Hua Er Jie Jian Wen·2025-06-11 06:32Core Insights - The report by Morgan Stanley highlights the exponential growth of Pop Mart in North America and Europe, driven by viral marketing and social media, with sales expected to rise from $3.6 billion in 2025 to $6 billion by 2027, making it one of the fastest-growing consumer brands globally [1][3]. Group 1: Market Performance - Morgan Stanley raised Pop Mart's target price from HKD 224 to HKD 302, reflecting a 35% increase while maintaining an "Overweight" rating [3]. - The overseas growth of Pop Mart is significantly attributed to the "social media tailwind effect," with products like Labubu becoming viral sensations after being showcased by celebrities [4][6]. Group 2: Product Strategy - The Labubu series, launched at the end of 2023, ignited market enthusiasm and is expected to contribute 28% of revenue in 2024, with a fourth generation of products anticipated by late 2025 or early 2026 [7]. - Other IPs like Molly and Dimoo are also performing well, indicating that Pop Mart's diverse IP matrix provides broader growth opportunities [9]. Group 3: New Business Ventures - Pop Mart is expanding beyond toys with new ventures like Pop Land (an IP-themed amusement park) and POPOP (fashion jewelry), which are seen as significant long-term value drivers [10]. - The Pop Land project in Beijing has already turned a profit, with annual revenue projected between RMB 300 million to 500 million, and plans for expansion are underway [10][11]. Group 4: Future Growth Potential - The North American and European markets are expected to be key growth engines for Pop Mart, with North American sales projected to reach levels comparable to the Chinese market by 2028-2029 [12]. - Starting from mid-April 2024, Pop Mart will increase the pricing of new products in North America by 80-100%, with an expected gross margin of 75%, showcasing its global potential despite potential tariff pressures [14].