UBS reduced MINISO's target price to $14 from $19.84 and kept a Buy rating, according to ETNet.

The bank noted MINISO delivered 17% year-on-year revenue growth to RMB 5.81 billion in the second quarter, while adjusted net profit declined 10% to RMB 588 million, in line with the company’s profit warning. Revenue by segment rose 23% in China, 9% overseas, and 17% from TOP TOY.

UBS said overseas growth cooled as distributor sales fell, led by Asia-Pacific and Latin America markets. The higher-margin distributor model contributed less revenue, which helped push the second-quarter adjusted operating margin down by about three percentage points year over year.

Valuation-wise, the stock trades at eight times forecast 2026 adjusted net profit and seven times forecast 2027 adjusted net profit, a level UBS says largely reflects ongoing pressure from overseas distributor channel restructuring. Management expects further distributor store closures and margin pressure in the near term, but notes that downside risks appear priced in. Domestic operations remain resilient and should support earnings via store upgrades and productivity gains.

UBS added that management has slowed store expansion, which should ease operating expense pressure and bolster profitability. It projects overseas business to account for more than 40% of group profit in 2025, declining to below 30% in its 2026 forecast.