SPDB International·2025-11-18 11:59Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 286.9, representing a potential upside of 32.0% from the current price of HKD 217.4 [1][5][15]. Core Insights - The report emphasizes that the company is not solely reliant on the popularity of its Labubu IP, but rather operates as a platform for creating and commercializing multiple IPs. The ability to launch new successful IPs is seen as a key competitive advantage [5]. - Recent sales trends in the U.S. market have shown a recovery, with expectations for continued growth during the holiday season. The report suggests that the recent slowdown in sales was largely due to pre-sales in previous months [5]. - The company has significant growth potential in the North American and European markets, which currently represent a small portion of total revenue. The report highlights the potential for expansion through physical retail stores in these regions [5]. - The current valuation is considered attractive, with a P/E ratio of 15 times the estimated earnings for 2026, indicating high value for investors [5]. Financial Performance and Projections - The company is projected to achieve substantial revenue growth, with estimated revenues of RMB 38,003 million in 2025, reflecting a year-on-year increase of 191.5% [7][10]. - Net profit is expected to reach RMB 12,920 million in 2025, representing a significant increase of 313.4% compared to the previous year [7][10]. - The report outlines a steady improvement in profit margins, with gross profit margins projected to rise to 70.8% by 2025 [10][11]. Market Performance - The company's stock has experienced volatility, but recent data suggests a recovery in market sentiment, with short-selling activity decreasing [5]. - The report notes that the company's sales in the domestic market have shown impressive growth, with online sales increasing by 212% in the first half of 2025 [11]. Regional Revenue Breakdown - In the first half of 2025, the company reported a 440% increase in overseas revenue, with North America showing a staggering growth rate of 1,142% [11]. - The report indicates that the company has only a limited number of retail stores in North America and Europe, suggesting significant room for growth in these markets [5].