MINISO Group Holding Limited (09896, MNSO.US), a company listed on both the Hong Kong and US stock exchanges, encountered a significant setback at the beginning of 2026. According to public records, on January 14, its core domestic entity, MINISO (Guangzhou) Co., Ltd., was designated as a person subject to enforcement by the Yuexiu District People's Court in Guangzhou, with an enforcement amount of 4.9688 million yuan. While this enforcement case may appear minor, it reveals associated risks linked to MINISO's actual controller. Public data indicates that Guangzhou Mingyou Business Development Co., Ltd., involved in the case, has been labeled a dishonest被执行人. Notably, Zhuhai Siyi Enterprise Management Co., Ltd., controlled by MINISO's actual controller Ye Guofu, holds a 30% stake in the失信 company, illustrating how troubles in one entity can affect related parties.
More critically, this enforcement incident may not be an isolated case but rather a reflection of MINISO's operational difficulties since 2025. An analysis of its 2024 annual report and subsequent quarterly reports reveals that the retail giant, once known for rapid expansion under the "affordable quality" banner, is now grappling with multiple challenges following its acquisition of Yonghui Superstores. These include declining performance, high liabilities, tight cash flow, and inventory accumulation, indicating deteriorating financial health and rising operational risks.
1. Revenue Growth Masks Consecutive Profit Declines, Soaring Expenses Erode Profitability Superficially, MINISO's revenue maintained double-digit growth in 2025, suggesting continued expansion. However, the quality of this growth is low, as evidenced by consecutive sharp declines in net profit attributable to shareholders, exposing severe weakening profitability. Financial reports show that in the first three quarters of 2025, adjusted net profits attributable to shareholders were 416 million yuan, 906 million yuan, and 1.347 billion yuan, respectively, representing year-on-year declines of 28.52%, 22.57%, and 25.68%. This marks three consecutive quarters of double-digit decreases, with the decline rates consistently exceeding revenue growth rates. Particularly concerning is the third-quarter performance, where single-quarter net profit fell over 30% year-on-year to 441 million yuan, indicating expanding declines and sustained pressure on profitability.
The core issue lies in the rapid growth of selling, general, and administrative expenses (SG&A), which severely erode profits. Selling expenses saw the most significant surge, reaching 1.021 billion yuan, 2.181 billion yuan, and 3.611 billion yuan in the first three quarters of 2025, with year-on-year increases of 46.72%, 43.29%, and 43.37%, respectively—far outpacing revenue growth. This surge is primarily attributed to large-scale investments in overseas directly operated stores, especially expansions in strategic markets like the US, leading to substantial increases in rent, labor, and logistics costs. In the third quarter alone, promotion and advertising expenses, licensing fees, and logistics costs rose by 43.3%, 20.8%, and 23.3% year-on-year, respectively.
General and administrative expenses also grew noticeably, increasing by 26.55%, 20.33%, and 29.43% year-on-year in the first three quarters, driven by rising personnel costs from business expansion and higher operational expenses due to intensified domestic competition. Most alarming is the spike in financial expenses, which surged by 296.27%, 477.52%, and 656.57% year-on-year in the first three quarters, reaching 233 million yuan by the end of the third quarter—a more than sixfold increase from the previous year, becoming another major driver of profit decline.
MINISO's profitability challenges were evident as early as 2024. While revenue grew 22.8% year-on-year to 16.994 billion yuan and net profit remained positive, key profitability indicators showed signs of weakening, with the adjusted net profit margin dropping from 17.0% in 2023 to 16.0%. In 2025, the contrast between sluggish revenue growth and rigid expense increases worsened the "revenue growth without profit growth" dilemma, highlighting declining operational efficiency and a fragile profit model.
2. Short and Long-Term Debt Surge, Asset-Liability Ratio Exceeds 60%, Cash Reserves Shrink Amid persistent profit declines, MINISO's debt has grown explosively, with the asset-liability ratio soaring,偿债 pressure intensifying, and financial risks approaching warning levels. The surge in short-term debt is particularly striking. At the end of 2024, short-term borrowings stood at 567 million yuan. By the first quarter of 2025, they rose to 649 million yuan, surged to 1.707 billion yuan by the second quarter, and further increased to 1.886 billion yuan by the third quarter, indicating exponential growth in short-term偿债 pressure and straining the company's funding chain.
Long-term debt growth is equally startling. Long-term borrowings were a negligible 4.31 million yuan at the end of 2024 but skyrocketed to 5.622 billion yuan by the third quarter of 2025. This surge stems from funding needs for overseas expansion and business acquisitions (such as Yonghui Superstores' assets) and reflects insufficient operational cash flow to support growth, necessitating reliance on long-term borrowing to fill funding gaps. The acquisition of Yonghui significantly increased total assets in the first half of 2025 but also elevated liability levels.
The dual surge in debt directly drove the asset-liability ratio upward. At the end of 2024, the ratio was 42.85%, within a reasonable range. By the second quarter of 2025, it rose to 59.1%, reaching 62% by the third quarter—a nearly 19-percentage-point increase in nine months. Excessive financial leverage may reduce risk resilience, exposing the company to偿债 risks if market conditions deteriorate or financing channels tighten.
In stark contrast to the debt surge, MINISO's cash reserves have shrunk significantly, with operational cash flow declining sharply. Cash and cash equivalents dropped from 6.328 billion yuan at the end of 2024 to 3.1 billion yuan by the third quarter of 2025—a 56.4% decrease from the second quarter and a 51% drop from year-end 2024, effectively halving in months. This decline reflects deteriorating operational cash flow. In 2024, net cash flow from operations was 2.168 billion yuan, roughly matching net profit. However, in the first half of 2025, it fell to 1.014 billion yuan, down 21.61% year-on-year, and by the third quarter, the decline widened to 36%, reaching only 1.3 billion yuan. This deterioration stems from capital tied up in inventory accumulation and reduced cash collection from sluggish revenue growth, indicating weakening core business profitability and cash generation.
3. Inventory Hits Record High, Mounting Pressure to Clear Stock Reflects Sales Struggles Alongside profit declines, high debt, and cash flow constraints, MINISO's inventory has continued climbing to a record high, potentially further dragging on operational performance and cash flow. Inventory stood at 2.75 billion yuan at the end of 2024, rose slightly to 2.833 billion yuan by the first quarter of 2025, increased to 2.836 billion yuan in the second quarter, and surged to 3.288 billion yuan by the third quarter—up 20.07% from end-2024 and 43.13% year-on-year, hitting an all-time high. As of the third quarter, inventory accounted for 23.89% of total current assets and 11.47% of total assets, tying up substantial funds and exacerbating cash flow tightness.
High inventory not only occupies capital but also poses impairment risks, threatening profit margins. The buildup reflects product滞销 and declining inventory turnover efficiency. In 2024, inventory turnover days for domestic stores increased by 5 days to 75 days, while overseas stores reached 187 days—up 56 days year-on-year. The sharp rise overseas stems from challenges in logistics and supply chain management under the direct-operated model, leading to prominent滞销 issues. Domestically, competition from brands like KKV and Green Party has分流 market share, weakening end-demand and causing product accumulation.
Notably, MINISO's extensive IP strategy has not effectively alleviated滞销. Despite partnerships with over 150 global IPs (e.g., Disney, Harry Potter), with IP products comprising over 40% of overseas sales, some IP derivatives (such as Harry Potter items) have underperformed, contributing significantly to excess inventory. Meanwhile, its潮玩 brand TOP TOY, while achieving revenue growth and initial profitability, offers limited contribution to overall profit and inventory turnover, failing to ease high inventory pressure.
From the近5 million yuan enforcement against its domestic entity to three consecutive quarters of profit declines; from surging short and long-term debt with an asset-liability ratio breaching警戒线 to halved cash reserves and deteriorating operational cash flow; from record-high inventory to product滞销 and mounting clearance pressure—MINISO faces unprecedented operational challenges.