Hua Er Jie Jian Wen·2025-10-16 01:06Core Viewpoint - Morgan Stanley believes that Pop Mart's fundamentals have not changed but have become stronger, and the market's panic presents an excellent allocation opportunity [1] Group 1: Rating and Price Target Adjustment - On October 15, Morgan Stanley upgraded Pop Mart's rating from "Neutral" to "Overweight" and raised the target price from HKD 300 to HKD 320 [1] - The adjustment is based on two key factors: the sustained popularity of Labubu and the success of the new IP "Twinkle Twinkle" [1] Group 2: Labubu's Performance - Labubu's production capacity has increased tenfold compared to Q1 2025, yet the Labubu 3.0 and Mini Labubu series remain sold out at all sales points, dispelling market concerns about demand sustainability [2] - The resale price of the Halloween "Why So Serious" plush series featuring Labubu reached a premium of 290% in the secondary market [3] Group 3: New IP Development - The new IP "Twinkle Twinkle" is rapidly becoming a new growth driver, with products from a recent Halloween series selling out within minutes on major online platforms [4] - The secondary market premium for "Twinkle Twinkle" reached 130%, indicating strong demand and a real fan base [5] Group 4: Market Sentiment and Valuation - Pop Mart's stock price has dropped 24% from a recent high of HKD 335.40 to HKD 254, while the Hang Seng Index has risen by 7% during the same period [6][7] - Morgan Stanley predicts that Pop Mart's sales and adjusted profits will grow by 165% and 276% year-on-year in 2025, respectively, with continued growth in 2026 [10] Group 5: Global Supply Chain Strategy - Morgan Stanley believes that the financial impact of global trade tensions on Pop Mart will be limited, as the company has prepared inventory for the 2025 holiday season [11] - The company has the ability to raise prices to offset rising costs, having successfully increased blind box prices by 12% and plush toy prices by 27% in April 2025 [11] - Pop Mart is planning six global manufacturing centers to support long-term global expansion, with sales contribution from the Americas expected to rise from 21% in 2025 to 28% in 2027 [13]