Core Viewpoint - The report from Credit Lyonnais indicates that Pop Mart (09992) is experiencing strong global demand and improving supply chain conditions, supporting its growth trajectory [1] Group 1: Sales Forecast - The company is projected to achieve a sales increase of 172% by 2025, reaching 35.4 billion RMB [1] - Sales from China and overseas are expected to each account for 50% of total sales [1] Group 2: Profitability Metrics - Forecasted gross margin and core operating profit margin are expected to rise to 71.4% and 44.6%, respectively [1] Group 3: Adjusted Financial Projections - Sales and adjusted net profit forecasts for 2025 to 2027 have been raised by 14%, 12%, 12% and 23%, 20%, 20% respectively [1] - The target price for Pop Mart has been increased from 318 HKD to 368 HKD, maintaining an "outperform" rating [1]

Group 1 - The core viewpoint of the report indicates that Pop Mart's global expansion momentum remains strong, supported by robust global demand and an improving supply chain [1] - The company is projected to achieve a sales growth of 172% by 2025, reaching 35.4 billion yuan, with sales from China and overseas expected to each account for 50% [1] - The forecast for gross margin and core operating profit margin is expected to improve to 71.4% and 44.6%, respectively [1] Group 2 - The sales and adjusted net profit forecasts for Pop Mart for 2025 to 2027 have been raised by 14%, 12%, 12% and 23%, 20%, 20% respectively [1] - The target price for the company has been increased from 318 HKD to 368 HKD, while maintaining an "outperform" rating [1]

Core Insights - The rise of emotional consumption and the "millet economy" are key drivers, with the Gen Z demographic leading to over 500 million participants in the pan-second dimension market by 2024, and a market size of approximately 600 billion yuan, including a millet economy worth over 150 billion yuan [1] - The trend in the collectible toy market is expected to reach 110 billion yuan by 2027, with a competitive landscape characterized by "one strong and many strong" players, where Pop Mart leads the industry, while foreign brands like Lego and Bandai hold significant market shares [1] Market Segmentation - In the toy segment, blind boxes, building toys, and card games are leading the growth of the collectible toy industry, with blind boxes driven by unknown stimuli and IP value, targeting a consumer base that is 75% female and primarily Gen Z, with a projected market size of 58 billion yuan by 2025 [1][2] - Building toys are designed for all age groups, activating both parent-child and adult scenarios, with a market size expected to reach 64 billion yuan by 2028, led by domestic brand Blokus [1][2] - Card games focus on a younger demographic (ages 8-15) and are dependent on parental spending, with a projected market size of 44.6 billion yuan by 2029, where Card Game occupies a leading position [1][2] Competitive Landscape - Leading companies such as Pop Mart, Blokus, and Card Game are driving industry development through differentiated competition, with Pop Mart focusing on IP incubation and blind box mechanisms, Blokus targeting children's educational scenarios, and Card Game emphasizing children's social interaction [3] - Pop Mart maintains strong channel control primarily through direct sales, while Blokus is shifting from online direct sales to a dealer-centric model, and Card Game is also focusing on a dealer model but is experiencing channel contraction [3] - Financially, Pop Mart is enhancing its brand premium with a projected gross margin of 66.8% and an adjusted net profit margin of 26.1% in 2024, while Blokus has improved its inventory turnover days from 137 to 46, achieving a turnaround in adjusted net profit margin from -107.9% to 26.1% [3] International Insights - Successful overseas companies demonstrate that a multi-faceted business ecosystem centered around IP is crucial, with Disney leveraging its IP across films, parks, and merchandise, Bandai focusing on vertical IP and high-precision models, and Sanrio expanding its "cute economy" through light asset character licensing [4]

Core Viewpoint - The recent launch of new products by Pop Mart has led to a significant surge in demand, resulting in extraordinary price inflation in the secondary market, with some items being resold at three times their original price or more [1][11][16]. Product Launch and Market Response - On August 21, Pop Mart launched several new products, including the "Starry Dream Meteorological Bureau Series" plush blind boxes priced at 79 yuan each and 474 yuan per box, which sold out within seconds across various platforms due to overwhelming traffic [3][5]. - Consumers reported difficulties in purchasing, with many resorting to setting alarms to secure their orders, highlighting the competitive nature of acquiring these popular items [5][16]. Secondary Market Pricing - The "Starry Dream Meteorological Bureau Series" blind boxes are being resold for approximately 1350 yuan per box, representing a nearly threefold increase in price, while individual items average around 150 yuan, also showing significant markup [11][16]. - The "MOKOKO Summer Series" plush toys, originally priced at 199 yuan, are being sold for around 800 yuan in the secondary market, indicating a strong speculative interest [13][16]. Company Performance and Growth Potential - Pop Mart's adjusted net profit for the first half of 2025 reached 4.71 billion yuan, a staggering year-on-year increase of 362.8%, with the "THE MONSTERS" series generating 4.81 billion yuan in revenue, accounting for 34.7% of total revenue [20][22]. - The "Starry Dream" IP has emerged as one of the fastest-growing new IPs, generating 389 million yuan in revenue in the first half of the year, showcasing its potential as a new growth driver for the company [20][23]. International Market Expansion - Pop Mart's international business has shown remarkable growth, with revenue in the Americas increasing by 1142.3% and in Europe and other regions by 729.2% [22]. - The company aims for a revenue target of 20 billion yuan for the year, with optimistic projections suggesting it could reach 30 billion yuan easily [22]. Production Capacity and Supply Chain - The production capacity for plush toys has increased significantly, with a monthly output now ten times that of the same period last year, reaching approximately 30 million units [22]. - The supply chain management team has indicated that production levels will continue to rise, addressing concerns about stock availability for future product launches [22].

Core Insights - Temasek led a funding round for TOP TOY, resulting in a post-investment valuation of approximately HKD 10 billion [6] - MINISO reported a revenue of CNY 9.393 billion for the first half of 2025, representing a year-on-year growth of 21.1% [1][2] - The company achieved a net profit of CNY 0.692 billion, with an adjusted operating profit of CNY 0.852 billion, reflecting growth rates of 10.6% and 8.5% respectively [1] - MINISO's stock saw a significant increase post-earnings report, with a 6.38% rise in US markets and a 20.58% surge in Hong Kong markets [1] Revenue Breakdown - MINISO's revenue from its brand reached CNY 8.649 billion, up 18.1% year-on-year, with domestic revenue at CNY 5.115 billion (11.4% growth) and overseas revenue at CNY 3.534 billion (29.4% growth) [2] - TOP TOY brand generated CNY 0.742 billion in revenue, marking a 73% increase [2][5] Same-Store Sales Performance - MINISO reported its first positive same-store sales growth in four quarters, with the brand's same-store sales growth stabilizing and TOP TOY showing improvement [2][3] - The company anticipates continued positive same-store sales growth in the domestic market for the remainder of the year [2] Store Expansion Strategy - As of June 30, 2025, MINISO operated a total of 7,612 stores globally, with 4,305 in mainland China and 3,307 overseas [3] - The company is diversifying its store formats, including MINISO LAND, flagship stores, and pop-up stores, to cater to different market segments [3] IP Strategy - MINISO is accelerating its own IP strategy, with founder Ye Guofu emphasizing a dual approach of "international IP + proprietary IP" [6] - The company has signed nine toy artists for its proprietary IP development and has made strategic investments in IP companies to enhance its portfolio [6] - The "Nommi糯米儿一口甜心" series, developed from HiTOY IP, has already surpassed CNY 0.1 billion in sales, showcasing the potential of its proprietary IP [6]

Investment Rating - The report rates the industry as "Outperform" [6] Core Insights - Emotional consumption and the rise of the "Guzi economy" are driving the growth of the trendy toy market, with the Z generation leading a new landscape. By 2024, the population of the pan-2D community in China is expected to exceed 500 million, with a market size of approximately 600 billion yuan, and the Guzi economy alone surpassing 150 billion yuan [1][24] - The trendy toy industry is characterized by a "one strong, many strong" pattern, with Pop Mart leading the industry, while foreign brands like LEGO and Bandai hold a certain market share. Domestic brands such as Blok and Card Game are also experiencing rapid growth, with IP operation and overseas market expansion being key future directions for the industry [1][4] Summary by Sections 1. Emotional Consumption and the Rise of Trendy Toys - Emotional consumption has emerged as a new economic driver, with trendy toys becoming a significant social label for consumers. These toys provide emotional value, helping to alleviate anxiety and affirm consumer identity [22][23] - The Guzi economy, which focuses on IP-derived peripheral products, is deeply integrated with 2D culture, creating a vibrant narrative and emotional connection for consumers [23][24] - The market for trendy toys is expected to grow significantly, with the pan-entertainment toy market projected to exceed 1 trillion yuan by 2029, and the trendy toy market reaching 110 billion yuan by 2027 [1][36] 2. Growth Drivers: Blind Boxes, Building Toys, and Card Games - Blind boxes are driven by the thrill of the unknown, with a market size expected to reach 580 billion yuan by 2025. The consumer base is predominantly female, with 75% of buyers being women, and the Z generation pushing for a shift towards mid-to-high-end products [2][67] - Building toys are designed for all age groups, with a market size projected to reach 640 billion yuan by 2028. Local brand Blok leads this segment, focusing on educational aspects [2][3] - The card game market, driven by rarity and low pricing, is expected to reach 446 billion yuan by 2029, with Card Game holding a dominant position [2][3] 3. Competitive Landscape and Key Players - Leading companies such as Pop Mart, Blok, and Card Game are driving industry development through differentiated competition. Pop Mart focuses on IP incubation and blind box mechanisms, while Blok emphasizes educational scenarios through building blocks [4][5] - The market is becoming increasingly concentrated, with Pop Mart holding a 28% market share in the blind box segment. The CR5 of the blind box market is expected to rise from 38% in 2020 to 50% in 2024 [76] 4. International Expansion and Lessons from Overseas - The report highlights the importance of IP-driven multi-business ecosystems, as seen in successful overseas companies like Disney and Bandai. These companies leverage their IP across various platforms, creating a robust business model [4][56] - Chinese toy companies are actively expanding into international markets, with significant growth in exports to the US and Central Asia. This diversification is crucial for mitigating risks associated with reliance on single markets [56][57]

Core Viewpoint - The inclusion of Pop Mart International Group in the Hang Seng Index reflects strong market recognition of its comprehensive strength, marking its first entry into the index alongside China Telecom and JD Logistics [3][12]. Group 1: Hang Seng Index Changes - The number of constituent stocks in the Hang Seng Index will increase from 85 to 88, effective September 8, 2025 [5][6]. - New additions include China Telecom Co., Ltd. - H shares, JD Logistics Co., Ltd., and Pop Mart International Group [7]. Group 2: Pop Mart's Performance - Pop Mart reported a revenue of 13.88 billion yuan for the first half of 2025, a year-on-year increase of 204.4%, and an adjusted net profit of 4.71 billion yuan, up 362.8% [13]. - The company’s stock price increased by over 258% this year, with a market capitalization exceeding 430 billion HKD as of August 22 [13]. - Pop Mart's IP LABUBU has gained global recognition, contributing to a total revenue exceeding 1 billion yuan from its major IPs, indicating a strong market presence [12][13]. Group 3: Market Trends and Future Outlook - The Hang Seng Index has shown resilience, with a cumulative increase of over 20% in the first half of 2025 [12]. - Pop Mart aims for an annual revenue of no less than 30 billion yuan, leveraging its IP-driven business model to expand globally [13].

Core Insights - Miniso's subsidiary TOP TOY has secured strategic financing led by Temasek, achieving a post-investment valuation of approximately HKD 10 billion, indicating strong market recognition for its position in the global toy market [1][4][5] - TOP TOY's revenue for Q2 reached RMB 400 million, reflecting a year-on-year increase of 87%, and the brand is projected to become a new growth driver for Miniso [4][5] - The rapid expansion of TOP TOY, with 293 stores currently and plans for over 1,000 stores globally in the next five years, highlights the brand's aggressive growth strategy [2][4] Company Overview - TOP TOY, launched in late 2020, operates independently under Miniso and focuses on trendy toys, having over 10,000 SKUs across various categories [2][4] - The brand's global strategy includes opening stores in countries like Thailand, Indonesia, and Malaysia, with a goal of achieving over 50% of sales from international markets [4][5] - Miniso is evaluating the potential for a separate IPO for TOP TOY, which could further enhance its market presence [5][8] Market Context - The toy market, particularly the trendy toy segment, is experiencing significant growth, with competitors like Pop Mart achieving record performance and a market capitalization exceeding HKD 420 billion [1][9] - The competitive landscape is evolving, with various companies in the toy sector preparing for IPOs, indicating a robust interest in the market [10][11] - The rise of interest in IP-driven products among younger consumers is driving the growth of the toy industry, positioning companies that can effectively engage this demographic for future success [11]

Investment Rating - The report maintains a "Buy" rating for Pop Mart International Group Limited [2][11] Core Views - The company demonstrated rapid growth in H1 2025, with revenue reaching 138.8 billion RMB, a year-on-year increase of 204.5%, and net profit attributable to shareholders at 45.7 billion RMB, up 396.5% [3][10] - The domestic market continues to show strong growth potential, with H1 2025 domestic revenue at 82.8 billion RMB, a 135.2% increase year-on-year [4] - The overseas market also experienced explosive growth, with H1 2025 overseas revenue at 55.9 billion RMB, a staggering 314% increase year-on-year [5] - The company's IP matrix is expanding, with significant revenue contributions from various IPs, particularly THE MONSTERS, which generated 48.1 billion RMB, a 668% increase [6] - The company is expected to maintain strong growth momentum, with projected net profits of 110.7 billion RMB, 155.4 billion RMB, and 203.2 billion RMB for 2025, 2026, and 2027 respectively [11] Domestic Market Summary - Domestic revenue for H1 2025 reached 82.8 billion RMB, with offline sales at 50.8 billion RMB (up 117.1%) and online sales at 29.4 billion RMB (up 212.2%) [4] - The company opened 12 new retail stores, bringing the total to 443, with average store efficiency reaching a historical high [4] - Membership numbers increased by 28% to 59.12 million, indicating a growing consumer base [4] Overseas Market Summary - Overseas revenue for H1 2025 was 55.9 billion RMB, with significant growth in the Americas (1142% increase) and Europe (729% increase) [5] - The company opened 30 new stores in the Asia-Pacific region and 31 in the Americas, indicating a strong expansion strategy [5] - The report highlights that the overseas market still has substantial untapped potential, particularly in high-consumption areas like Europe and the Americas [5] Product Perspective Summary - The IP matrix is showing comprehensive growth, with THE MONSTERS leading at 48.1 billion RMB, followed by CRYBABY at 12.2 billion RMB [6] - Plush toys have become the largest product category, with revenues of 61.4 billion RMB, reflecting a 1276% increase [6] - The company is enhancing its supply chain capabilities, which is expected to support future growth [6] Financial Performance Summary - The gross margin for H1 2025 was 70.3%, a 6.3 percentage point increase year-on-year, with a net profit margin of 33.0%, the highest in history [10] - The report forecasts continued improvement in profitability due to strong sales and the increasing share of high-margin overseas business [10] - The company is expected to launch new products and expand into new markets, which will further drive revenue growth [10]

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company achieved a revenue of 138.8 billion RMB in 1H25, representing a year-on-year increase of 204.4%, with a gross profit of 97.6 billion RMB and a gross margin of 70.3%, up 6.3 percentage points year-on-year [1] - The company expects to generate at least 300 billion RMB in revenue for the year 2025, with an adjusted net profit margin projected at around 35% [1] Revenue Breakdown - In 1H25, revenue from China was 82.8 billion RMB, a year-on-year increase of 135.2%, accounting for 59.7% of total revenue [2] - The Asia-Pacific region generated 28.5 billion RMB, up 257.8% year-on-year [2] - The Americas saw revenue of 22.7 billion RMB, a staggering increase of 1142.3% year-on-year [2] - Europe and other regions contributed 4.8 billion RMB, reflecting a year-on-year growth of 729.2% [2] IP and Product Categories - In 1H25, five IPs generated over 1 billion RMB in revenue, with THE MONSTERS accounting for 34.7% of total revenue [3] - Plush toys have become the largest product category, increasing from less than 10% in 24H1 to 44% [3] - The company has improved operational efficiency, with a gross margin increase attributed to higher overseas pricing and reduced promotional activities [3] Financial Forecasts - The adjusted net profit forecasts for 2025-2027 have been raised to 111 billion RMB, 170 billion RMB, and 212 billion RMB, respectively, reflecting increases of 70%, 77%, and 72% from previous estimates [4] - Revenue projections for 2025 are set at 32.5 billion RMB, with a growth rate of 149% [5] Valuation Metrics - The adjusted P/E ratio is projected to decrease from 329 in 2023 to 18 by 2027, indicating a significant improvement in valuation as earnings grow [5]