91 indicates that MNSO should not have too much problems paying its short term obligations.
The Quick ratio of MNSO (1.91) is better than 75.76% of its industry peers.
Industry RankSector Rank
Current Ratio 2.34
Quick Ratio 1.91

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 107.57% over the past year.
Looking at the last year, MNSO shows a very strong growth in Revenue. The Revenue has grown by 39.43%.
Measured over the past years, MNSO shows a quite strong growth in Revenue. The Revenue has been growing by 8.51% on average per year.
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

Based on the Price/Earnings ratio of 21.68, the valuation of MNSO can be described as rather expensive.
Based on the Price/Earnings ratio, MNSO is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 25.25. MNSO is around the same levels.
The Price/Forward Earnings ratio is 15.41, which indicates a correct valuation of MNSO.
Based on the Price/Forward Earnings ratio, MNSO is valued a bit cheaper than 60.61% of the companies in the same industry.
MNSO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.67, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 21.68
Fwd PE 15.41

4.2 Price Multiples

MNSO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. MNSO is cheaper than 72.73% of the companies in the same industry.
MNSO's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MNSO is cheaper than 60.61% of the companies in the same industry.
Industry RankSector Rank
P/FCF 25.62
EV/EBITDA 14.11

4.3 Compensation for Growth

MNSO's 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.
A more expensive valuation may be justified as MNSO's earnings are expected to grow with 27.74% in the coming years.
PEG (NY)0.46
PEG (5Y)N/A
EPS Next 2Y34.11%
EPS Next 3Y27.74%

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2

5. Dividend

5.1 Amount

MNSO has a yearly dividend return of 0.47%, which is pretty low.
MNSO's Dividend Yield is a higher than the industry average which is at 4.41.
With a Dividend Yield of 0.47, MNSO pays less dividend than the S&P500 average, which is at 2.45.
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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