Ge Long Hui·2026-01-22 06:20Core Viewpoint - The market expectations for Pop Mart are significantly influenced by short-term high-frequency tracking data, leading to concerns about IP popularity and sustainable performance growth. However, Q4 performance data indicates strong resilience in both domestic and overseas markets, supported by the IP matrix after the peak sales of Labubu 3.0. The company’s recent share buyback reflects confidence in its growth prospects, and the valuation appears attractive amid current market divergences, maintaining a "Buy" rating. Dimension 1: Q4 Overseas Market Performance - Q4 overseas performance is expected to exceed market pessimism, particularly in North America, where TikTok sales are projected to decline by approximately 10% quarter-on-quarter. However, improved inventory levels in stores are anticipated to enhance offline revenue significantly compared to Q3, with overall channel sales expected to remain stable or improve. In Southeast Asia, sales declines in H2 are attributed to natural channel structure changes, with strong growth expected in all-channel sales due to increased store numbers. The second-hand market dynamics indicate that sufficient inventory is crucial for driving new IP growth, aligning with a long-term strategy of diversified IP development [1][2]. Dimension 2: Emergence of Diverse IPs - Q4 data shows successful diversification of domestic IPs, with Labubu's share on Douyin dropping to about 30%. New IPs like Xingxingren and Crybaby are rapidly growing, narrowing the gap with Labubu. In Southeast Asia, Labubu's sales share has fallen below 40% in top-selling products, with new IPs collectively accounting for over 50% in markets like Indonesia. The established channel layouts in domestic and Southeast Asian markets facilitate the transfer of popularity from leading IPs to emerging ones, with potential for new IP growth as offline presence improves [2]. Dimension 3: Improving Ecosystem and Content Layout Potential - The company's IP content strategy is entering a practical implementation phase, with animated shorts expected to reach fans effectively through low-cost, high-frequency methods. Future long-form films may enhance IP influence, moving towards a goal of IP group development. The content strategy is anticipated to become a new tool for breaking into wider markets, complementing existing strengths in products, store experiences, and social media. New business ventures in desserts and accessories are also noteworthy [2]. Profit Forecast and Valuation - The profit forecast remains unchanged, with adjusted net profits projected at 135 billion, 185 billion, and 237 billion for 2025-2027. The target price is set at 410 HKD, based on a 27x PE for 2026, reflecting the company's high barriers to entry and ongoing diversification in IP and business models, maintaining a "Buy" rating [3].