Core Viewpoint - The market expectations for Pop Mart are significantly influenced by short-term high-frequency tracking data, leading to concerns about IP popularity and sustainable performance growth. However, Q4 performance data indicates strong resilience in both domestic and overseas markets, supported by the IP matrix after the peak sales of Labubu 3.0. The company’s recent share buyback reflects confidence in its growth prospects, and the valuation appears attractive amid current market divergences, maintaining a "Buy" rating. Dimension 1: Q4 Overseas Market Performance - Q4 overseas performance is expected to exceed market pessimism, particularly in North America, where TikTok sales are projected to decline by approximately 10% quarter-on-quarter. However, improved inventory levels in stores are anticipated to enhance offline revenue significantly compared to Q3, with overall channel sales expected to remain stable or improve. In Southeast Asia, sales declines in H2 are attributed to natural channel structure changes, with strong growth expected in all-channel sales due to increased store numbers. The second-hand market dynamics indicate that sufficient inventory is crucial for driving new IP growth, aligning with a long-term strategy of diversified IP development [1][2]. Dimension 2: Emergence of Diverse IPs - Q4 data shows successful diversification of domestic IPs, with Labubu's share on Douyin dropping to about 30%. New IPs like Xingxingren and Crybaby are rapidly growing, narrowing the gap with Labubu. In Southeast Asia, Labubu's sales share has fallen below 40% in top-selling products, with new IPs collectively accounting for over 50% in markets like Indonesia. The established channel layouts in domestic and Southeast Asian markets facilitate the transfer of popularity from leading IPs to emerging ones, with potential for new IP growth as offline presence improves [2]. Dimension 3: Improving Ecosystem and Content Layout Potential - The company's IP content strategy is entering a practical implementation phase, with animated shorts expected to reach fans effectively through low-cost, high-frequency methods. Future long-form films may enhance IP influence, moving towards a goal of IP group development. The content strategy is anticipated to become a new tool for breaking into wider markets, complementing existing strengths in products, store experiences, and social media. New business ventures in desserts and accessories are also noteworthy [2]. Profit Forecast and Valuation - The profit forecast remains unchanged, with adjusted net profits projected at 135 billion, 185 billion, and 237 billion for 2025-2027. The target price is set at 410 HKD, based on a 27x PE for 2026, reflecting the company's high barriers to entry and ongoing diversification in IP and business models, maintaining a "Buy" rating [3].

Investment Rating - The report maintains an investment rating of "Buy" with a target price of HKD 410.00 for the company [1]. Core Insights - Recent market expectations for the company have been influenced by short-term high-frequency tracking data, leading to concerns about IP popularity and sustainable performance growth. However, the company's Q4 domestic and overseas performance shows strong resilience, supported by its IP matrix after the sales peak of Labubu 3.0. The report identifies three potential discrepancies in market expectations: comprehensive judgment of high-frequency data, growth potential of new IPs, and the potential of content and IP ecosystem layout [1]. Summary by Sections Q4 Overseas Market Performance - The report anticipates that Q4 overseas performance, particularly in North America, will exceed market pessimism. Despite a projected 10% decline in Tik Tok sales in Q4, improved inventory levels in stores are expected to enhance offline sales significantly compared to Q3. In Southeast Asia, while some countries saw a year-on-year decline in sales, this is attributed to natural channel structure changes, with strong growth anticipated in overall channel sales [2][3]. New IP Growth Potential - The report highlights that the diversification of IPs in Q4 has been successful, with new IPs like Star People and Crybaby gaining traction, reducing the sales share of Labubu. In Southeast Asia, the sales share of Labubu has dropped below 40%, with new IPs collectively accounting for over 50% in some markets. The report suggests that the company's channel layout in domestic and Southeast Asian markets is robust, allowing for the transmission of popularity from established to emerging IPs [3][4]. Ecosystem Development and Content Layout - The company's IP content layout is entering a practical implementation phase, with plans for animated shorts and potential feature films to enhance IP influence. The report draws parallels with the success of Sanrio's Hello Kitty in leveraging content to boost brand recognition and sales. The content strategy is expected to become a new tool for breaking into broader markets, complementing existing strengths in product offerings and fan engagement [4][5]. Profit Forecast and Valuation - The report maintains profit forecasts, projecting adjusted net profits of RMB 135 billion, 185 billion, and 237 billion for 2025-2027. The target price is based on a PE ratio of 27x for 2026, reflecting the company's high barriers to entry and ongoing diversification of IP and business models [5].

Investment Rating - The report maintains a positive investment outlook for the industry, emphasizing the continued value of IP group and global strategies, with expectations for revenue growth driven by IP incubation and operations [9]. Core Insights - Recently, the company celebrated its 15th anniversary with various activities, including a themed exhibition at the Import Expo and the launch of a special blind box series [3][6]. - The company is advancing its global expansion, opening its first store in Qatar in October and in Canada and Denmark in November, while also making its debut at the Macy's Thanksgiving Parade in the U.S. [3][6]. - The company has signed new IPs "1001MOONS" and "SUPERTUTU," and is launching several new products themed around Christmas and winter [3][6]. - The report highlights the company's strong IP incubation and operational capabilities, which are expected to drive revenue growth and improve profit structure due to higher overseas margins [9]. Summary by Sections Event Description - The company has launched a series of activities to celebrate its 15th anniversary, including a themed exhibition and a special blind box series [3][6]. - It is accelerating its global store openings, with significant events such as the participation in the Macy's Thanksgiving Parade [3][6]. IP Incubation and Operations - The company has signed new IPs and launched products that incorporate interactive elements, enhancing customer engagement [9]. - Collaborations with various partners for themed events and exhibitions are ongoing, with a focus on both domestic and international markets [9]. Global Expansion - As of early December, the company has approximately 165 overseas stores, with significant growth in the Americas and Europe [9]. - New store openings in Qatar, Canada, and Denmark mark the company's continued commitment to global expansion [9]. Group Strategy - The company is diversifying its business into film adaptations and other multimedia projects, aiming to establish itself as a comprehensive global IP operator [9]. - The report emphasizes the ongoing value of the company's group and global strategies, with a focus on replicable IP incubation and operations [9].