2023-11-21 11:59:27 ET
Miniso (NYSE: MNSO) stock price has had a strong performance this year, outperforming most retailers. The shares have surged by over 100% this year, outperforming the SPDR Retail ETF (XRT), which has barely moved. It has also beaten stocks like Walmart, Target, Kohls, and Lowe’s.
Global growth continues
Miniso is a Chinese retail company worth over $8 billion. It is a holding company whose subsidiaries conduct business in China and other international markets, including the United States.
The company has been in recovery mode after facing major headwinds during the pandemic. In 2019, its annual revenues came in at ober 9.3 billion RMB and then it dipped to 8.9 billion RMB in 2020. In 2021 and 2022, the company’s revenues jumped to 9.07 billion RMB and 10 billion, respectively.
This recovery has accelerated this year as the total revenue has soared to 11.47 billion RMB. It has also become profitable as its profits for 2023 came in at RMB 1.78 billion or $245 million.
Results published this week revealed that the company’s revenues and store openings continued rising in its first quarter. Revenues jumped by 36.7% to $519 million while its adjusted EBITDA was $139 million.
The number of stores have continued rising. It now has 6,115 stores worldwide as they crossed the important point of 6,000. Most of these stores, 3,802, are in China while the rest are in international markets.
Miniso uses an asset-light model since it does not own most of its stores. In China, out of the 3,802 stores, it operates just 20 of them. The same is true in other international markets. This model helps to reduce its total operational costs and boost its margins. In a statement, the CEO said :
“We currently expect to add another 100-200 new stores on a net basis in China in the remaining calendar year of 2023, and we will strive to deliver our target of opening 350 to 450 stores in overseas markets.”
To a large extent, Miniso is a good retail company to invest in because of its strong growth and potential for profits. It is also a small but fast-growing player in China, the second-biggest economy in the world. Also, as the quote above shows, the firm has more room to grow internationally.
However, as with other Chinese companies, there are risks involved in the company. For one, its corporate structure is quite complicated since it operates tens of subsidiaries. This is a major risk, as we saw with the accounting issue with Luckin Coffee a few years ago.
Miniso stock price forecast
The daily chart shows that the Miniso share price has been in a strong bullish trend in the past few months. Recently, however, the stock has faced a major barrier as it struggled to move above the key resistance point at $28.22.
On the positive side, the shares remains above the 50-day and 100-day Exponential Moving Averages (EMA). The Relative Strength Index (RSI) has moved below the neutral point of 50. Also, the two lines of the MACD is hovering above the neutral point of zero.
Therefore, the outlook for Miniso stock price is neutral for now. More upside will only be confirmed if the stock moves above the key resistance point at $28.22. If this happens, the next point to watch will be the YTD high of $29.86.
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