Issue #28

Earnings from MINISO and Vipshop could set the tone for value-driven retail heading into 2026

As the global retail landscape braces for a fresh round of earnings, two Asian retail powerhouses are ready to take center stage this week — each thriving on affordability, efficiency, and an uncanny ability to turn economic uncertainty into opportunity.

👉 One has become a global lifestyle phenomenon, expanding its footprint across continents with design-driven products and a fast-scaling franchise model.
👉 The other dominates China’s off-price flash-sale market, turning budget-savvy shopping into a high-margin, loyal-customer ecosystem.
👉 Both are scheduled to report earnings this week — with investors watching closely for signs of sustained growth amid shifting consumer trends.

In this edition, we spotlight MINISO Group Holding (NYSE: MNSO) and Vipshop Holdings Limited (NYSE: VIPS) — two profitable retailers redefining value in a post-pandemic world, and both potentially poised to surprise when results hit.

MINISO Group Holding (NYSE: MNSO)

MINISO Group Holding (NYSE: MNSO) is a global value retailer known for its design-led, low-cost lifestyle products. Positioned between discount stores and high-end specialty retailers, MINISO leverages a high-turnover, high-volume model to offer a wide array of goods, from household items and cosmetics to toys and electronics accessories. The company's brand promise centers on providing "high-quality, low-priced" products, appealing particularly to budget-conscious, trend-aware consumers aged 18 to 35.

Business Model and Revenue Streams 📦

MINISO's core business is built on a highly efficient "MINISO Retail Partner" (franchise) model and a sophisticated supply chain.

• Retail Product Sales: This constitutes the vast majority (around 95%) of its revenue. Revenue is generated from the sale of products across its diverse categories through its global network of stores.
• Franchise and Other Revenue: A smaller but growing portion of revenue comes from its franchise operations. Approximately 90% of MINISO's stores are franchised, which allows for rapid global expansion with significantly lower capital expenditure and operational risk for the company.
• TOP TOY Brand: MINISO also operates the TOP TOY brand, focusing on collectible pop toys, which offers a premium-focused, high-growth, high-margin revenue stream separate from its core MINISO brand.

Macroeconomic Impact Analysis

MINISO’s business is resilient to typical inflationary pressures due to its value-driven proposition. In a macro-environment characterized by high inflation and economic uncertainty, consumers often trade down from premium brands to affordable, quality alternatives, which benefits MINISO’s "high-quality, low-priced" positioning.

• Beneficial Factors:
• "Trade-Down" Consumer Behavior: Global economic concerns drive consumers to seek value, boosting demand for MINISO's affordable products.
• Efficient Sourcing: The company's focus on low-cost sourcing, primarily from China, allows it to maintain high-profit margins despite maintaining low retail prices.
• Risk Factors:
• Global Expansion and Geopolitics: International expansion exposes the company to currency fluctuation risks and potential impacts from geopolitical trade tensions which could affect its global supply chain.

Recent Performance and Corporate Developments 📈

MINISO has demonstrated accelerating momentum in its recent quarters, largely driven by successful global expansion and strong performance in its TOP TOY segment.

Recent Quarter (June Quarter 2025) Financial Highlights: 💰

The company reported strong unaudited financial results for the June Quarter (Q2 of the calendar year), surpassing its own guidance.

• Total Revenue: +23.1% YoY to RMB4,966.1M ($693.2M). Exceeded guidance, driven by store expansion.
• Adjusted Net Profit: +10.6% YoY to RMB691.5M ($96.5M). Solid growth, demonstrating profitability.
• Gross Margin: 44.3% (vs. 43.9% last year). Margin expansion due to stronger overseas and TOP TOY revenue.
• Same-Store Sales Growth (SSSG): Positive (after prior quarter contraction). Rebounding sales momentum across segments.

Key Operational Growth:

• Overseas Growth: Overseas markets saw robust growth, increasing their revenue contribution and helping to drive the overall increase in gross margin.
• TOP TOY Performance: Revenue from the TOP TOY brand increased by 87.0% year-over-year, showcasing its potential as a significant secondary growth engine.

Strategic Initiatives and Mergers: 🤝

There were no recent mergers or significant acquisitions announced in the immediate preceding quarters. The key corporate development is the continued execution of its multi-brand and globalization strategy. This includes:

1. Aggressive Global Store Rollout: Continuing to expand its store network, particularly in overseas markets, which is the primary driver of revenue growth.
2. IP and Brand Partnerships: Leveraging intellectual property (IP) and brand collaborations to drive product innovation and attract high-spending customers, which is crucial to maintaining the freshness of its product line.
3. Shareholder Returns: The company recently announced an interim dividend of $0.2896 per ADS, reflecting management's confidence and commitment to returning capital to shareholders.

Path to Profitability and Fair Value 🎯

MINISO is already highly profitable, reporting strong adjusted net profit in its recent quarters. The path to sustained and expanded profitability centers on two core pillars:

• Overseas and TOP TOY Expansion: The company has been achieving a higher gross margin from its overseas business and its TOP TOY segment. Continued growth in these higher-margin segments is the clearest path to improving the overall company-wide margin.
• Scale and Supply Chain Optimization: The combination of a rapid, low-CAPEX franchise model and a disciplined, high-volume sourcing strategy maintains excellent operating leverage.

Fair Value Assessment

The fair value assessment for MINISO is generally favorable, though with a premium that reflects its high growth rate.

• Valuation Ratios: MINISO trades at a Price-to-Earnings (P/E) ratio that is generally in line with or slightly below the average for its retail industry peers, especially when factoring in its projected earnings growth. A Discounted Cash Flow (DCF) analysis in early November 2025 suggested the stock was trading at a significant discount (over 30% undervalued) compared to its estimated intrinsic value of over $31.00 per share.
• Conclusion: While its valuation metrics sometimes appear high due to its aggressive growth, the underlying profitability and international expansion narrative suggest the stock is either fairly priced or undervalued relative to its growth potential and intrinsic value.

Analyst Estimates and Ratings 📊

The consensus from analysts is strongly positive, particularly following the strong June Quarter 2025 earnings.

• Consensus Rating: The average brokerage recommendation (ABR) is a Strong Buy (typically around 1.70 on a 1-5 scale, with 1 being Strong Buy). In the last 30 days, analyst sentiment has been extremely bullish, with firms like Jefferies upgrading the stock from Hold to Buy and raising their price targets.
• Price Target: The average 12-month price target is approximately $27.74 (based on data current to mid-November 2025), suggesting a potential upside of over 29% from its current price level.

Investor-Focused Takeaway: Is MNSO Right for Your Portfolio?

MINISO offers exposure to a high-growth global retail story that is proving resilient in a challenging consumer environment. Its franchise model enables efficient, low-risk expansion, while the IP-centric product strategy ensures customer engagement and product turnover.

What to Watch in the Near Term: 📈

• September Quarter 2025 Earnings: The company is set to report its next earnings on November 21, 2025. Investors should look for continued growth in overseas revenue and TOP TOY performance, and further positive momentum in Same-Store Sales Growth.
• Gross Margin Trend: Watch the gross margin. A continued upward trend, driven by the shift towards higher-margin international and TOP TOY sales, will confirm the path to sustained overall profitability expansion.
• New Store Openings: Monitor the pace of net new store openings, especially in high-potential overseas markets, as this remains the primary engine for top-line revenue growth.

Recommendation

MINISO Group Holding (MNSO) is viewed as a Strong Buy based on its exceptional growth trajectory, expanding margins from overseas markets and its TOP TOY brand, a capital-efficient business model, and strong analyst support. Its value proposition makes it a key beneficiary of the current cost-conscious consumer trend.

Vipshop Holdings Limited (NYSE: VIPS)

Vipshop is a leading Chinese online discount retailer specializing in branded products, particularly apparel, footwear, and accessories, which it sells through its innovative flash sale model. Unlike traditional e-commerce giants that sell a wide range of goods, Vipshop focuses on the off-price retail segment, offering deeply discounted, time-limited sales events to its loyal customer base.

Business Model and Revenue Streams 📦

Vipshop's business model is characterized by its focus on exclusivity, urgency, and efficiency:

• Core Business: The company operates primarily as an online discounter that purchases inventory directly from a vast network of brand partners (both domestic and international). This direct sourcing of off-season or overstock inventory at deep discounts allows it to offer high-quality branded products to consumers at significant markdowns.
• Revenue Streams:
  • Product Sales: The bulk of revenue comes from selling these branded products at a mark-up on its online platforms ($\text{vip.com}$ and $\text{vipshop.com}$).
  • Value-Added Services: The company also generates revenue from its logistics services (warehousing and distribution) and advertising/marketing services provided to its brand partners.
• Customer Loyalty: The SVIP (Super VIP) loyalty program is a key driver, with active SVIP members consistently accounting for over half of total online spending, indicating high customer retention and engagement.

Macroeconomic Impact Analysis

Vipshop is well-positioned to weather macroeconomic headwinds like the broader slowdown in China's consumer spending.

• Beneficial Factors: In periods of economic caution or slower growth, consumers in China, like those globally, become more value-conscious. Vipshop's core value proposition—high-quality branded products at deep discounts—makes it a defensive play in the consumer retail sector, benefiting from the consumer shift toward off-price channels.
• Risk Factors: The primary risks are the intense competition from major Chinese e-commerce platforms (Alibaba, JD.com, PDD) that increasingly offer their own discount channels, and general exposure to any dramatic regulatory shifts in China's technology sector.

Recent Performance and Corporate Developments 📈

Vipshop has consistently demonstrated strong financial discipline and healthy profitability, outperforming revenue guidance in recent quarters despite the challenging market environment.

Recent Quarter (Q2 2025) Financial Highlights: 💰

• Total Revenue: Approximately -4.0% YoY to approximately $3.54 billion. Exceeded company guidance.
• Adjusted EPS: Exceeded forecast (RMB 4.06 vs. RMB 3.98 forecast). Strong profitability maintained.
• Gross Margin: 23.5% (vs. 23.6% last year). Stable, high-margin business.
• SVIP Growth: +15% YoY in active SVIP members. High-value customer base is expanding.

Strategic Initiatives and Mergers: 🤝

There have been no major mergers or acquisitions in the recent period. The company's strategy has been focused on internal optimization and shareholder returns:

• Core Focus on Apparel: Management has reiterated its commitment to the high-margin apparel category, which is its competitive advantage, while optimizing other, less profitable categories.
• Shareholder Returns: Vipshop has a consistent record of returning capital to shareholders through share repurchase programs and dividends, signaling management confidence in the company’s cash flow and long-term financial health.
• Upcoming Earnings: Vipshop is scheduled to release its Third Quarter 2025 financial results on Thursday, November 20, 2025, before the U.S. market open, which will be the next major catalyst for the stock.

Path to Profitability and Fair Value 🎯

Vipshop is already a highly profitable company, consistently reporting GAAP net income. Its strategy for increased profitability is centered on:

• Focus on SVIP Members: Increasing the penetration of its higher-spending, more loyal SVIP members ensures a more stable and higher-margin revenue base.
• Operational Efficiency: Continuous optimization of its in-house logistics and a disciplined approach to inventory procurement are critical to maintaining and improving its robust Gross Margin (over 23%).

Fair Value Assessment

Vipshop is generally considered to be undervalued relative to its profitability metrics and cash generation.

• Valuation Ratios: The company trades at a highly attractive forward Price-to-Earnings (P/E) ratio compared to major U.S. or global e-commerce peers, reflecting a significant discount due to its China listing. Its strong free cash flow and cash position further bolster the argument for an attractive long-term value.
• Conclusion: The stock's current price appears to be significantly below the estimated intrinsic value calculated by many valuation models, suggesting it is a value opportunity for a profitable, growing e-commerce business.

Analyst Estimates and Ratings 📊

Analyst sentiment for Vipshop is overwhelmingly positive, reflecting its consistent financial performance and value proposition.

• Consensus Rating: The consensus rating from analysts is a "Moderate Buy" or "Buy". Recent analyst updates confirm this sentiment, with a high percentage of "Buy" or "Strong Buy" ratings reported in the last 30 days.
• Price Target: The average 12-month price target from major analysts ranges from $19.10 to $19.60, suggesting a potential upside from the current share price of approximately 5% to 8%, with some high estimates reaching as high as $21.00.

Investor-Focused Takeaway: Is VIPS Right for Your Portfolio?

Vipshop offers a compelling blend of profitability, value, and resilience in the Chinese consumer market. It is a dominant player in the off-price e-commerce niche, a segment that performs well during economic uncertainty.

What to Watch in the Near Term: 📈

• Q3 2025 Earnings (Nov 20th): Focus on the company’s guidance for the upcoming Q4 (the key holiday season in China). Any sign of re-acceleration in revenue growth or further margin expansion will be a major positive catalyst.
• SVIP Member Trend: Watch for continued double-digit growth in SVIP members, as this cohort is crucial to the company's long-term margin stability and profitability.
• Shareholder Returns: Monitor the pace and size of their ongoing share repurchase program, as this directly supports the stock price and underscores management's confidence in the company's undervaluation.

Recommendation:

Vipshop (VIPS) is a highly profitable, cash-generating business trading at an attractive valuation. It represents a strong investment thesis for those seeking exposure to the resilient, value-focused segment of China's retail market. Given its strong underlying fundamentals, consistent earnings beats, and positive analyst consensus, it remains a Strong Buy candidate ahead of its Q3 earnings release.

Final Take: Two Value-Driven Retailers, One Global Opportunity

As the world’s consumers become more budget-conscious and brand-savvy, MINISO and Vipshop are delivering where it counts — quality, affordability, and profit.

Whether it’s design-led expansion across global malls or flash-sale dominance in the Chinese e-commerce landscape, both companies are executing with precision — and earnings this week could be the spark for their next rally.

🎨 MINISO (MNSO) – The Lifestyle Brand Scaling Globally
✔ 23% YoY revenue growth driven by overseas markets
✔ TOP TOY brand revenue up 87% YoY — a powerful second engine
✔ Gross margins expanding with global scale and product innovation
➤ Best for: Investors looking for a high-growth, capital-light consumer brand riding the global shift toward affordable luxury.

💼 Vipshop (VIPS) – China’s Flash-Sale Profit Machine
✔ GAAP-profitable with expanding EPS and strong free cash flow
✔ SVIP loyalty base driving stable, high-margin repeat revenue
✔ Trading at a discount despite strong fundamentals and cash returns
➤ Best for: Value investors seeking exposure to China’s consumer resilience with consistent profitability and capital efficiency.

Investor Insight:

🌍 Want an internationally expanding retail brand with franchise scalability? → MNSO

🛒 Want a cash-rich, low-multiple e-commerce stock with loyal buyers? → VIPS

In a world of retail volatility, these two under-$30 names are quietly building shareholder value through discipline, data, and design. Their Q3 earnings may not just confirm resilience — they could signal retail leadership for 2026.

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Happy Trading
​— Team Premium Stock Alerts