The U.S. stock market value fell 64% from its listing
Founded in 2013, MINISO was listed on the New York Stock Exchange in 2020, with the title of “the first stock in the retail of household and household goods”, raising about 656 million US dollars. On the day the bell went public, the market value of MINISO was close to US$7 billion at one point, and then exceeded US$10 billion at one point.
However, the operating performance of MINISO after its listing disappointed investors. According to its previously submitted prospectus to the Hong Kong Stock Exchange, for the fiscal year 2019-2021 ended June 30, MINISO achieved profits of -294 million yuan, -260 million yuan, and -1.429 billion yuan respectively during the period. The three-year cumulative loss was 1.983 billion yuan.
As of the close on June 21, MINISO reported US$8.2 per share, up 6.91%, but the market value of US$2.512 billion was less than two years from US$6.992 billion when it went public in the United States in October 2020. It has fallen by 64%.
“Increasing revenue but not profit” may be caused by store expansion
Some analysts pointed out that the unsatisfactory net profit performance of MINISO has a certain relationship with its continuous store expansion. As of December 31, 2021, MINISO has more than 5,000 stores worldwide, of which more than 3,100 are located in China and more than 1,900 are located overseas. Under the frenzied expansion, MINISO’s single-store revenue is declining, and costs are also increasing.
The recurrence of the epidemic has also hit MINISO, which relies almost entirely on offline stores. As of March this year, MINISO has temporarily closed more than 300 stores in China. In overseas markets, 4% of the total number of stores have not resumed operations. , and offline logistics and transportation are blocked, and various problems have occurred in the product supply chain in overseas markets.
In addition to the impact of the epidemic on store performance, sales efficiency also affected MINISO. According to the previously submitted prospectus of the Hong Kong Stock Exchange, the proportion of MINISO’s sales and distribution expenses in the current gross profit margin rose from 33% to 50% in the 2019-2021 fiscal year. Among them, promotion and advertising spending increased by 67.22% in fiscal year 2021, but revenue growth in the same period was only 1.03%.
Industry insiders analyzed that the growth of marketing expenses and operating income was out of sync, reflecting that under the influence of the epidemic, MINISO faced more difficult sales, and therefore faced more arduous market competition pressure, resulting in the “increase in revenue but not increase in revenue”. profit” dilemma.