Morningstar: Xunxiao's profits will benefit from the recovery of Uniqlo's business in Greater China.

The stronger recovery of UNIQLO's business in the Greater China region has prompted Morningstar analyst Tan Qixiong to raise her forecast for pre-tax profits from 2026 to 2030 by 2%-3%. She pointed out that with the strong performance in the first quarter of the 2026 fiscal year and the support of the independent store management strategy, the business segment has rebounded, and this strategy is expected to continue boosting profits. However, Tan Qixiong added that the pre-tax profit forecast for 2026 is still below the company's performance expectations. Morningstar has raised its fair value estimate by 5% to 54,500 yen, but believes that the stock is overvalued because the market seems overly optimistic about UNIQLO's growth in Japan and recovery in China. The stock closed at 63,820 yen.