POP MART(HK:09992) KAIYUAN SECURITIES·2024-03-20 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Viewpoints - The company, Pop Mart, is a leading player in the domestic trendy toy industry, having recovered from the impacts of public health events in 2023, with a revenue of 2.81 billion yuan in H1 2023, representing a year-on-year increase of 19.3%, and a net profit of 477 million yuan, up 43.2% year-on-year. The company's efficient business model empowers IP, ensuring stable and continuous IP monetization, with a solid domestic market position and accelerated overseas expansion, indicating broad future growth potential [4][39]. - The trendy toy industry is in a rapid growth phase, with the global market expected to reach 44.8 billion USD by 2024, driven by increased per capita consumption and rising penetration rates in the domestic market, which is projected to reach 48.6 billion yuan by 2025 [4][15]. - The company has a comprehensive and efficient business model that effectively maintains the popularity of classic IPs and continuously creates hit IPs, widening its competitive moat [4][39]. Summary by Sections Trendy Toy Industry - The trendy toy industry is experiencing a blue ocean dividend, with a low concentration of leading brands globally, primarily in Europe, America, Japan, and South Korea. The domestic market's concentration is increasing, with Pop Mart holding a market share of 13.6% as of 2021, leading the industry [4][21]. - The industry is characterized by a growing user base, particularly among Generation Z, who are becoming the main consumers, with a significant increase in the number of sticky users and high membership income contribution [26][30]. Pop Mart - Pop Mart has successfully capitalized on the blind box trend, which meets the emotional needs of young consumers, particularly those from Generation Z who often feel isolated in urban settings. The company has maintained a leading market share of 13.6% in the trendy toy market as of 2021 [38][39]. - The company has seen a recovery in its revenue and performance in 2023, with a significant increase in both revenue and net profit compared to the previous year, indicating a positive outlook for future growth [39]. Competitive Advantages - The company has established a diverse IP matrix and is continuously innovating in product design, which enhances brand value and drives revenue growth. The introduction of new products and collaborations with popular IPs has contributed to its success [4][39]. - The company is expanding its domestic and overseas channels, with a focus on enhancing its retail presence in lower-tier cities and accelerating store openings abroad, which is expected to create a second growth curve [4][39].