Core Viewpoint - Deutsche Bank warns that Pop Mart is facing an "Availability Paradox," as the rapid expansion of production capacity is transforming the once-scarce Labubu IP into a mass consumer product, which will diminish its fashion appeal and secondary market prices [1][2]. Production Capacity and Market Dynamics - Pop Mart's production capacity has surged from an average of 10 million units per month in the first half of the year to 50 million units per month by the end of the year [1]. - This aggressive capacity expansion is seen as a risky gamble, trading scarcity for short-term revenue growth [1]. Financial Projections - Deutsche Bank estimates that this strategy will yield an adjusted net profit of approximately RMB 14.5 billion in 2025 [2]. - The bank maintains a "Hold" rating for Pop Mart with a target price of HKD 228, based on a projected P/E ratio of 18x to 20x for 2025 [1][11]. Market Sentiment and Pricing Trends - Since August 2025, the premium prices for Labubu and other popular IPs have significantly declined, with some hidden variants losing over 50% of their peak value [5]. - The secondary market has shown alarming signs, with regular versions of Labubu dropping below official retail prices on platforms like "Qian Dao" and "Xian Yu" [5]. Consumer Behavior and Product Reception - The popularity of Labubu has shifted from a "must-have" to a readily available product, leading to a decrease in consumer interest and a drop in search trends on Google since mid-2025 [7]. - Recent product launches, such as "Labubu Mini" and "The Monsters 1 a.m.," have not sold out as quickly as previous releases, indicating potential consumer fatigue [10]. Valuation Scenarios - Deutsche Bank presents two contrasting valuation scenarios for Pop Mart: - Bear Case: If Labubu's popularity peaks in 2026 without new IPs, net profit could drop to RMB 10.6 billion, leading to a P/E ratio of 23x [11]. - Bull Case: If growth continues and new IPs emerge, net profit could exceed RMB 23.1 billion, resulting in a P/E ratio of 13x [11].

Core Insights - The Chinese gift industry is undergoing a paradigm shift driven by the Z generation's purchasing decisions, with digital procurement penetration exceeding 11.5% and emotional value premium rising by 16% annually [2][3][11] Industry Trends - The industry has transitioned from a phase of scale growth to a critical period of "value reconstruction" and "efficiency revolution" [2] - The confidence index for the gift industry in 2025 has increased by 9 points year-on-year, reaching 80, indicating a positive outlook [2] - There is a significant divergence in confidence among different segments, with cross-category and brand channel merchants scoring 86, while processing and OEM factories score only 75 [2] Key Contradictions - Demand upgrade vs. budget contraction: Z generation employees demand personalized and high-quality gifts, while corporate welfare budgets are shrinking [2] - Digital efficiency vs. compliance risk: 48% of companies are increasing digital procurement investments, but this leads to heightened compliance and risk management challenges [2] - Homogeneous competition vs. differentiated breakthroughs: Standard products face declining profit margins, while demand for cultural and health-related gifts is growing [2] Strategic Responses - Cost reduction and efficiency enhancement: 46% of companies prioritize improving quality-price ratios, leveraging digital tools to streamline procurement processes [2][4] - Compliance risk management: 35% of companies focus on compliance management, with third-party inspection mechanisms becoming more prevalent [2][4] Market Dynamics - The procurement landscape is becoming younger, with 90% of decision-makers being under 34 years old, leading to a shift in purchasing logic [3][11] - Small and medium-sized private enterprises account for over 70% of the market share, indicating a shift in purchasing power [3] Product and Service Innovations - The gift industry is moving towards professional competition, with a focus on emotional value and brand expression [11] - Successful case studies highlight the importance of integrating cultural elements and innovative marketing strategies to enhance product appeal [7][10] Future Outlook - The industry is expected to continue evolving towards high-quality development, with a focus on emotional value and compliance-driven procurement practices [11] - Companies that can adapt to changing consumer demands, embrace digital transformation, and maintain compliance will emerge as industry leaders [11]

Summary of Pop Mart International Group (9992.HK) Conference Call Company Overview - **Company**: Pop Mart International Group (9992.HK) - **Industry**: Consumer Goods, specifically in the IP collectibles market - **Market Cap**: Approximately US$37.7 billion as of November 27, 2025 Key Points 2026 Outlook - **Price Target**: Adjusted from HK$382.00 to HK$325.00, reflecting market conditions and growth expectations [1] - **Sales Forecast**: Expected total sales of Rmb48 billion in 2026, representing a 26% year-over-year growth [11] - **Growth Drivers**: Sustained momentum anticipated from China and APAC regions, supported by strategic marketing and store openings in the US [1][2] Performance Metrics - **Revenue Breakdown**: - Labubu sales projected at Rmb15.5 billion in 2025, with growth moderating to 13% in 2026 [3][17] - Non-Labubu IPs expected to contribute Rmb22.4 billion in 2025, with a growth forecast of 35% in 2026 [11][13] - **Net Profit Margin**: Expected to remain high, around 32% in 2026, supported by lower advertising and promotional expenses [4][46] Market Dynamics - **US Market Growth**: Forecasted sales growth of 34% in 2026, with a long-term view that the US market could surpass China due to its size and demand for IP collectibles [22][23] - **Offline Expansion**: Emphasis on increasing offline presence, which currently accounts for only 35% of US revenue, compared to 60% in the broader toy and hobby category [25][30] Strategic Initiatives - **Product Launches**: Management plans to increase product launches in 2026, including new figurine collections and plush series [20][21] - **Localized Marketing**: Enhanced marketing efforts to strengthen Labubu's global presence through localized designs and collaborations [31][32] Financial Adjustments - **P/E Ratio**: Target P/E reduced from 32x to 26x for 2026, reflecting unfavorable market conditions and a focus on near-term growth [5][59] - **Sales Volatility**: Increased sales volatility expected in the short term due to market dynamics and consumer behavior shifts [5][59] Regional Insights - **Greater China**: Sales estimated at Rmb21 billion in 2025, with a growth forecast of 22% in 2026 [38] - **APAC Opportunities**: Strong growth potential in Japan and Korea, leveraging cultural similarities and consumer preferences [42][43] Risks and Considerations - **Market Sentiment**: Current bearish sentiment may overlook the long-term growth potential driven by a recurring customer base [2][3] - **Supply Chain Challenges**: Management is exploring production options in Latin America to shorten supply chains and improve US operations [35] Conclusion - Pop Mart is positioned for sustained growth in the IP collectibles market, with strategic initiatives aimed at expanding its customer base and enhancing brand presence both domestically and internationally. The company’s focus on offline expansion and localized marketing efforts is expected to drive future sales growth, despite current market volatility and adjustments in financial projections.

Group 1 - The core viewpoint emphasizes the steady progress of globalization, with a positive outlook on overseas supply chain and channel expansion to meet global fan demand [1] - The collectible toy category possesses strong display, social, and gifting attributes, making offline channels crucial for sales and brand marketing [1] - As of October 30, the company has expanded its overseas retail store count to 171, aligning with its strategic plan, with significant growth potential in North America, Europe, Southeast Asia, and East Asia [1] Group 2 - The performance of a single IP does not hinder the overall platform development, with the company's brand strength significantly improving [2] - The company has demonstrated its long-term IP operation capabilities, maintaining fan engagement through product innovation and iteration [2] - The global popularity of Labubu and other leading IPs has elevated the company's brand power, as evidenced by participation in major events like the Macy's Thanksgiving Day Parade [2] Group 3 - The company has adjusted its revenue forecasts for 2025-2027 to 38.865 billion, 52.738 billion, and 66.946 billion respectively, reflecting an optimistic outlook on store openings and product launches [2] - The adjusted net profit forecasts for the same period are set at 13.648 billion, 18.429 billion, and 23.569 billion, indicating confidence in the company's long-term operational capabilities and competitive landscape [2]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a positive outlook for its stock performance relative to the market benchmark [4][7]. Core Insights - The company is focusing on cross-regional expansion and IP development to support long-term operations, with a significant increase in revenue and net profit projected over the next few years [7]. - The company has successfully expanded its overseas retail presence, with 171 stores globally, and is well-positioned to meet growing demand from international markets [7]. - The report highlights the company's strong brand power and competitive advantages in IP design, operation, and supply chain management, which are expected to sustain long-term value creation [7]. Financial Data and Profit Forecast - Revenue projections show a substantial increase from RMB 6.301 billion in 2023 to RMB 66.946 billion by 2027, with a compound annual growth rate (CAGR) of approximately 27% [5][8]. - Net profit is expected to grow from RMB 1.184 billion in 2023 to RMB 23.569 billion in 2027, reflecting a CAGR of around 28% [5][8]. - The report anticipates a significant rise in earnings per share (EPS), from RMB 0.88 in 2023 to RMB 17.55 in 2027, indicating strong profitability growth [5][8].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company is expanding its global presence and IP portfolio, which supports long-term operations. The retail store expansion is expected to activate new user demand in various regions [9] - The company has demonstrated strong IP operation capabilities, maintaining fan engagement through product innovation and iteration. The overall brand strength has significantly improved [9] - The long-term business model is viewed positively, with competitive advantages in IP design, operation, and supply chain management [9] - Revenue and profit forecasts have been revised upwards for 2025-2027, reflecting confidence in the company's growth trajectory [9] Financial Data and Profit Forecast - Revenue projections for 2023 to 2027 are as follows: - 2023: 6,301 million RMB - 2024: 13,038 million RMB - 2025E: 38,865 million RMB - 2026E: 52,738 million RMB - 2027E: 66,946 million RMB - Net profit projections for the same period are: - 2023: 1,184 million RMB - 2024: 3,220 million RMB - 2025E: 13,648 million RMB - 2026E: 18,429 million RMB - 2027E: 23,569 million RMB - The company expects significant growth rates, with net profit growth rates reaching 324% in 2025 [7][10]

Group 1 - Morgan Stanley has lowered the target price for Pop Mart's stock from HKD 382 to HKD 325, representing a decrease of approximately 15% due to unfavorable trends in the global consumer sector [1] - The expected price-to-earnings ratio for Pop Mart in 2026 has dropped to 16 times, presenting an attractive entry point for investors interested in a company with high net asset returns and a focus on adult-oriented novelty products [1] - Despite short-term market disagreements regarding Pop Mart, its IP operational capabilities and high return on equity (ROE) characteristics still hold long-term investment value [1] Group 2 - Pop Mart's revenue for the first three quarters of this year has increased by 30% year-on-year, with overseas revenue accounting for 20% of total revenue [1] - The management anticipates that the number of overseas stores will exceed 100 by the end of the year [1]

Core Viewpoint - The debut of Labubu at the Macy's Thanksgiving Day Parade signifies a cultural shift, highlighting the rise of new Asian pop icons in global markets, replacing traditional symbols like Popeye [2][10]. Group 1: Market Performance and Growth Potential - Bank of America reiterated a "Buy" rating for Pop Mart, maintaining a target price of 400 HKD, indicating that the U.S. market is becoming a new growth engine for the company [4]. - Despite a recent 35% pullback from its peak, the company's fundamentals remain strong, particularly in overseas IP operations, presenting an attractive buying opportunity [7]. - The success of Labubu is seen as a precursor to the company's performance, with projections indicating significant revenue growth in the coming years [4][12]. Group 2: IP Strategy and Cultural Impact - The collaboration with Macy's for the "Friendsgiving in Pop City" float represents a strategic move to integrate modern cultural elements into traditional events [8][10]. - Labubu's popularity is not a random success but a result of sustained and effective IP management, with a significant contribution to overall revenue [11]. - The company has launched various strategic initiatives in the U.S., including pop-up stores and collaborations with popular media, enhancing its brand visibility [11]. Group 3: Financial Projections and Valuation - Financial models predict that Pop Mart will achieve revenues of 37.08 billion RMB and a net profit of 13.06 billion RMB in 2025, with further growth expected in 2026 [12]. - The target price of 400 HKD is based on a balanced valuation approach, indicating a favorable price-to-earnings ratio compared to industry averages [12]. - Recent stock price declines are attributed to market sentiment rather than fundamental deterioration, suggesting a potential value recovery opportunity [12].

Core Viewpoint - Pop Mart (09992) has seen a stock price increase of over 5%, currently trading at 229.2 HKD with a transaction volume of 1.129 billion HKD, driven by positive market sentiment and government initiatives to boost consumer spending in interest-based products [1] Group 1: Government Initiatives - The Ministry of Industry and Information Technology, along with other government bodies, has issued a plan to enhance the adaptability of supply and demand in consumer goods, promoting diverse interest-based consumption products such as pet-related items, anime, and trendy toys [1] - The plan aims to stimulate consumption by expanding the supply of interest-based products, which is expected to benefit companies like Pop Mart [1] Group 2: Market Outlook - Galaxy Securities holds an optimistic view on the development of overseas business in the consumer sector by 2026, recommending Pop Mart as a key player in the trendy toy market [1] - Recent high-frequency data from U.S. sales indicates a return to high growth rates, with expectations for Pop Mart's sales in the U.S. market to maintain strong growth during the Thanksgiving and Christmas seasons [1] - Zhongyou Securities also notes that Q4 is traditionally a peak sales season for Pop Mart, with significant consumer demand anticipated for gifts and trendy toys during Halloween, Black Friday, and Christmas in core overseas markets [1]

Core Viewpoint - Bank of America maintains a "Buy" rating for Pop Mart (09992) with a target price of HKD 400, indicating that the current valuation corresponds to a projected price-to-earnings ratio of 15 times for next year, and forecasts a compound annual growth rate of 34% in net profit from 2025 to 2027 [1][2] Group 1: Financial Projections - The company is expected to generate revenues of RMB 37.082 billion, RMB 52.135 billion, and RMB 65.988 billion for the years 2025, 2026, and 2027 respectively [2] - Adjusted profit forecasts for the same years are estimated at RMB 13.058 billion, RMB 18.515 billion, and RMB 23.482 billion [2] - Earnings per share are projected to be RMB 9.8 (up 2.8 times year-on-year), RMB 13.9 (up 41.8% year-on-year), and RMB 17.63 (up 26.8% year-on-year) for 2025, 2026, and 2027 respectively [2] Group 2: Market Activities and IP Operations - Pop Mart's IP operations in the U.S. market are strengthening, highlighted by Labubu's participation in Macy's Thanksgiving Parade, which has increased visibility and social media engagement [1] - Recent activities include Labubu's appearances at the Empire State Building and NBA games, along with collaborations with KOLs for street events [1] - The company has strategically launched more offline IP activities since Q4 of this year, including a pop-up store for Skullpanda in New York and a collaboration with the TV show "Wednesday," which may provide strong support for this year's performance during the U.S. holiday season [1]