The IPO market has been booming in the U.S. in 2020. September was the busiest month ever for the U.S. IPO market. Cumulatively, 159 companies went public in the third quarter compared to 62 in the third quarter of 2019. Also, despite souring relations between the U.S. and China, more Chinese companies are raising money from U.S. markets. MINISO is the latest Chinese company that plans to list in the U.S. When is the MINISO IPO date and is it a good investment?
What is Miniso Group?
According to the company, “MINISO is a Japanese-inspired lifestyle product retailer, offering high quality household goods, cosmetics and food at affordable prices.” The company was founded by Ye Guofu in 2013. The inspiration for MINISO came during a family vacation in Japan the same year. The company is headquartered in Guangzhou, China.
MINISO has grown multi fold since its inception in 2013. As of June 30, 2020, it had 4,200 stores globally. Among the stores, 2,500 are in China, while the other stores are spread across 80 different countries including the U.S., Canada, Spain, and India. The company offers lifestyle products to value and quality conscious buyers.
When is MINISO going public?
MINISO hasn’t disclosed the date for its ADS (American depositary share). The company plans to issue 30.4 million ADS. Each ADS represents four of the company’s Class A shares. MINISO reported revenues of $1.27 billion in the financial year ended June 30, 2020 — down 8 percent from the previous fiscal year. The company posted a net loss of $36.8 million in fiscal 2020 — down from the $43.3 million loss in the previous year. However, MINISO's operating cash flows narrowed from $152.7 million to $116.9 million between fiscal 2019 and fiscal 2020.
What is the MINISO stock IPO price?
MINISO intends to raise up to $562.4 million from the ADS issue. The company has kept the IPO pricing between $16.5 and $18.5. At the upper end of the IPO range, MINISO would be valued at $5.71 billion.
There has been a surge in Chinese companies looking to raise capital from U.S. markets in 2020. There has also been rhetoric about delisting Chinese companies from U.S. stock markets as well as the negative perception of Chinese companies after the Luckin Coffee accounting scandal. According to Dealogic, Chinese companies have raised $9 billion from U.S. markets this year compared to $3.5 billion in 2019. Alibaba-backed Ant Financial decided against a U.S. listing and listed in Hong Kong amid the tensions between the U.S. and China.
Overall, 2020 is turning out to be a blockbuster year for IPOs. So far, companies have raised over $100 billion in IPOs, which is above $62.5 billion raised in 2019, according to Dealogic. This year is expected to be the largest year for U.S. IPOs since 2000. Many analysts have been skeptical about the IPO surge. They see a bubble building, especially given the euphoria towards tech IPOs.
What is MINISO's ticker symbol?
MINISO Group Holdings would list under the ticker symbol “MNSO.” Bank of America Securities and Goldman Sachs are the underwriters for the issue. The company is seeking an EV-to-revenue multiple of 3.91x, which looks on the higher side. MINISO works mainly on the franchise model and only 129 of its stores are operated directly. The company gets 90 percent of its revenues from in house brands MINISO and Wonderlife.