Why Miniso Group Holding Ltd – Adr (NYSE: Mnso) Stock Is Rising

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MINISO Group Holding Ltd – ADR (NYSE: MNSO) stock rose over 14.7% on 21st December, 2020 (As of 9:58 am GMT-5; Source: Google finance) even though company in the first quarter of FY 21 has reported 30.7% year on year fall in the net revenue to RMB2,072.1 million (US$305.2 million), but increase of 33.4% from the previous fiscal quarter ended June 30, 2020. The year-over-year decline in revenue was mainly driven by the negative impact of COVID-19 on the Company’s international operations during the period. The pandemic had resulted in the temporary store closures, reduction of store operating hours, and shipment suspensions. Therefore, revenue generated from international markets, fell by 70.5% to RMB350.2 million (US$51.6 million) for the fiscal quarter ended September 30, 2020, from RMB1,185.4 million for the fiscal quarter ended September 30, 2019.

However, the quarter-over-quarter revenue growth was mainly driven by the Company’s initiatives to accelerate its store expansion. The revenue generated from international markets rose by 85.7% to RMB350.2 million (US$51.6 million) for the fiscal quarter ended September 30, 2020, from RMB188.5 million for the previous fiscal quarter ended June 30, 2020. The company delivered adjusted net profit for the fiscal quarter ended September 30, 2020, of RMB102.1 million (US$15.0 million), representing a decline of 74.6% from the fiscal quarter ended September 30, 2019, and an increase of 140.8% from the previous fiscal quarter ended June 30, 2020. The number of MINISO stores has risen from 3,913 as of September 30, 2019, and 4,222 as of June 30, 2020 to 4,330 as of September 30, 2020.

Meanwhile, despite challenging macroeconomic situation across the globe, the company had successfully completed the listing on the New York Stock Exchange. The company has completed its initial public offering of 30,400,000 ADSs, each representing four Class A ordinary shares of the Company, at a price of US$20.00 per ADS for a total offering size of US$608 million. The company intends to now utilize the access to the capital markets to enter the next stage of development, fuel the growth momentum, and enhance the shareholder base.

Moreover, operating loss was RMB2.1 million (US$0.3 million) for the first quarter of FY 21, as compared to an operating profit of RMB426.6 million for the fiscal quarter ended September 30, 2019, and an operating loss of RMB29.7 million for the previous fiscal quarter ended June 30, 2020.

For the 2021 second fiscal quarter ended December 31, 2020, the Company expects its total revenue to be between RMB2,200 million and RMB2,400 million.

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