Hua Er Jie Jian Wen·2026-01-07 02:31Core Viewpoint - Morgan Stanley believes that the market is overly focused on Pop Mart's high-frequency sales data in the North American market, significantly underestimating the company's true value [1] Group 1: North American Sales Expectations - The widely circulated credit card consumption data suggests that Pop Mart's North American sales in 2025 will be around 6 billion RMB, with a projected decline of 25-30% in Q4 compared to Q3 [2] - Morgan Stanley's analysis predicts that Pop Mart's North American sales in 2025 will be 7.1 billion RMB, with Q4 sales remaining close to Q3 levels [2] - The firm estimates that the average annual sales per store in North America will reach 45-50 million RMB, indicating strong demand as new stores can recover their investment in 1-2 months [2] Group 2: Online and Offline Sales Dynamics - In the first half of the year, online sales accounted for approximately 60% of Pop Mart's North American market, driven further to 60-70% in Q3 due to Labubu pre-sales [3] - Offline sales have a more diverse IP distribution compared to online channels, enhancing opportunities for new IP exploration and cross-selling [3] - The experience in China and the Asia-Pacific region shows that physical stores are essential for cultivating repeat customers, who exhibit more stable purchasing behavior than social media-influenced consumers [3] Group 3: Growth Drivers and IP Diversification - Morgan Stanley highlights that the market is overlooking Pop Mart's sales of older Labubu plush toys in the second half of 2025, with more new products expected in 2026 [4] - The firm identifies the restoration of quarter-on-quarter growth and evidence of IP diversification as key catalysts for improving market sentiment [5] - The company is expected to accelerate growth in Q2 and Q3 of 2026, driven by continuous store openings, new customer acquisition, and product launches [5] Group 4: Long-term Investment Logic - Pop Mart is positioned to capture the growing demand for "kidult" IP products globally, evolving into a global IP collectibles platform [6] - The company's business model is asset-light with high ROE, aiming for long-term high-quality returns while leading the global kidult trend [6] - At the current valuation, Pop Mart trades at approximately 16 times the 2026 P/E ratio, with a 21% profit growth expectation, potentially dropping to 12 times if sales reach 60 billion RMB [6]