Core Viewpoint - The article discusses the rise of the "emotional economy," highlighting how consumers are increasingly willing to spend on seemingly useless items that fulfill emotional needs, such as collectibles and novelty products [8][30][58]. Group 1: Market Trends - The launch of the mini Labubu figure by Pop Mart sold out in under five minutes, with resale prices skyrocketing to 300 yuan per piece, indicating a strong demand for collectible toys [4][9]. - Collaborations, such as the Hello Kitty digital camera bucket by KFC, also saw immediate sellouts and significant price increases on secondary markets, reflecting a trend in emotional-driven purchases [6][8]. - The emotional economy is characterized by consumers purchasing items that may not have practical utility but provide emotional satisfaction, as seen in the popularity of various novelty items and collectibles [8][30]. Group 2: Consumer Behavior - Young consumers are increasingly drawn to products that evoke nostalgia or emotional connections, leading to a surge in demand for toys and collectibles [18][68]. - The phenomenon of "emotional spending" is evident in various sectors, including food and beverage, where establishments are enhancing customer experiences to stimulate emotional responses [28][30]. - The emotional economy is not limited to physical products; virtual services and experiences, such as AI companionship and emotional support services, are also gaining traction among consumers [54][58]. Group 3: Economic Impact - The emotional economy in China is projected to reach a market size of 23,077.67 billion yuan in 2024, with expectations to exceed 45,000 billion yuan by 2029, indicating significant growth potential [58]. - Interest-driven consumption among young people accounts for nearly 30% of their spending, with key categories including pets, trendy toys, gaming, and travel [32][34]. - The rise of emotional spending is occurring against a backdrop of declining marriage and birth rates, with pet-related spending seeing substantial growth, such as an 800% increase in cat food sales during last year's Double 11 shopping festival [34][37].

Core Insights - The launch of the "Starry People Delicious Moments" plush series at a price of 59 yuan marks the lowest price in the brand's history for plush products, responding to consumer complaints about previous high prices [1] - The price adjustment has sparked significant consumer interest, with over 100,000 views on the product preview within an hour and 13,000 reservations for the live stream, indicating a revitalization of the sluggish blind box market [1] Pricing Strategy - The recent price cuts are seen as a direct response to consumer demands, contrasting with previous price increases where the blind box price rose from 59 yuan to 69 yuan in 2021, and the overseas Labubu series saw a nearly 30% increase to 27.99 USD [3] - The official rationale for price increases has been attributed to rising raw material costs and upgraded craftsmanship, although analysis suggests that raw material costs account for only about 20% of the pricing, indicating a market premium testing [3] Market Response - The release of the SKULLPANDA "Sleepless Theater" plush at 159 yuan saw a drastic drop in consumer interest, with queue numbers falling to fewer than 10, contrasting sharply with previous high-demand scenarios [6] - The rapid decline in sales from 93,000 to below 1,000 within 44 minutes highlights a shift towards more rational consumer behavior [6] Consumer Behavior Insights - There is a clear divide in consumer sentiment, with fans responding positively to low-priced plush items while showing resistance to high-priced gold items, indicating a threshold for emotional premium tolerance [7] - The average decision-making time for blind box purchases is only 17 seconds, while gold purchases require a 14-day comparison period, emphasizing the different consumer motivations [9] Strategic Pricing Model - The company is restructuring its pricing strategy into two parallel paths: attracting new users with low-priced items while guiding them towards higher-priced derivatives through brand loyalty [10] - The successful pre-order volume for the 59 yuan plush validates the strategy of using basic products to maintain traffic while leveraging limited editions to build brand prestige [10] - The strategy includes targeting high-net-worth users with luxury items like gold and limited sculptures while expanding the user base with entry-level products priced at 59 yuan [10]

Group 1 - Northbound capital recorded a net purchase of 9.838 billion HKD on September 19, with 5.283 billion HKD from the Shanghai Stock Connect and 4.555 billion HKD from the Shenzhen Stock Connect [2] - The most net bought stocks included Shankai Holdings (00412), Alibaba-W (09988), and the Tracker Fund of Hong Kong (02800) [2] - The most net sold stocks were Tencent (00700), Xiaomi Group-W (01810), and Longi Green Energy (06869) [2] Group 2 - Alibaba-W had a net inflow of 4.73 billion HKD, with a buy amount of 37.49 billion HKD and a sell amount of 32.76 billion HKD [3] - Semiconductor stocks, including SMIC (00981) and Huahong Semiconductor (01347), saw net purchases of 3.08 billion HKD and 2.37 billion HKD respectively, driven by optimistic market sentiment [7] - Longi Green Energy (06869) experienced a net outflow of 690.83 million HKD, indicating market concerns regarding its performance [3][8] Group 3 - Shankai Holdings (00412) received a net purchase of 22.4 billion HKD, attributed to its compliance with public shareholding regulations [6] - The report highlighted that Alibaba's new AI chip development has surpassed Nvidia's A800, contributing to its positive market outlook [6] - Longi Green Energy's recent announcement indicated that its products related to data centers, particularly hollow-core fibers, are still in early stages of market adoption [8]

Core Insights - The Hang Seng Index closed flat on September 19, with southbound trading totaling HKD 153.72 billion, comprising HKD 81.78 billion in buying and HKD 71.94 billion in selling, resulting in a net inflow of HKD 9.84 billion [1] Trading Activity - Southbound trading through the Stock Connect (Shenzhen) recorded a total of HKD 55.47 billion, with buying at HKD 30.01 billion and selling at HKD 25.46 billion, leading to a net inflow of HKD 4.55 billion [1] - Southbound trading through the Stock Connect (Shanghai) saw a total of HKD 98.25 billion, with buying at HKD 51.76 billion and selling at HKD 46.48 billion, resulting in a net inflow of HKD 5.28 billion [1] Active Stocks - Alibaba-W was the most actively traded stock with a total transaction amount of HKD 115.81 billion and a net inflow of HKD 17.27 billion [1] - Other notable stocks included SMIC with a transaction amount of HKD 96.75 billion and a net inflow of HKD 9.30 million, and Sany Heavy Industry with a transaction amount of HKD 52.90 billion and a net inflow of HKD 22.40 billion [1][2] Continuous Net Buying - Alibaba-W and Meituan-W were among the stocks with the longest streak of net buying, with Alibaba-W seeing a total net inflow of HKD 57.83 billion over 21 consecutive days, while Meituan-W had a net inflow of HKD 5.75 billion over 5 days [2]

Investment Rating - The investment rating for the company is "Buy" based on the strong performance and growth potential observed in the report [1]. Core Insights - The company is expected to continue its strong operational trends in Q4 with new store openings, seasonal demand, and product launches, indicating sustained growth momentum [2]. - The overseas expansion is accelerating, with a target of 200 stores by the end of the year, reflecting a significant increase from 140 stores reported mid-year [2]. - The company's IP ecosystem and supply chain optimization are strengthening its competitive barriers, with successful performance from key IPs and new product launches expected to drive sales [2]. - The financial forecasts indicate substantial growth in revenue and net profit over the next few years, with projected net profits of 112.8 billion, 166.2 billion, and 200.3 billion for 2025, 2026, and 2027 respectively [3][4]. Financial Summary - Revenue is projected to grow from 13.038 billion in 2024 to 59.496 billion in 2027, reflecting a compound annual growth rate (CAGR) of approximately 106.92% to 15.21% [3][4]. - The net profit is expected to increase significantly from 3.125 billion in 2024 to 20.032 billion in 2027, with growth rates of 189% and 21% in the respective years [3][4]. - Earnings per share (EPS) are forecasted to rise from 2.36 in 2024 to 14.92 in 2027, indicating strong profitability growth [3][4]. Key Financial Ratios - The company is expected to maintain a healthy return on equity (ROE) of 29.26% in 2024, increasing to 32.59% by 2027 [5]. - The debt-to-equity ratio is projected to decrease from 26.80% in 2024 to 19.27% in 2027, indicating improved financial stability [5]. - The current ratio is expected to improve from 3.63 in 2024 to 5.29 in 2027, reflecting strong liquidity [5].

Core Insights - On September 19, 2025, Alibaba-W (09988), SMIC (00981), and Shankai Holdings (00412) were the top three companies by trading volume in the Southbound Stock Connect, with trading amounts of 70.25 billion, 62.79 billion, and 38.99 billion respectively [1] - In the Southbound Stock Connect for the Shenzhen-Hong Kong Stock Connect, Alibaba-W (09988), SMIC (00981), and Tencent Holdings (00700) also ranked as the top three, with trading amounts of 45.57 billion, 33.96 billion, and 15.89 billion respectively [1] Southbound Stock Connect (Hong Kong-Shanghai) - The top three active companies by trading volume were: - Alibaba-W (09988): 70.25 billion with a net buy of +4.73 billion - SMIC (00981): 62.79 billion with a net buy of +3.08 billion - Shankai Holdings (00412): 38.99 billion with a net buy of +17.21 billion [2] - Other notable companies included: - Changfei Optical Fiber (06869): 24.82 billion with a net sell of -69.08 million - Pop Mart (09992): 24.49 billion with a net buy of +9.01 billion [2] Southbound Stock Connect (Shenzhen-Hong Kong) - The top three active companies by trading volume were: - Alibaba-W (09988): 45.57 billion with a net buy of +12.54 billion - SMIC (00981): 33.96 billion with a net sell of -2.15 billion - Tencent Holdings (00700): 15.89 billion with a net buy of +27.91 million [2] - Other notable companies included: - Xiaomi Group-W (01810): 15.49 billion with a net sell of -43.27 million - Innovent Biologics (01801): 15.23 billion with a net sell of -37.09 million [2]

Core Insights - The Hong Kong stock market saw a net inflow of 98.38 billion HKD from Northbound trading on September 19, with the Shanghai Stock Connect contributing 52.83 billion HKD and the Shenzhen Stock Connect contributing 45.55 billion HKD [1] Group 1: Stock Performance - The most bought stocks included Shankai Holdings (00412), Alibaba-W (09988), and the Tracker Fund of Hong Kong (02800) [1] - The most sold stocks included Tencent (00700), Xiaomi Group-W (01810), and Yangtze Optical Fibre and Cable (06869) [1] Group 2: Individual Stock Details - Alibaba-W (09988) recorded a net inflow of 17.26 billion HKD, driven by positive news regarding its AI chip development [5] - Shankai Holdings (00412) received a net inflow of 22.4 billion HKD, with a focus on its public shareholding compliance [4] - Bubble Mart (09992) saw a net inflow of 9.01 billion HKD, with analysts suggesting that recent price adjustments do not indicate a decline in IP popularity [5] - Semiconductor stocks like Huahong Semiconductor (01347) and SMIC (00981) received net inflows of 2.37 billion HKD and 930.1 million HKD respectively, amid optimistic market outlooks [5] Group 3: Market Trends - The semiconductor sector is experiencing a rapid increase in interest, with companies like TSMC and SMIC providing positive forecasts [5] - The demand for AI-related products is expected to drive significant revenue growth for companies involved in AI server production, such as Hongteng Precision (06088) [6]

Group 1: Market Overview - In 2025, China's consumer market is experiencing a divergence, with traditional consumer goods showing weak growth while "emotional consumption" characterized by emotional connection, cultural identity, and immersive experiences is booming [1][4] - In the first half of 2025, the total retail sales of consumer goods reached 24,545.8 billion yuan, with a year-on-year growth of only 5.0% [1] - The retail sales of goods amounted to 21,797.8 billion yuan, growing by 5.1% [1] Group 2: Company Performance - Moutai, a representative of traditional high-end consumption, reported a revenue of 91.094 billion yuan in the first half of 2025, with a year-on-year growth of 9.16%, marking the first time in nearly a decade that its growth rate fell to single digits [1] - Pop Mart achieved a revenue of 13.88 billion yuan in the first half of 2025, with a remarkable year-on-year growth of 204.4% and an adjusted net profit of 4.71 billion yuan, up 362.8% [1] - Miniso's second-quarter revenue reached 4.97 billion yuan, growing by 23.1% year-on-year, while its subsidiary TOP TOY saw a revenue increase of 87.0% [2] Group 3: Consumer Trends - The rise of emotional consumption reflects a deep-seated desire for emotional comfort and cultural identity among consumers [4][5] - Consumers are shifting their spending from traditional goods to emotional products, indicating a change in consumption logic from "need" to "liking" and from "utility" to "emotion" [4][5] - The emotional consumption trend is not just limited to toys and jewelry but is also evident in various sectors, including tea beverages and snacks [18][20][23] Group 4: Emotional Consumption Dynamics - Emotional consumption is characterized by consumers being willing to pay for emotional experiences, social attributes, and identity recognition rather than just the products themselves [18] - The success of brands like Pop Mart and Lao Pu Gold illustrates the shift from functional attributes to emphasizing the emotional and cultural aspects of products [11][12] - The average overlap rate of Lao Pu Gold consumers with luxury brands like Louis Vuitton and Cartier is as high as 77.3%, indicating its entry into the high-end market [13] Group 5: Future Implications - The rise of emotional consumption is reshaping the entire consumption landscape, prompting brands to reassess their value creation strategies [25] - Companies that can accurately capture emotional needs and provide meaningful experiences are likely to thrive in this new consumption era [25]

Core Viewpoint - Citi's report indicates that the recent stock price correction of Pop Mart (9992.HK) is primarily due to market concerns over the declining resale prices of LABUBU, but does not reflect a decrease in IP popularity [1] Group 1: Market Concerns - The decline in LABUBU resale prices has raised concerns in the market [1] - Citi does not view this as a sign of diminishing IP heat [1] Group 2: Strategic Initiatives - The company is taking measures to replenish stock based on real demand, which is expected to enhance IP competitiveness in the long run [1] - Improvements in customer experience and efforts to curb resale activities are part of the company's strategy [1] Group 3: Investment Recommendation - Investors are encouraged to focus on sales trends, particularly the ongoing rapid sell-out phenomenon in the company's own channels [1] - Citi reaffirms a "Buy" rating and maintains a target price of HKD 398 [1]

Core Viewpoint - The recent decline in Pop Mart's stock price, which has dropped nearly 25% from its peak on August 26, is primarily driven by market concerns over the second-hand prices of certain popular products and the sustainability of their popularity. However, the company believes that second-hand prices are not a reasonable indicator of popularity, as the current price adjustments are mainly driven by supply expansion rather than changes in demand [1][2]. Group 1: Supply and Demand Dynamics - The fluctuation in the second-hand prices of Labubu is attributed to increased supply rather than a decline in popularity, as evidenced by stable or increasing prices for products not affected by capacity changes [2]. - The company maintains a leading position in the artist IP toy market, with exclusive brand positioning and control over supply, which allows for a highly expandable product lifecycle [2]. - The balance of supply and demand is crucial for enhancing fan experience and mitigating the impact of counterfeit products [2]. Group 2: Product Innovation and Pricing Strategy - Recent product launches, such as Mini Labubu, have generated significant fan engagement and strong sales performance in North America, showcasing the company's ability to blend product and social play [3]. - The company has demonstrated flexibility in pricing strategies, as seen with the price increase of SP plush toys to 159 yuan, indicating strong pricing power in the rubber plush category [3]. - Upcoming quarterly results are anticipated to be positive, driven by pre-sale shipments and new product launches, with Q4 expected to benefit from the overseas peak season and anniversary series [3]. Group 3: Long-term Growth Drivers - The company is expected to see substantial growth in 2026, driven by rapid capacity expansion in plush products and a low base in the first three quarters [4]. - The global commercial value of the company's largest IP, The Monsters, has significant growth potential, with the top five IPs showing strong momentum [4]. - The company plans to expand its overseas store count to over 180 by 2025, enhancing brand influence through flagship store openings [4]. Group 4: Financial Forecast and Valuation - The company has raised its adjusted net profit forecasts for 2025-2027 by 14%/12%/12% to 116 billion, 170 billion, and 220 billion yuan, respectively, driven by capacity expansion and product upgrades [4]. - The target price has been increased by 14% to 396 HKD, maintaining a "buy" rating based on the company's high growth potential and expanding global IP influence [4].