20-F: MINISO Group Holding Limited Files 2025 Annual Report

MINISO Group Holding Limited has filed its annual report on Form 20-F for the fiscal year ended December 31, 2025, detailing financial performance, business operations, and risk factors.

Summary

• MINISO Group Holding Limited has filed its annual report on Form 20-F for the fiscal year ended December 31, 2025.
• The report covers financial performance, business operations, risk factors, and corporate governance.
• The company reported revenue of RMB21,443.8 million (US$3,066.4 million) for the fiscal year ended December 31, 2025, an increase of 26.2% year-over-year.
• Gross profit increased by 26.3% to RMB9,648.1 million (US$1,379.7 million), with a gross margin of 45.0%.
• Profit for the year was RMB1,209.8 million (US$173.0 million), a decrease from RMB2,635.4 million in the prior year, impacted by increased finance costs and share of loss from equity-accounted investees.
• The company's store network expanded to 8,151 MINISO stores globally and 334 TOP TOY stores as of December 31, 2025.
• Significant investments were made in directly operated stores, particularly in overseas markets like the U.S., contributing to a 49.6% increase in selling and distribution expenses.
• The company issued US$550 million in equity linked securities due 2032 in January 2025.
• The report details various risks related to doing business in China, regulatory environments, competition, and supply chain management.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this filing as mixed; while revenue and gross profit show strong growth, the significant decrease in net profit, increased finance costs, and substantial losses from equity-accounted investees indicate headwinds that temper overall sentiment.

Positives

• Revenue increased by 26.2% year-over-year to RMB21,443.8 million (US$3,066.4 million).
• Gross profit increased by 26.3% year-over-year to RMB9,648.1 million (US$1,379.7 million).
• Gross margin improved slightly to 45.0% from 44.9% in the prior year.
• MINISO brand revenue grew by 22.0%, with overseas revenue contributing 44.2% of MINISO brand revenue.
• TOP TOY brand revenue increased significantly by 94.8%.
• The company's store network continued to expand, reaching 8,151 MINISO stores globally and 334 TOP TOY stores by year-end 2025.
• Revenue per MINISO store increased by approximately 8.5% year-over-year.
• The company successfully met its tax levy commitments to the Guangzhou local government for the five-year period.
• The company obtained ISO/IEC 27001:2022 and ISO/IEC 27701:2019 certifications for information security and privacy protection.

Negatives

• Profit for the year decreased to RMB1,209.8 million (US$173.0 million) from RMB2,635.4 million in the prior year.
• Net finance costs increased significantly to RMB326.5 million (US$46.7 million) from net finance income of RMB25.8 million, primarily due to increased interest expenses on the 2032 Securities and bank loans for the Yonghui acquisition.
• The company reported a share of loss from equity-accounted investees of RMB834.5 million (US$119.3 million) in 2025, compared to a profit of RMB6.0 million in 2024, largely due to the Yonghui Superstores investment.
• Changes in fair value of redemption liabilities resulted in a loss of RMB158.5 million (US$22.7 million) in 2025.
• Selling and distribution expenses increased by 49.6% year-over-year due to investments in directly operated stores and increased promotion/advertising.
• The company faces ongoing risks related to the PCAOB's ability to inspect auditors in China, which could lead to trading prohibitions under the HFCAA.
• The company has not obtained fire control inspection certificates for nine directly operated stores in mainland China.
• The company is involved in a securities class action lawsuit in the U.S., with an uncertain outcome.
• The company recorded an impairment loss on non-current assets of RMB35.6 million (US$5.1 million) in 2025.

Risks

• The ADSs may be prohibited from trading in the United States under the HFCAA if the PCAOB is unable to inspect auditors in China for two consecutive years.
• The PRC government has significant authority to regulate operations, which could lead to material changes in operations and the value of securities.
• Changes in China's or global economic, political, or social conditions or government policies could adversely affect the business.
• Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit legal protections.
• Litigation and negative publicity surrounding China-based companies listed in the U.S. may result in increased regulatory scrutiny and negatively impact stock prices.
• The company's reliance on dividends from PRC subsidiaries for cash needs could be impacted by PRC regulations.
• Failure to maintain and enhance brand strength could adversely affect business and operating results.
• Economic downturns could materially affect consumer discretionary spending and negatively impact business.
• Intense competition in the retail industry could lead to loss of market share and consumers.
• Failure to manage inventory effectively could lead to obsolescence, write-downs, and negatively affect financial condition.
• The company's international operations are subject to various costs and legal, regulatory, political, and economic risks.
• Illegal actions or misconduct by Retail Partners, local distributors, or suppliers could materially and adversely affect the business and reputation.
• The company may not be able to prevent unauthorized use of its intellectual property.
• Fluctuations in currency exchange rates may lead to volatility in results of operations.
• Global inflationary pressures could negatively affect results of operations and cash flows.
• The company is exposed to risks associated with the potential spin-off of TOP TOY.
• The company may need to defend itself against patent, trademark, or other proprietary rights infringement claims.
• Failure to protect personal or confidential information against security breaches could subject the company to significant reputational, financial, and legal consequences.

Future Outlook

The company plans to continue its globalization strategy, strengthen product capabilities, and optimize its store network. This includes optimizing regular stores, leveraging supply chain advantages, developing more store formats, and enhancing consumer engagement through digital channels and membership programs. Overseas expansion will focus on optimizing localized operations, customizing products and marketing, and deepening cooperation with popular IPs.

Management Comments

• The company believes its dynamic product development, efficient supply chain, and deep operation know-how backed by digitalization are critical to its success and form the backbone of its business.
• The company aims to regularly launch a significant number of new MINISO SKUs on a frequent and ongoing basis, carefully selected from a large library of product ideas, with an average of around 1,600 SKUs launched per month in 2025.
• The company believes its efficient supply chain sets the foundation for its competitive product pricing strategy.
• The company's membership program has been effective in driving customer spending and providing valuable consumer data for personalized marketing efforts.

Industry Context

StockSavvy.ai notes that MINISO's performance reflects broader trends in the global retail market, particularly the demand for trendy, IP-driven lifestyle products and the growth of the pop toy segment. The company's expansion into overseas markets and its focus on digital engagement and supply chain efficiency are key strategies for navigating a competitive landscape.

Comparison to Industry Standards

• MINISO's gross margin of 45.0% is competitive within the fast-fashion and variety retail sectors, though direct comparisons are difficult due to the unique product mix.
• The company's rapid store network expansion, particularly through its asset-light Retail Partner model, is a key differentiator compared to many traditional retailers.
• The significant increase in selling and distribution expenses (49.6%) reflects a strategic investment in growth, particularly in directly operated stores and overseas markets, which is a common strategy for global expansion but requires careful monitoring of ROI.
• The company's revenue growth of 26.2% outpaces many traditional brick-and-mortar retailers, indicating strong market penetration and brand appeal, especially in its international segments.

Corporate Governance

Legal Proceedings

• A federal securities class action lawsuit was filed in August 2022 alleging misleading statements or omissions regarding business operations and financials. The court granted a motion to dismiss the further amended complaint on March 31, 2026, with prejudice, and plaintiffs have until May 1, 2026, to file a notice to appeal.
• Two labor disputes in California alleging failure to pay minimum wage, overtime, and provide meal/rest periods were settled for US$1,250,000 in February 2024.

Related Party Transactions

• Sales of products and provision of IT support and consulting services to entities under common control or significant influence of Mr. Guofu Ye, including Wow Colour Beauty Guangdong Technology Limited, Haydon (Shanghai) Technology Co., Ltd., Guangzhou Chuyunju Catering Service Co., Ltd., and others.
• Sales of goods to KOURITEN LIMITED and Fujian Yuntong Supply Chain Co., Ltd., which are subsidiaries of equity-accounted investees.
• Lease agreements with related parties for properties used for store operations and storage.
• Loan provided to MINISO Winky Italy S.r.l. before its acquisition.
• The company purchased the remaining equity interest in MINISO Winky Italy S.r.l. in May 2025, ceasing its status as a related party.
• The company's controlling shareholders, Mr. Guofu Ye and Ms. Yunyun Yang, hold significant beneficial ownership through various holding entities, and make joint decisions on voting power.

Stakeholder Impact

• Shareholders: Potential dilution from share incentive plans, impact of controlled company status on governance, and risks associated with the securities class action lawsuit and potential trading prohibitions under HFCAA.
• Employees: Competitive compensation packages, training programs, and share-based incentives are provided. However, risks related to labor laws and potential under-contributions to social security and housing funds are noted.
• Suppliers: The company maintains relationships with over 2,000 suppliers and aims for mutually beneficial partnerships, with framework agreements typically lasting two years. Risks include potential supply disruptions and non-compliance with IP rights.
• Retail Partners and Distributors: The company relies heavily on these partners for store operations, with agreements outlining responsibilities and performance expectations. Risks include partner failures, non-compliance, and potential termination of relationships.
• Creditors: The company has outstanding loans and borrowings, including the 2032 Securities, and its ability to meet payment obligations is dependent on its overall financial performance and cash flow.

Next Steps

• Continue to expand and optimize the store network globally, focusing on directly operated stores in strategic overseas markets and leveraging the Retail Partner and distributor models.
• Further develop and enhance product capabilities, particularly focusing on IP collaborations and original IP development for the TOP TOY brand.
• Continue to invest in technology and digitalization to improve supply chain management, store operations, and customer engagement.
• Manage and mitigate risks associated with international operations, regulatory changes in China, and competition.
• Monitor the outcome of the securities class action lawsuit and potential impacts on the company.
• Continue to manage financial leverage and debt obligations, including the 2032 Securities.

Key Dates

Recommendation

While MINISO demonstrates strong revenue and gross profit growth, the significant decrease in net profit, increased finance costs, substantial losses from equity-accounted investees (Yonghui), and higher operating expenses due to expansion weigh on the outlook. The company's ability to manage these costs and integrate its strategic investments effectively will be crucial. The ongoing legal proceedings and regulatory risks associated with operating in China also warrant caution. Therefore, a 'hold' recommendation is appropriate, pending clearer signs of sustained profitability improvement and successful integration of recent large-scale investments.

Keywords

MINISO, Form 20-F, Annual Report, Retail, Lifestyle Products, Pop Toys, TOP TOY, Financial Results, SEC Filing, China, International Operations, E-commerce, Share Repurchase, Dividends, Corporate Governance, Risk Factors