Core Viewpoint - The company is experiencing strong performance in its new IP product line, with popular products frequently sold out due to supply constraints rather than weak demand. The global IP market presents significant growth opportunities, with the company expected to achieve substantial revenue growth by 2025 [1][2][4]. Group 1: Product Performance - The new IP product line, including Crybaby and Twinkle Twinkle, is performing well, indicating a supply bottleneck rather than a lack of demand [6][8]. - Popular products such as Twinkle Twinkle's "Bee Your Honey" figurine (priced at 199 RMB) and various Crybaby products (priced between 79-199 RMB) are experiencing stock shortages [7]. Group 2: Global Expansion and Brand Collaborations - The company is actively expanding its global presence and engaging in cross-brand collaborations, such as partnerships with Godiva and Chopard [9]. - New stores have opened in key cities like Berlin and Melbourne, indicating strong consumer interest in the company's IP and products [9]. Group 3: Financial Projections - The company is projected to achieve revenues of 31.046 billion RMB in 2025, representing a 138% year-on-year growth, and 42.994 billion RMB in 2026, with a 38% growth [10]. - Adjusted net profit is expected to reach 9.821 billion RMB in 2025, a 205% increase, and 13.965 billion RMB in 2026, a 42% increase [11]. Group 4: Market Potential - The global IP market is estimated to be worth approximately 800 billion USD, with the company's market share currently at only 2.3%, indicating substantial growth potential [14]. - The company aims to evolve into a combination of Bandai Namco, LEGO, and Disney, suggesting that its growth story is still in the early stages [14]. Group 5: Valuation and Investment Opportunity - The current stock price of 246 HKD offers over 48% upside potential to the target price of 365 HKD, based on a projected P/E ratio of 46 times for 2025 [16][19]. - The company’s strong IP product flywheel effect and efficient direct sales model are seen as key to successful global expansion [16].

Core Viewpoint - Morgan Stanley suggests that the recent stock price pullback of Pop Mart presents a valuable buying opportunity, emphasizing the company's strong performance in new IP product lines and its significant growth potential in the global IP market [1][11]. Group 1: Product Performance - Despite investor concerns about a slowdown after the Labubu craze, Pop Mart continues to launch popular new products, indicating strong demand rather than supply issues [3]. - New IPs like Crybaby and Twinkle Twinkle are performing well, alongside traditional favorites such as Molly and Skullpanda, with many products frequently sold out [3]. - The supply-demand imbalance reflects the attractiveness of the company's products, not a lack of demand [3]. Group 2: Brand Collaborations and Global Expansion - Recent innovative collaborations include partnerships with renowned brands like Godiva and Chopard, as well as the opening of new stores in key cities like Berlin and Melbourne [4]. - These initiatives demonstrate the global appeal of Pop Mart's IP and products, positioning the company to capture consumer demand across various markets [4]. Group 3: Financial Performance and Valuation - Morgan Stanley forecasts Pop Mart's revenue to reach RMB 31.046 billion in 2025, a 138% increase year-on-year, and RMB 42.994 billion in 2026, a 38% increase [5]. - The gross margin is expected to improve from 66.8% in 2024 to 71.5% in 2025, with operating profit margin rising from 31.5% to 42.0% in the same period [6]. - The estimated P/E ratio for 2025 is 31x, dropping to 22x in 2026, highlighting Pop Mart's valuation advantage compared to other high-growth stocks [7]. Group 4: Market Potential - The global IP product market is estimated to be around USD 800 billion, with Pop Mart's current market share at only 2.3%, indicating substantial growth potential [9]. - Pop Mart aims to evolve into a combination of Bandai Namco, LEGO, and Disney, suggesting that its growth story is still in the early stages [10]. Group 5: Investment Recommendation - Morgan Stanley maintains an "Overweight" rating with a target price of HKD 365, indicating over 48% upside potential from the current stock price of HKD 246 [1][14]. - The firm has outlined three scenarios for target prices based on different market conditions, reinforcing the investment opportunity presented by the current pullback [11].