POP MART(09992) 第一上海证券·2025-02-28 08:23Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of HKD 125.6, indicating a potential upside of 17.2% from the current price [2][3]. Core Insights - The report highlights that Pop Mart is a leading player in the Chinese trendy toy market, with a comprehensive business model that spans from IP incubation to brand operation, demonstrating strong growth potential in both domestic and international markets [1][2][19]. - The company achieved a revenue of CNY 6.301 billion in 2023, reflecting a year-on-year growth of 36.5%, with a total registered membership of 34.35 million [1][4]. - The global trendy toy market is projected to grow from USD 19.8 billion in 2019 to USD 41.8 billion by 2024, with a compound annual growth rate (CAGR) of 16.1% [21][22]. Company Overview - Pop Mart was established in 2010 and has evolved into a leading cultural and entertainment company in China, focusing on trendy toys and IP development [6][19]. - The company operates a fully integrated platform covering the entire trendy toy industry chain, connecting niche designers with a broad consumer base [1][31]. Financial Performance - The report forecasts the company's net profit for FY24, FY25, and FY26 to be CNY 2.726 billion, CNY 3.961 billion, and CNY 5.216 billion, respectively, indicating significant growth [2][4]. - The company’s revenue is expected to exceed CNY 10 billion in 2024, showcasing robust growth momentum [6]. Market Dynamics - The Chinese trendy toy market is still in its early stages, with a projected market size of CNY 764 billion by 2024 and CNY 1.101 trillion by 2026, reflecting a CAGR of 20% [20][23]. - Pop Mart holds a market share of 8.5% in the Chinese trendy toy market, positioning it as the largest brand in the sector [24]. IP Strategy - The core of Pop Mart's business model is its IP strategy, which includes self-owned, exclusive, and non-exclusive IPs, with a total of 93 IP images as of mid-2024 [7][33]. - The company has successfully launched several popular IPs, such as MOLLY and SKULLPANDA, which have shown strong sales performance [35][36]. Supply Chain and Innovation - Pop Mart has developed a responsive and innovative supply chain system, reducing inventory turnover days from 133 to 101 days in 2024 [43]. - The company emphasizes material and process innovation, enhancing product quality and design capabilities [44]. Distribution Channels - The company has established a comprehensive online and offline distribution network, with a total of 2,789 stores as of mid-2024 [50]. - Offline channels contribute 52% of revenue, while online channels account for 29%, indicating a balanced sales strategy [50].