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]

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.

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]

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]

Investment Rating - The report maintains a "Buy" rating for Pop Mart (9992 HK) with a target price of HKD 396.00 [2][6]. Core Viewpoints - Recent stock price corrections of Pop Mart, which have dropped nearly 25% from the August 26 high, are primarily driven by market concerns over the decline in second-hand prices of certain popular products and the sustainability of their popularity. However, the report argues that second-hand prices are not a reasonable measure of popularity, as the current price adjustments are mainly driven by supply expansion rather than changes in demand [2][3]. - The company is expected to achieve a successful path of "artistic equity," which lays a solid foundation for sustainable long-term growth. The report suggests that investors should actively seize the opportunity to position themselves for future gains [2][3]. Summary by Sections Second-Hand Price Fluctuations and Supply-Demand Dynamics - The recent fluctuations in the second-hand prices of Labubu are attributed to increased supply rather than changes in demand. The report highlights that the second-hand prices of products unaffected by capacity changes, such as Labubu blind box figures, have remained stable or increased, indicating strong IP popularity [3][12]. - Pop Mart's unique brand positioning and supply control in the artist IP toy market provide it with a competitive edge, reducing the likelihood of new entrants causing supply excess and price instability [3][14]. New Product Launches and Pricing Strategies - Recent product launches, such as Mini Labubu, have generated significant fan engagement and strong sales performance in North America. The company demonstrates flexibility in pricing strategies, allowing for differentiated pricing across various IPs and series [4][5]. - The upcoming Q3 earnings report is anticipated to reflect positive impacts from new product releases and the holiday season, with expectations for continued high growth in Q4 [4][5]. Long-Term Growth Drivers - The report outlines several growth drivers for Pop Mart's performance through 2026, including rapid capacity expansion in plush toys, a diverse range of new product categories, and the potential for significant revenue growth from major IPs like The Monsters [5][23]. - The company is expected to continue expanding its store presence, particularly overseas, which will enhance brand influence and customer acquisition [5][23]. Profit Forecast and Valuation - The report projects adjusted net profits for 2025-2027 to be RMB 116 billion, RMB 170 billion, and RMB 220 billion, respectively, reflecting an upward revision of 14% for 2025 [6][9]. - The target price is set at HKD 396, based on a PE ratio of 42x for 2025, which is higher than the average PE of comparable companies [6][33]. Unique Business Model and Market Position - Pop Mart's unique business model, characterized by strong control over the entire industry chain, allows for both IP innovation and product category innovation, reinforcing its market position [31][34]. - The establishment of a global fan ecosystem enhances the company's ability to transmit heat across regions and IPs, further solidifying its competitive advantage [34].

Core Viewpoint - The recent launch of popop's gold jewelry series, leveraging the popularity of the IP Baby Molly, has resulted in significant consumer interest and sales growth, coinciding with a rising gold price trend [1][7][10]. Group 1: Product Launch and Market Response - Popop, a jewelry brand under Pop Mart, has officially released its first gold jewelry series, featuring products like gold beads, pendants, and decorative items, priced between 980 yuan and 56,800 yuan [1][7]. - The most expensive item in the series is a 41-gram gold bottle ornament, priced at 56,800 yuan [1]. - Within three days of the launch, popop's two offline stores experienced a notable increase in customer traffic and sales [1]. Group 2: Industry Context and Market Potential - The Chinese jewelry market is projected to reach a scale of approximately 778.8 billion yuan in 2024, indicating significant growth potential despite current challenges such as demand fatigue and product homogeneity [7][12]. - The gold jewelry market is facing a decline in consumption, with a reported 3.54% decrease in gold consumption and a 26% drop in gold jewelry demand in the first half of 2025 [12][15]. - The recent surge in gold prices, with COMEX gold futures reaching over 3,700 USD per ounce, has led to increased retail prices for gold jewelry, with some brands pricing gold at 1,092 yuan per gram [12][13]. Group 3: Company Performance and Strategic Direction - Pop Mart reported a revenue of 13.88 billion yuan in the first half of 2025, marking a year-on-year increase of 204.4%, with net profit exceeding the total for the entire year of 2024 [9]. - The company aims to redefine jewelry as a medium for emotional expression and personal sentiment, focusing on creating wearable art that resonates with consumers [15][16]. - The strategy of integrating IP with jewelry is seen as a pathway to attract younger consumers and create trendy products, as evidenced by collaborations with well-known IPs by leading jewelry brands [15][16].

Group 1 - The event "2025 Tianfu Cultural and Creative Gathering" was held in Beijing, focusing on capital connection, industry exchange, and cooperation expansion among over 20 digital cultural enterprises from Chengdu [4] - Sichuan Leixing Cultural Industry Group, a listed company on the Tianfu Cultural and Creative Board, has a diverse business scope including brand design, cultural construction, event planning, cultural tourism, creative design R&D, and intangible cultural heritage promotion [2] - The chairman of Sichuan Leixing Cultural expressed gratitude for the event organization and highlighted the importance of the opportunity for deep industry connections, reflecting Chengdu's improved business environment and emphasis on cultural industry development [1][4] Group 2 - Sichuan Leixing Cultural's "Anyi" panda image was recognized as one of the top ten domestic tourism promotion cases in 2023, showcasing the company's successful branding efforts [2] - The event was supported by various organizations, including the Chengdu Cultural Industry Development Promotion Center and the Digital Cultural Industry Alliance of Zhongguancun, indicating strong institutional backing for cultural initiatives [1]

Group 1 - The event "2025 Tianfu Cultural and Creative Fair" was held in Beijing, focusing on capital connection, industry exchange, and cooperation expansion among over 20 digital cultural enterprises from Chengdu [1] - The event was guided by the Chengdu Municipal Committee of the Communist Party of China and organized by the Chengdu Cultural Industry Development Promotion Center, with support from various cultural and financial institutions [1] - Zhao Peng, Chairman of Sichuan Leixing Cultural Industry Group, expressed gratitude for the event's organization and highlighted previous collaborations with Pop Mart, indicating potential new opportunities from the visit [1][5] Group 2 - Zhao Peng noted that the event reflects the continuous optimization of Chengdu's business environment and the city's emphasis on the cultural industry [5] - Sichuan Leixing Cultural is listed on the Tianfu Cultural Innovation Board and is a backup enterprise for cultural listings in Sichuan, with a diverse business scope including brand design, cultural construction, event planning, and intangible cultural heritage promotion [5] - The company has successfully created the "Anyi" panda image, which was recognized as one of the top ten domestic tourism promotion cases in 2023 [5]

Core Viewpoint - Morgan Stanley downgraded Pop Mart's stock rating to "Neutral" due to a lack of clear growth catalysts and unattractive current valuation, raising market concerns about the potential decline in product popularity [1] Group 1: Stock Performance - On September 15, Pop Mart's stock opened with a significant drop, falling over 8% at one point, and closed at 259 HKD, reflecting a decline of 6.43% [1] - Since reaching an all-time high on August 26, Pop Mart's stock price has decreased by 30% [3] Group 2: Product Market Trends - Concerns have emerged regarding the waning popularity of Pop Mart's products, particularly the Labubu series, with its trading prices on the secondary market experiencing volatility [1] - The average transaction price for the Labubu series has shown a downward trend, with some regular models trading below their original price of 99 CNY [1] - The hidden version "Ben Wo," a limited edition product, has seen its second-hand market price drop to around 700-800 CNY, with some listings going as low as just over 200 CNY [2]