POP MART(09992) 民生证券·2024-08-21 12:41Investment Rating - The report maintains a "Recommend" rating for Pop Mart (9992 HK) [2][3] Core Views - Pop Mart's 2024H1 performance exceeded expectations with revenue of RMB 4 558 billion and net profit of RMB 921 million representing year-over-year growth of 62% and 93 3% respectively [2] - Overseas business revenue surged by 260% indicating a harvest period for global expansion [2] - The company's gross margin and adjusted net margin improved to 64 0% and 22 3% respectively driven by product design optimization cost control and increased high-margin overseas sales [2] - Pop Mart's IP recognition continues to grow with artist IP revenue reaching RMB 3 69 billion accounting for 81 0% of total revenue [2] Financial Performance Revenue Breakdown - Domestic revenue in 2024H1 was RMB 3 206 billion up 31 5% year-over-year with significant growth in TikTok sales up 91% [2] - Overseas revenue reached RMB 1 351 billion up 259 6% year-over-year with Southeast Asia North America and Australia showing particularly strong growth [2] - Revenue from offline online and wholesale channels in China was RMB 1 79 billion RMB 1 10 billion and RMB 320 million respectively [2] Product Categories - Revenue from hand figures MEGA plush toys and derivatives was RMB 2 66 billion RMB 590 million RMB 450 million and RMB 870 million respectively [2] - Plush toys saw the most significant growth with a 993 6% year-over-year increase [2] Profitability - Gross margin increased by 3 7 percentage points to 64 0% while adjusted net margin rose by 3 3 percentage points to 22 3% [2] - Sales and administrative expense ratios decreased by 1 5 and 2 2 percentage points respectively [2] Future Outlook - Pop Mart plans to expand its presence in Southeast Asia and Europe with a focus on opening flagship stores in global landmarks and enhancing online platforms [2] - The company aims to enrich its product lines through collaborations with well-known brands and artists to boost global influence [2] Financial Projections - Revenue is projected to grow to RMB 9 954 billion in 2024 RMB 12 462 billion in 2025 and RMB 15 394 billion in 2026 [3] - Net profit is expected to reach RMB 2 009 billion in 2024 RMB 2 508 billion in 2025 and RMB 3 175 billion in 2026 [3] - The company's P/E ratio is forecasted to be 28X in 2024 23X in 2025 and 18X in 2026 [3] Operational Efficiency - Inventory turnover days decreased from 133 days in 2023 to 101 days in 2024H1 reflecting improved inventory management [2] - The company's total asset turnover is expected to increase from 0 68 in 2023 to 0 91 in 2026 [8] Valuation Metrics - The EV/EBITDA ratio is projected to decline from 27 70X in 2023 to 11 65X in 2026 indicating improving valuation attractiveness [8] - ROE is expected to rise from 13 93% in 2023 to 21 03% in 2026 [8]