Core Viewpoint - Pop Mart (09992) has seen a stock price increase of over 3%, currently trading at 263.4 HKD with a transaction volume of 2.791 billion HKD, indicating positive market sentiment towards the company [1] Group 1: Company Performance - Huatai Securities suggests that recent fluctuations in the secondary market prices of Pop Mart's products may be a result of the company's proactive supply increase, which does not hinder its long-term development logic [1] - As a leading player in China's trendy toy industry, Pop Mart possesses full industry chain operational capabilities for IP toys, supported by its strong IP creation and operational abilities, as well as diverse consumer reach through various channels [1] Group 2: Growth Potential - The company is expected to benefit from the gradual expansion of its overseas business and the increasing influence of its products internationally, which may open up a second growth avenue [1] - HSBC Global Research reports that Labubu has become a global cultural symbol comparable to Kaws and Bearbrick, with Labubu only beginning active collaborations with global brands in 2024, suggesting that it is premature to declare its peak [1] Group 3: Investment Ratings - HSBC maintains a "Buy" rating for Pop Mart with a target price of 379 HKD, which corresponds to forecasted price-to-earnings ratios of 41.5 times and 30.8 times for the next two years [1]

Group 1 - The Hang Seng Index (HSI) surpassed the 27,000-point mark, reaching its highest level since July 2021, indicating a strong market performance [1] - The Hang Seng China Enterprises ETF (159960) rose by 0.2%, with notable increases in constituent stocks such as Semiconductor Manufacturing International Corporation (6.06%), Baidu Group (4.43%), Meituan (3.99%), Pop Mart (3.29%), and China Life (2.29%) [1] - The Federal Reserve announced a 25 basis point reduction in the federal funds rate target range to 4.00% to 4.25%, with expectations of an additional cumulative cut of 50 basis points within the year [1] Group 2 - According to China Merchants Securities, the Hong Kong stock market is primarily driven by liquidity, with expectations for a new round of increases due to ample internal and external liquidity [1] - Factors contributing to the easing of liquidity constraints in September include the Fed's rate cut, improved funding conditions in the Hong Kong market, continuous inflow of southbound funds, and the resolution of profit concerns following interim reports [1] - The long-term outlook suggests a potential demand recovery point as the supply-demand balance improves, with expectations for a bottom reversal in corporate earnings [1] Group 3 - The Hang Seng China Enterprises Index (HSCE) tracks the performance of Chinese mainland enterprises listed in Hong Kong, with the top ten weighted stocks accounting for 55.76% of the index [2] - The top ten constituents of the HSCE include Alibaba, Tencent, Xiaomi, China Construction Bank, Meituan, China Mobile, Industrial and Commercial Bank of China, BYD, Ping An Insurance, and China National Offshore Oil Corporation [2] - Continuous attention is recommended for the Hang Seng China Enterprises ETF (159960) [2]

Summary of Pop Mart Conference Call Company Overview - **Company**: Pop Mart International Group (9992.HK) - **Industry**: Consumer Products, specifically IP collectibles Key Points and Arguments 1. **Market Sentiment**: Pop Mart's stock has dropped 24% since its peak on August 26, contrasting with a 5% increase in the Hang Seng Index (HSI) [2] 2. **Supply Increase**: The company's supply ramp-up, aimed at curbing scalping and improving product availability, is viewed negatively by the market, which is considered counter-intuitive [2] 3. **Comparison with Pokémon**: Similar to Pokémon's strategy in 2021-22, Pop Mart's supply increase is expected to broaden its customer base despite a decline in resale prices [2][10] 4. **Sustainability Concerns**: Investors question the sustainability of Pop Mart's business model, as IP collectibles may not appeal to a mainstream audience [2] 5. **Growing Market**: The IP product industry is sizeable and growing, with Pop Mart positioned to capture rising demand from "kidults" [2] 6. **Sales Indicators**: Resale prices and stock-outs have lost correlation with sales trends, complicating the assessment of Pop Mart's near-term momentum [3] 7. **Consumer Behavior**: The supply increase may lead to reduced impulse purchases but also lowers barriers for new collectors, potentially supporting future demand [4] 8. **Product Availability**: The introduction of new products and the resolution of previous supply shortages are expected to spur demand in the coming months [4] 9. **US Market Dynamics**: Concerns about weakening US demand are noted, but management expects stronger sales in the second half of the year due to planned store rollouts [11] 10. **Diverse Consumer Base**: Pop Mart's US consumer cohort includes children, unlike in China, where the primary demographic is young adults [12] Financial Metrics 1. **Stock Rating**: Overweight with a price target of HK$382.00, representing a 49% upside from the current price of HK$256.40 [6] 2. **Market Capitalization**: Approximately US$44.257 billion [6] 3. **Revenue Growth**: Projected revenue growth from Rmb 13,038 million in 2024 to Rmb 54,757 million by 2027 [6] 4. **Earnings Per Share (EPS)**: Expected EPS growth from Rmb 2.43 in 2024 to Rmb 13.68 by 2027 [6] 5. **P/E Ratio**: Current P/E is 96.6, expected to decrease to 17.1 by 2027 [6] Risks and Challenges 1. **Product Appeal**: The ability to consistently create appealing products is crucial for maintaining IP value [32] 2. **Overseas Expansion**: Any failure to meet market expectations for overseas growth could lead to high volatility in share price [33] 3. **Pricing Management**: Raising average selling prices (ASP) in the US market could risk alienating core customers [34] 4. **Counterfeit Products**: The prevalence of counterfeit products poses a risk to brand integrity and IP value [35] 5. **Traffic Conversion**: Converting strong consumer interest into sales across different IPs is a challenge [36] Market Potential 1. **IP Product Market Growth**: The IP product market is expected to grow significantly, with Pop Mart's share projected to increase from 0.1% in 2018 to 8.2% by 2027 [24] 2. **Global Expansion**: Pop Mart is positioned to become a leading global consumer brand, similar to established names like LEGO and Disney [44] Conclusion - Pop Mart is navigating a complex market landscape with significant growth potential, driven by strategic supply management and product innovation. However, it faces challenges related to market perception, product appeal, and competition from counterfeit products. The company's ability to adapt and capitalize on emerging trends will be critical for its long-term success.

Group 1 - Quantum Song reported its Q4 and full-year financial results for FY2025, with revenue from the trendy toy business reaching 65.78 million yuan, accounting for approximately 10.6% of total revenue. The company expects Q3 revenue to be between 100 million to 110 million yuan, and for FY2026, revenue is projected to be between 750 million to 800 million yuan [1] - The company has fully transformed into trendy toys and acquired Letsvan, rebranding it as "Qimeng Island," which now holds 11 proprietary IPs and 4 licensed IPs, operating over 40 blind box product lines and 30 plush card products [1] - The main IPs contributing to revenue include Wakuku, Ziyuli, and Siinono, with Wakuku generating 42.96 million yuan in Q2, and its series "Fox and Rabbit's Mischief Diary" selling over 1 million boxes since its launch in May [3][5] Group 2 - The online self-operated business launched in April 2025 achieved a GMV of over 18 million yuan by August, which is more than nine times the figure from April. The offline distribution network covers over 10,000 terminals, with plans to open at least three self-operated stores by the end of December [5] - The international distribution network is expanding to over 20 countries, including Japan and North America, with a successful pop-up test in Jakarta, Indonesia [5] - The production capacity for plush products exceeded 1 million units in August 2025, representing a growth of over 20 times since the beginning of the year [5] Group 3 - The toy industry in China has seen 16 companies report half-year revenues exceeding 100 million yuan, including prominent players like Pop Mart and Bilibili [7][8] - Bilibili's "IP derivatives and others" segment generated approximately 907 million yuan in revenue for H1 2025, with Q2 revenue around 434 million yuan [9] - TOP TOY reported a revenue of approximately 742 million yuan for H1 2025, a year-on-year increase of 73%, with an average store count increasing by about 60% [13][14] Group 4 - Aofei Entertainment's revenue for H1 2025 was approximately 1.198 billion yuan, with a net profit of about 37.01 million yuan, and toy business revenue around 459 million yuan [21][24] - Aofei is focusing on enhancing its K12 content advantages and pushing core IPs towards younger demographics, aiming to revitalize existing IPs and deepen cross-generational operations [24] - The company has partnered with major firms like Mihayou and Tencent to develop trendy toys, maintaining a focus on enhancing playability [27] Group 5 - Meili's revenue for H1 2025 was approximately 238 million HKD, a year-on-year increase of 22.5%, with a loss of about 12.24 million HKD, narrowing by 85.4% [30] - The company highlighted that 68.6% of its revenue came from the U.S. market, which has become increasingly significant [30] - The company is expanding its market presence in China while maintaining a strong focus on overseas markets [34] Group 6 - Star Shine Entertainment's toy business generated revenue of approximately 201 million yuan in H1 2025, with a net profit of about 33.01 million yuan, and a gross margin of 47.14% [36] - The company is divesting its football club business to concentrate on toys and games, planning to invest more resources into game development and AI technology applications [36] - The company has launched several new toy products, including remote-controlled cars and building blocks, with plans for further releases [36] Group 7 - Color Star Toys reported revenue of approximately 186 million HKD for H1 2025, a decrease of 58% due to the absence of major film releases for its key IPs [38] - The company anticipates further adjustments to tariff rates, which may increase operational uncertainties [40] - The company is preparing for the release of new products related to its IPs, including a sequel to "Teenage Mutant Ninja Turtles" [40] Group 8 - Huali Technology's revenue from anime IP derivative products reached approximately 166 million yuan in H1 2025, a year-on-year increase of 14.51%, although the gross margin declined from 44% to 39% [41][43] - The company is exploring strategic extensions by launching new IP operation brands and music labels to engage younger audiences [45] - The company has successfully launched new card products that have performed well in the market [43] Group 9 - Gao Le's revenue for H1 2025 was approximately 131 million yuan, a year-on-year increase of 36%, with a net loss of about 27.95 million yuan [46] - The company's toy and related business revenue was approximately 127 million yuan, reflecting a 40% increase [46] - The company has increased its focus on IP products, which saw a revenue increase of 96% [49] Group 10 - Shifeng Culture reported revenue of approximately 190 million yuan for H1 2025, a year-on-year increase of 22%, with a net profit of about 4.17 million yuan [51] - The company is diversifying its product strategy, focusing on AI smart toys and IP anime derivative toys [55][57] - The company has secured licenses for several popular IPs, including Pokémon and Super Wings, to develop new toy products [57] Group 11 - Cardao, a subsidiary of Yaoji Technology, reported revenue of approximately 105 million yuan for H1 2025, a year-on-year increase of 33%, with a net profit of about 12 million yuan [59] - The company has successfully returned to profitability after facing losses in the previous year [61]

Key Points - The top three stocks with net inflow of southbound funds are Alibaba-W (09988) with 5.278 billion, Yingfu Fund (02800) with 2.782 billion, and Hang Seng China Enterprises (02828) with 1.566 billion [1] - The top three stocks with net outflow of southbound funds are Xiaomi Group-W (01810) with -0.721 billion, Innovent Biologics (01801) with -0.466 billion, and Pop Mart (09992) with -0.458 billion [1] - In terms of net inflow ratio, Yuexiu Transportation Infrastructure (01052) leads with 63.76%, followed by Crystal International (02232) with 56.34%, and China Resources Gas (01193) with 53.63% [1] - The stocks with the highest net outflow ratio include QuanFeng Holdings (02285) at -59.36%, Yadea Group (01585) at -54.53%, and TCL Electronics (01070) at -54.28% [1] Net Inflow Rankings - The top ten stocks by net inflow include Alibaba-W (09988) with 5.278 billion, Yingfu Fund (02800) with 2.782 billion, and Hang Seng China Enterprises (02828) with 1.566 billion [2] - Other notable stocks in the net inflow list are Meituan-W (03690) with 0.670 billion and Southern Hang Seng Technology (03033) with 0.620 billion [2] Net Outflow Rankings - The top ten stocks by net outflow include Xiaomi Group-W (01810) with -0.721 billion, Innovent Biologics (01801) with -0.466 billion, and Pop Mart (09992) with -0.458 billion [2] - Other significant stocks in the net outflow list are Li Auto-W (02015) with -0.298 billion and China Construction Bank (00939) with -0.254 billion [2] Net Inflow Ratio Rankings - The top three stocks by net inflow ratio are Yuexiu Transportation Infrastructure (01052) at 63.76%, Crystal International (02232) at 56.34%, and China Resources Gas (01193) at 53.63% [3] - Additional stocks with high net inflow ratios include China Ship Leasing (03877) at 49.13% and Jiangsu Ninghu Expressway at 45.49% [3] Net Outflow Ratio Rankings - The stocks with the highest net outflow ratios include QuanFeng Holdings (02285) at -59.36%, Yadea Group (01585) at -54.53%, and TCL Electronics (01070) at -54.28% [3] - Other notable stocks with significant net outflow ratios are Kangji Medical (09997) at -53.77% and QiuTai Technology (01478) at -47.17% [3]

Market Overview - The Hang Seng Index (HSI) closed at 26,797.18, down by 111.21 points or 0.41% on September 17 [1] - The index reached a high of 26,915.65 and a low of 26,708.53 during the trading session, with a trading volume of 112 million shares [1] Major Blue-Chip Stocks Performance - HSBC Holdings closed at HKD 108.373, up by 1.66% compared to the Hong Kong close [2] - Tencent Holdings closed at HKD 661.407, down by 0.01% compared to the Hong Kong close [2] Stock Price Movements - Tencent Holdings (00700) saw an increase of HKD 16.500, or 2.56%, with an ADR price of HKD 661.407, showing a slight decline of HKD 0.093 compared to the Hong Kong market [3] - Alibaba Group (09988) increased by HKD 8.100, or 5.28%, with an ADR price of HKD 161.550, down by HKD 0.050 [3] - Other notable movements include: - Meituan (03690) up by HKD 4.900, or 4.89% [3] - Baidu Group (09888) up by HKD 17.800, or 15.72% [3] - Kuaishou (01024) up by HKD 2.650, or 3.51% [3]

Core Insights - The article highlights the launch of the first gold series product by Popop, a jewelry brand under Pop Mart, featuring the IP Baby Molly [1] - The product line includes gold beads, pendants, gold bars, and ornaments, aimed at appealing to consumers looking for unique gifts [1] Sales Performance - Within just three days of the launch, Popop's two offline stores experienced a significant increase in customer traffic, leading to a noticeable rise in store sales [1] - Consumers expressed enthusiasm for the Baby Molly design, with one mentioning the product's suitability for gifting occasions such as a baby's full moon celebration [1] Consumer Sentiment - New mothers are particularly drawn to the Baby Molly series, as they find a personal connection with the character, enhancing the product's appeal [1] - The IP association adds charm to the products, making them more attractive to potential buyers [1]

Summary of the Conference Call on Pop Mart Company Overview - **Company**: Pop Mart - **Industry**: IP-driven consumer products, specifically in the collectible toy market Key Points and Arguments Market Trends and Performance - Pop Mart's leading IPs, such as Labubu, have seen significant engagement on social media platforms like Xiaohongshu and Douyin, with browsing volume increasing by 170% and discussion volume by 204% from June to September 2025 [1][5] - The conversion of social media engagement into actual revenue requires strong product design, supply chain management, and effective distribution channels [1][4] Product Design and Consumer Engagement - Product design is crucial for attracting diverse consumer groups; for instance, the Labubu Sanxingdui series successfully attracted male users, enhancing IP recognition and conversion rates [1][7] - Pop Mart continuously launches new product series, including vinyl plush and blind box collections, to maintain market interest, although design controversies (e.g., Minie Labubu) can negatively impact conversion rates [1][11] Supply Chain and Pricing Dynamics - The pricing of Pop Mart products in the secondary market is closely tied to supply and demand; limited editions command higher premiums, while regular items do not show significant price appreciation [1][12] - A persistent higher price in the secondary market compared to the primary market may indicate supply chain management issues, as dealers profiting from price differences can erode consumer purchasing power [1][12] Production Capacity and Future Projections - Pop Mart's production capacity is rapidly expanding, from 400,000 plush products in early 2024 to an expected 50 million by December 2025, aimed at meeting market demand while avoiding inventory buildup [1][19] - The company anticipates a 40% growth rate in 2026, followed by 30% and 20% in the subsequent years, averaging around 30% growth over three years [3][37] Financial Performance and Valuation - Pop Mart's market capitalization and stock price have recently declined by approximately 25%, which is significantly more than expected. The current valuation is projected at 19 times earnings for the next year, suggesting a potential upside of over 50% based on future growth rates [2][38] - The expected total revenue for 2025 is projected to reach between 35 billion to 36 billion yuan, with profits exceeding 12 billion yuan based on a 35% profit margin [35] Competitive Advantages - Pop Mart's full industry chain capabilities, from IP ownership to production and distribution, differentiate it from traditional toy companies, allowing for better supply chain management and market responsiveness [21][39] - The company employs a D to C (direct-to-consumer) model, enhancing profit margins and competitive positioning in the market [23] Social Media and Marketing Strategy - Pop Mart effectively utilizes social media for marketing, aligning product design with current social media trends to maximize engagement and reduce marketing costs [32] Future Growth Potential - The company sees significant growth potential in overseas markets, particularly in the U.S., where it has a limited presence compared to competitors like LEGO [36] - The management anticipates that the total market size could reach 170-180 billion yuan, with substantial room for expansion in both domestic and international markets [34] Additional Important Insights - The secondary market for Pop Mart products reflects consumer sentiment and can indicate potential issues in supply chain management [12] - The company’s ability to adapt product designs to meet the aesthetic preferences of different consumer demographics is critical for maintaining IP relevance and sales [7][11] - Pop Mart's future strategies may include expanding into broader consumer categories, such as accessories and apparel, leveraging its strong IP foundation [23]

Summary of Conference Call Records Industry Overview - The service consumption in China is significantly lower than in developed countries, currently at approximately 30% compared to 70% in the US, indicating substantial growth potential [1][2] - The new policies aim to enhance service consumption, particularly in the cultural and tourism sectors, with local governments actively improving service quality [1][2] Key Policy Insights - Five major increments in the new policy include: 1. Optimizing student holiday arrangements to explore spring and autumn breaks, benefiting tourism [1][4] 2. Encouraging IP collaborations to promote cross-industry partnerships [1][4] 3. Linking sports events with cultural tourism to boost consumer engagement [1][4] 4. Promoting AI applications in various sectors such as e-commerce and education [1][4] 5. Regulating non-academic training institutions to encourage market-oriented vocational training [1][4] Impact on Specific Sectors - **Tourism and Hospitality**: - The expansion of the visa-free entry policy is expected to significantly boost inbound tourism, particularly benefiting major cities like Beijing and Shanghai, as well as OTA platforms and hotels [3][9][12] - **Cultural and Sports Events**: - The policy encourages the introduction of international sports events and supports local sports activities, which will benefit event organizers and related industries, enhancing investor expectations [1][6] - **Education and Training**: - The new regulations for non-academic training institutions will favor companies like New Oriental and others in the vocational training sector [7][8] Financial and Economic Support - The government plans to utilize central budget investments and local special bonds to support cultural tourism and elderly care facilities, which will attract social capital investment [13] - Financial tools will be employed to increase credit availability, directly benefiting companies involved in consumer lending, such as Chongqing Department Store [13] Additional Considerations - The adjustment of student holiday schedules is anticipated to increase tourism frequency while alleviating congestion during peak seasons [11][12] - The integration of AI in service sectors is expected to enhance operational efficiency and reduce costs, indicating a significant trend in future consumption development [10]

Investment Rating - The investment rating for the company is "Buy" (maintained) [5] Core Views - Short-term fluctuations in second-hand prices are due to supply adjustments and do not hinder long-term performance growth [5] - The company's strong IP incubation and operation capabilities remain a core competitive advantage, with future performance growth likely to be catalyzed by these strengths [8] - The company is positioned as a leading player in the Chinese trendy toy industry, with robust IP toy full industry chain operation capabilities, and is expected to achieve significant profit growth in the coming years [8] Financial Performance Summary - Revenue projections for 2023 to 2027 show substantial growth, with expected revenues of RMB 6,301 million in 2023, increasing to RMB 60,001 million by 2027, reflecting a compound annual growth rate (CAGR) of 106.92% from 2023 to 2024 and 17.69% from 2026 to 2027 [7][9] - Net profit attributable to the parent company is forecasted to grow from RMB 1,082.34 million in 2023 to RMB 22,009.50 million in 2027, with a remarkable growth rate of 279.10% in 2025 [7][9] - Earnings per share (EPS) are projected to rise from RMB 0.81 in 2023 to RMB 16.39 in 2027, indicating strong profitability growth [7][9] Recent Events - Recent fluctuations in the second-hand market prices for the company's IP products, particularly the Labubu series, are attributed to supply adjustments, which are seen as a normal market response [8] - The company has expanded its global presence, with a total of 571 stores and 2,597 robot stores worldwide as of mid-2025, indicating a strong channel expansion strategy [8]