Core Viewpoint - The success of Pop Mart is attributed to its platform capabilities rather than a single IP, with emerging IPs like Twinkle Twinkle and Crybaby expected to significantly contribute to revenue in the coming years [1][3][4]. Summary by Sections Platform Value - Morgan Stanley emphasizes that the market underestimates Pop Mart's platform value and its IP incubation capabilities, which are seen as the core long-term investment value [3][6]. - The focus on a single IP's ceiling has led investors to overlook the company's broader platform capabilities [3][6]. Emerging IP Growth Potential - Twinkle Twinkle has shown strong market demand, with products selling out quickly at the Beijing Toy Expo, indicating its potential as a major revenue contributor from 2025 onwards [4]. - Crybaby's lifestyle product line, with an average price exceeding 250 RMB, demonstrates significant sales growth potential, despite supply constraints on plush toys [4]. Globalization and IP Diversification - Pop Mart is expanding its IP diversity through global operations, with existing IPs primarily from Greater China, while also tapping into artists from Thailand and the U.S. [5]. - The company aims to leverage local markets to incubate local artists and their creations as international market scales grow [5]. Core Investment Value - The intrinsic value of Pop Mart lies in its platform capabilities, which enable the success of its IPs, a factor that is often overlooked by the market [6]. - The report suggests a reasonable valuation based on a projected 46 times price-to-earnings ratio for 2025, indicating a PEG ratio of approximately 1.4 for a high-growth consumer company with global expansion potential [6].

Core Insights - Morgan Stanley analysts emphasize that Pop Mart's platform value is underestimated by the market, focusing too much on individual IP ceilings rather than the company's core long-term investment value in platform incubation [1][4]. Group 1: IP Growth Potential - The Twinkle Twinkle IP showcased strong market demand at the Beijing Toy Expo, with products selling out quickly, indicating its potential as a significant revenue contributor from 2025 onwards [2]. - Crybaby's lifestyle product line, with an average price exceeding 250 RMB, demonstrates substantial sales growth potential, although plush toy demand is currently limited by supply constraints [2]. Group 2: Global Expansion and IP Diversification - Pop Mart has four regional sales segments, primarily sourcing its IP from Greater China, with exceptions like Crybaby from Thailand and Peach Riot from the U.S. The company has significant potential to tap into artist resources in the U.S., Europe, Japan, and Southeast Asia [3]. - The report notes that each new IP requires a sufficiently large local market to generate initial momentum, making the focus on Greater China a natural choice for early IP development [3]. Group 3: Platform Capability as Core Investment Value - Analysts argue that the true investment value lies in Pop Mart's platform capabilities rather than just the success of individual IPs, which is often misjudged by investors [4]. - Data shows that Labubu accounted for only 6% of group sales two years ago, while now it is globally recognized, with Crybaby and Twinkle Twinkle also gaining strong market attention [4]. - The implied PEG ratio of approximately 1.4 for the years 2025-2027 is considered reasonable for a high-growth consumer company with global expansion potential [4].