POP MART(HK:09992) Minsheng Securities·2024-03-21 16:00Investment Rating - The report maintains a "Buy" rating for Pop Mart (9992.HK) [3][4]. Core Views - Pop Mart's 2023 annual performance shows significant growth, with revenue and adjusted net profit reaching 6.301 billion and 1.082 billion HKD, respectively, representing year-on-year increases of 36.5% and 127.5% [3][4]. - The company's strong revenue growth is driven by popular IPs, with artist IP revenue contributing 4.822 billion HKD, a 32.49% increase, accounting for 76.5% of total revenue [3][4]. - The domestic market is recovering, with offline sales showing resilience and overseas expansion exceeding expectations [4]. Summary by Sections Financial Performance - In H2 2023, Pop Mart achieved revenue of 3.487 billion HKD and adjusted net profit of 606 million HKD, reflecting year-on-year growth of 54.4% and 324.1% respectively [3]. - The gross margin and adjusted net margin for H2 2023 were 62.1% and 18.8%, up 5.2 and 10.1 percentage points year-on-year [4]. Market Dynamics - The report highlights the recovery of offline consumption in the domestic market, with H2 2023 offline, online, and wholesale revenues of 1.577 billion, 0.893 billion, and 0.327 billion HKD, respectively, showing increases of 61.9%, 4.8%, and 141.7% [3][4]. - The number of retail stores and robot stores increased to 363 and 2,190, respectively, indicating a robust expansion strategy [3]. Future Outlook - The report projects net profits for 2024-2026 to be 1.442 billion, 1.959 billion, and 2.342 billion HKD, with corresponding P/E ratios of 25X, 18X, and 15X [4][5]. - The introduction of new IPs and the launch of the game "Dream Home" are expected to drive additional revenue growth [4].