Investment Rating - The report maintains an "OUTPERFORM" rating for Pop Mart International [1] Core Views - The company's performance in the first half of 2025 exceeded expectations, with revenue projected to grow by no less than 200% year-on-year, and net profit expected to increase by no less than 350% [12] - The growth is attributed to the global recognition of Pop Mart's IP, diversified product categories driving revenue growth across regions, and improved cost management enhancing profitability [2] Financial Summary - Revenue projections for 2025-2027 are RMB 35.1 billion, RMB 53.5 billion, and RMB 69.1 billion, representing year-on-year growth of 169%, 53%, and 29% respectively [5] - Adjusted net profit estimates for the same period are RMB 11.2 billion, RMB 17.8 billion, and RMB 23.8 billion, with corresponding growth rates of 229%, 58%, and 34% [5] - The gross profit margin is expected to improve from 66.8% in 2024 to 74.9% by 2027 [11] Market Position and Strategy - The company has successfully expanded its IP portfolio, with new IPs like CRYBABY gaining traction, indicating a reduced reliance on a few key IPs [4] - The overseas business is growing rapidly, particularly in the U.S., where price increases are expected to enhance regional gross margins [4] - The launch of new product lines, including the independent accessory brand POPOP, aims to broaden the customer base and explore IP value [3]

Group 1 - The third China International Supply Chain Promotion Expo will be held in Beijing until July 20 [2] - The 12th Aviation Power and Gas Turbine Focus Conference will take place in Shanghai from July 16 to 18 [2] - The 2025 China International Nuclear Fusion and Nuclear Energy Expo is scheduled for July 16 to 18 in Shanghai [2] Group 2 - The U.S. Consumer Price Index (CPI) increased by 0.3% month-on-month in June, with a year-on-year increase of 2.7% [3] - The core CPI, excluding food and energy, rose by 0.2% month-on-month and 2.9% year-on-year [3] - U.S. stock indices showed mixed results, with the Nasdaq up 0.18% and the Dow down 0.98% [3] - Nvidia's stock rose over 4%, adding approximately $161.8 billion (about 1160.5 billion RMB) to its market capitalization [3] Group 3 - International precious metal futures generally declined, with COMEX gold futures down 0.85% at $3330.50 per ounce [4] - COMEX silver futures fell 1.95% to $37.99 per ounce [4] Group 4 - International oil prices slightly decreased, with WTI crude oil down 0.34% at $66.75 per barrel [5] - Brent crude oil fell 0.52% to $68.85 per barrel [5] Group 5 - European stock indices closed lower, with Germany's DAX down 0.42%, France's CAC40 down 0.54%, and the UK's FTSE 100 down 0.66% [6] Group 6 - China's economy grew by 5.3% year-on-year in the first half of 2025, with a GDP of 660,536 billion RMB [8] - The National Bureau of Statistics indicated that despite challenges, the economy shows resilience and positive trends [8] Group 7 - The Ministry of Commerce announced adjustments to the "Catalog of Technologies Prohibited from Exporting and Restricted from Exporting," adding new restrictions on battery cathode material preparation technologies [10] Group 8 - Nvidia's CEO Jensen Huang announced the start of H20 chip sales to the Chinese market, following U.S. government approval [17] - The launch of a new graphics card, RTX Pro, designed for computer graphics and AI, was also announced [17] Group 9 - Xiaozhu Technology reported significant growth in the humanoid robot sector, with expectations for accelerated application in the next 3-5 years [18] - The company has seen a notable increase in shipment volume compared to last year [18] Group 10 - Pop Mart anticipates a revenue increase of no less than 200% and a profit growth of no less than 350% for the first half of 2025 [19] - This reflects the potential of the trendy toy market [19] Group 11 - BMW announced a partnership with Momenta to develop a new generation of intelligent driving assistance solutions for the Chinese market [20] - This collaboration aims to enhance BMW's competitiveness in the smart automotive sector [20] Group 12 - Geely Holding Group signed a merger agreement with Zeekr, aiming to strengthen its global competitiveness in the intelligent electric vehicle sector [21] - The merger will allow Geely to cover various powertrain forms [21] Group 13 - XPeng Huitian completed a $250 million Series B financing round to accelerate the development and mass production of flying cars [23] - The company plans to deliver its "land aircraft" by 2026 [23] Group 14 - Loobo announced a strategic partnership with Uber to integrate thousands of autonomous vehicles into Uber's global network [25] - The initial deployment will occur in Asia and the Middle East by the end of this year [25] Group 15 - Zhiyuan Robotics received strategic investment from Charoen Pokphand Group to explore business opportunities in various verticals [27] - This investment aims to support the company's development in life sciences, new retail, and wellness services [27]

Group 1 - The core viewpoint of the news is that Bubble Mart is experiencing significant growth, driven by the popularity of its LABUBU brand, with projected revenue and profit increases for the first half of the year [1][4] - Bubble Mart expects its revenue for the six months ending June 30, 2025, to increase by no less than 200% compared to the same period last year, and profit to grow by no less than 350% [1][4] - The company attributes its performance to the global recognition of its brands and IPs, a diverse product range, and continuous high growth in all regional markets, leading to an increase in overseas revenue proportion [4][7] Group 2 - LABUBU's popularity has led to a significant rise in Bubble Mart's stock price, which has increased by approximately 200% this year, reaching a market capitalization of 353.5 billion HKD [4][7] - Despite the success, there are concerns about over-reliance on a few popular IPs and the influx of new competitors in the collectible toy market, which raises questions about Bubble Mart's valuation and future prospects [7][10] - The secondary market for LABUBU collectibles has seen a 50% price drop recently, indicating potential volatility and market correction following initial hype [8][10]

Core Viewpoint - Pop Mart expects significant revenue and profit growth, projecting a revenue increase of no less than 200% and a profit increase of no less than 350% for the six months ending June 30, 2025 compared to the same period in 2024 [1] Financial Performance - For the first half of 2024, Pop Mart reported revenue of 4.558 billion yuan, a year-on-year increase of 62.0%, and a net profit of 921 million yuan, up 93.32% year-on-year [1] - Adjusted net profit for the same period was 1.018 billion yuan, reflecting a 90.1% increase year-on-year [1] - The company’s revenue for the first half of 2024 is projected to exceed 13.7 billion yuan, with net profit exceeding 4.1 billion yuan and adjusted net profit exceeding 4.6 billion yuan [1] Growth Drivers - The board attributes the significant performance increase to several factors: 1. Enhanced global brand recognition and diverse product categories driving revenue growth across all regional markets [2] 2. Increasing overseas revenue proportion positively impacting gross and net profit margins [2] 3. Continuous optimization of product costs and improved expense management enhancing profitability [2] Market Outlook - In Q1 2025, Pop Mart reported a revenue growth of 165%-170%, with Chinese revenue increasing by 95%-100% and overseas revenue soaring by 475%-480% [6] - The management is confident in achieving over 50% sales growth in 2025, with overseas sales expected to double, targeting overall sales of 20 billion yuan and overseas sales exceeding 10 billion yuan [6] - The stock price has seen a significant increase, reaching a peak of 283.4 HKD, with a cumulative rise of over 200% since January [6] Competitive Position - Analysts note a rising trend in the popularity of multiple IPs, with products like Molly and CRYBABY selling out and commanding premiums in the secondary market [7] - The core competitive advantage of Pop Mart lies in its IP incubation and operational mechanisms, which have been validated over the years [7] - The company continues to expand its product offerings, with new stores launching in major cities and introducing various popular IP series [7]

泡泡玛特公告，预期本集团截至2025年6月30日止六个月之收入可能较截至2024年6月30日止六个月之收 入增长不低于200%；预期本期间本集团溢利(不包括未完成统计的金融工具的公允价值变动损益)较本集 团去年同期溢利可能录得增长不低于350%。 ...

Core Insights - UBS research indicates that Pop Mart has surged by 180% this year, driven by the popularity of Labubu, with a projected cash flow return on investment (CFROI) of 24% in 2024 and expected to exceed 40% in 2025/2026, significantly outperforming global peers [1][4] Financial Performance - The company's CFROI has improved to 24% due to a doubling in sales and a recovery in EBITDA margins, with a historical profit margin of 42%, far exceeding the industry median of approximately 20% [4][6] - Asset turnover has gradually reached the industry average, benefiting from accelerated sales growth over the past two years [4] Market Sentiment - Despite strong financial forecasts, the current market pricing model suggests a decline in CFROI to 32% by 2029, indicating skepticism about Pop Mart's ability to sustain high growth and profit margins [3][6] - There is a notable discrepancy between analysts' optimistic forecasts and the cautious market pricing, reflecting a lack of confidence in the company's long-term profitability [9] Valuation Scenarios - UBS's HOLT model outlines three potential scenarios for Pop Mart's stock performance: - **Current Market Scenario**: Implies a slight sales growth slowdown to 24% and a return of EBITDA margins to a five-year median of 35%, still outperforming peers [10] - **Optimistic Scenario**: If the company maintains a 28% sales growth and 40% profit margin, there is approximately 43% upside potential in stock price, positioning it as a "structural winner" [11] - **Pessimistic Scenario**: If the popularity of its IP declines, leading to a sales growth slowdown to 20% and profit margins dropping to around 25%, the stock could face a 42% downside risk, suggesting a "flash in the pan" perception [11] Strategic Positioning - Pop Mart is at a crossroads, with impressive financial metrics and growth momentum, but the critical question for investors is whether its strong IP creation and brand appeal can endure through market cycles and establish itself as a globally successful consumer brand [12]

Core Insights - The rise of LABUBU reflects the growing popularity of trendy toys among young consumers, driven by emotional value and the healing economy [1][10] - The phenomenon has led to a surge in counterfeit products, highlighting the strong vitality of Chinese trendy toy IPs and their global influence [1][10] Group 1: Market Dynamics - LABUBU has become a top trendy toy, significantly boosting consumer enthusiasm, with high foot traffic observed in stores like the Pop Mart in Beijing [3][5] - The popularity of LABUBU has resulted in a shortage of genuine products, giving rise to counterfeit versions known as "LAFUFU," which are being actively marketed [5][6] - The market for trendy toys in China is estimated to be worth around 600 billion yuan, accounting for 20% of the global market, with a projected compound annual growth rate of 33% [13][14] Group 2: Intellectual Property Protection - The emergence of counterfeit products has prompted companies like Pop Mart to take defensive measures, such as registering trademarks for "LAFUFU" to protect their IP [6][9] - Pop Mart has registered over 1,500 copyrights and is involved in numerous legal disputes related to trademark and copyright infringements [7][9] - Customs authorities have intensified efforts to combat counterfeit LABUBU products, seizing over 38.67 million items in the first half of the year [9][10] Group 3: Consumer Behavior - LABUBU resonates with consumers aged 18 to 29, fulfilling their emotional and identity needs, as evidenced by personal stories of attachment to the product [10][12] - The design of LABUBU, characterized by its unique and imperfect features, appeals to consumers seeking authenticity and emotional connection [10][12] - The trend reflects a broader shift in consumer preferences towards emotional and spiritual fulfillment rather than mere material satisfaction [12][13] Group 4: Cultural Impact - The success of LABUBU signifies a shift in China's cultural narrative, moving from "Made in China" to "Created in China," showcasing the country's cultural and supply chain advantages [13][14] - LABUBU's global appeal has been recognized, with the character being awarded titles and gaining traction in international markets [13][14] - The growth of the trendy toy industry is indicative of China's rising cultural soft power and the increasing recognition of Chinese stories and designs worldwide [14][16]

Summary of Key Points from the Conference Call Industry Overview - The潮玩 (trendy toy) market is benefiting from macroeconomic development, with China's per capita GDP surpassing $12,000, shifting consumer spending from necessities to discretionary items, providing growth momentum for the潮玩 industry [1][2] - The IP toy market in China is projected to reach approximately 57.8 billion RMB by 2025, with an annual growth rate of about 20%, indicating a robust trend in the consumer sector [2] Core Insights and Arguments - IP toys account for about half of the sales in the潮玩 market, with blind boxes being the main driving force [1][2] - The rise of潮玩 brands is largely attributed to consumer-driven marketing, aesthetic appeal, third-party certification (such as going public), and social media dissemination, which reduces marketing costs and fosters a vibrant secondary market [1][4] - The core competitiveness of潮玩 includes aesthetic PUA (Pick Up Artist), third-party certification, and self-promotion, allowing brands like泡泡玛特 (Pop Mart) to attract young consumers and enhance brand credibility through unique designs and social attributes [1][5] Consumer Behavior and Market Dynamics - The purchase behavior of潮玩 and new consumer products is characterized by randomness, such as the uncertainty of obtaining rare cards or hidden items in blind boxes, which stimulates dopamine release and increases pleasure [8][9] - Blind boxes dominate the潮玩 market, accounting for over half of the sales due to their more appealing presentation compared to directly displayed products [8] Competitive Landscape -潮玩 companies can be categorized into three types: channel-based (e.g.,名创优品), third-party IP-based (e.g.,布鲁可, 卡游), and self-owned IP companies (e.g.,泡泡玛特). Self-owned IP companies are considered to have the most long-term value due to their rarity and sustainability [3][11][15] - Successful潮玩 brands like泡泡玛特 have gained credibility through third-party certification, unlike unsuccessful brands like暴力熊 (Bearbrick) and蒙奇奇 (Monchhichi), which lacked such validation [6][7] Additional Insights - The core competitiveness of self-owned IP companies lies in their ability to sustain operations, which determines whether an IP can remain relevant and profitable over time [13] - Companies using third-party IP for product sales can achieve growth by enhancing their operational and channel capabilities, focusing on exclusive IP acquisition to avoid homogenization and ensure profitability [14]

Core Viewpoint - Pop Mart is facing a supply-demand imbalance, particularly with its Labubu IP, which is experiencing a significant revenue surge of 726.6% in 2024, accounting for 23.3% of total revenue [1] Group 1: Supply and Demand Dynamics - The demand for Labubu products has exceeded production capacity, leading to market shortages and consumer conflicts in stores [1] - Industry insiders suggest that Pop Mart may be employing "hunger marketing" strategies to maintain product scarcity and perceived value [1][2] - A representative from a toy factory indicated that many domestic manufacturers have the capability to scale production, but Pop Mart appears to intentionally limit supply to enhance market interest [2] Group 2: Company Response and Strategy - In response to the supply challenges, Pop Mart is actively working to expand production capacity and is considering delaying the launch of some new products [2] - The company aims to redistribute production capacity across existing product lines and initiate pre-sales in batches to better manage consumer access and curb secondary market speculation [2]

Core Viewpoint - The company is experiencing a significant surge in revenue from its IP Labubu, which increased by 726.6% in 2024, accounting for 23.3% of total revenue, raising questions about potential intentional supply constraints to maintain scarcity [1][2][15]. Revenue and Growth - In 2024, the THE MONSTERS series, which includes Labubu, generated a total revenue of 30.4 billion, marking a dramatic increase from 5.8% to 23.3% of the company's total revenue compared to 2023 [15]. - Other IPs have seen a decline in revenue share, although their absolute revenue has still increased, indicating a balanced growth strategy [15]. Supply Chain and Production Challenges - The company is facing supply shortages due to overwhelming demand for Labubu, leading to delayed shipments across multiple product lines [4][11]. - Industry insiders suggest that the production of Labubu is feasible, but the company may be intentionally controlling output to create a sense of scarcity and maintain market value [5][6][8]. Marketing Strategy - There are indications that the company employs "hunger marketing" tactics, where limited availability enhances consumer desire and perceived value [5][6][16]. - The company aims to balance the market demand across different IPs to avoid over-reliance on a single product, which could pose long-term risks [16]. Production Capacity and Future Plans - The company is actively working to expand production capacity and is considering delaying the launch of new products to better manage existing demand [12][14]. - A new project at a manufacturing facility is set to increase production capabilities significantly, indicating a strategic move to meet growing demand [10].