Summary of Pop Mart (9992.HK) Conference Call Company Overview - **Company**: Pop Mart International Group Ltd - **Industry**: Pop toy industry - **Market Cap**: HK$361,948 million (US$46,316 million) [6] Key Points 1. IP-Centric Diversification Strategy - Pop Mart's strategy focuses on diversifying its intellectual property (IP) portfolio to mitigate cyclical risks and stimulate new demand. The recent collaboration, Skullpanda x My Little Pony, has shown significant interest, particularly on social media platforms like Instagram [1][3]. 2. Growth in APP Engagement - There has been a notable increase in mobile app downloads and active users, particularly in China and the US, attributed to new product releases. This trend is expected to continue during the upcoming Chinese New Year Golden Week [2][10]. 3. Emerging IPs Beyond LABUBU - Other IPs such as SKULLPANDA, TWINKLE TWINKLE, and CRYBABY are becoming significant growth drivers, with over 400 million units sold across all IPs in 2025. The interest in these non-LABUBU IPs in international markets may be underestimated [3][4]. 4. Overseas Market Potential - The sustainability of Pop Mart's growth is debated, particularly regarding the US market. The company is focusing on localized operations and collaborations to enhance its global presence. The total addressable market (TAM) for overseas markets is substantial, and improvements in organizational structure and supply chain are expected to drive expansion [4][22]. 5. Financial Performance - **Earnings Summary**: - 2023: Net Profit of RMB 1,082 million, EPS of RMB 0.807 - 2024: Net Profit of RMB 3,125 million, EPS of RMB 2.346 - 2025E: Net Profit of RMB 13,549 million, EPS of RMB 10.158 - 2026E: Net Profit of RMB 18,357 million, EPS of RMB 13.763 - 2027E: Net Profit of RMB 23,163 million, EPS of RMB 17.366 [5][8]. 6. Investment Recommendation - Pop Mart is rated as a "Buy" with a target price of HK$415, representing a potential upside of 53.8%. The expected total return is 55.5%, with a dividend yield of 1.7% [6][24]. 7. Risks - Key risks include rising competition in the pop toy market, potential disappointments in global expansion, challenges in IP commercialization, and regulatory changes. Despite a high-risk rating, qualitative factors such as execution capability support the investment thesis [25][26]. 8. Market Position - Pop Mart is recognized as the largest pop toy company in China, with a growing global footprint. The company aims to capture the emerging trend of "spiritual consumption" among younger consumers, particularly Gen Z, through its diverse IP characters and marketing strategies [22][23]. 9. Valuation Metrics - The company trades at a premium compared to global peers due to its rapid growth driven by overseas expansion. The valuation is supported by a strong growth profile and execution capabilities [24]. 10. Future Outlook - The company is expected to continue its growth trajectory through innovative product offerings and effective IP management, with significant revenue growth projected for the coming years [1][4][23].

Core Viewpoint - QuantaSing Group Limited is undergoing a strategic transformation from a traffic-driven to a product-driven business model, with a focus on expanding its pop toy business, which has shown promising revenue contributions following the acquisition of Letsvan [4][6][16]. Financial Performance - Revenues for the fourth quarter of FY 2025 were RMB617.8 million (US$86.2 million), an increase of 8.3% from the previous quarter but a decrease of 38.2% year-over-year [6][7]. - Net income for the fourth quarter was RMB108.0 million (US$15.1 million), compared to RMB196.6 million in the same quarter of FY 2024 [14][23]. - Adjusted net income for the fourth quarter was RMB111.2 million (US$15.5 million), down from RMB193.6 million in the fourth quarter of FY 2024 [14][23]. Business Segments - The pop toy business generated RMB65.8 million (US$9.2 million) in revenue during the fourth quarter, marking its first revenue recognition post-acquisition of Letsvan [6][10]. - Revenues from established businesses declined significantly, with online learning services contributing RMB456.9 million (US$63.8 million) in the fourth quarter, down from RMB906.7 million in the same quarter of FY 2024 [10][16]. Cost Structure - Cost of revenues increased to RMB150.2 million (US$21.0 million) in the fourth quarter, primarily due to costs associated with the pop toy business [8]. - Sales and marketing expenses decreased by 49.3% to RMB294.1 million (US$41.0 million) in the fourth quarter, reflecting the shift to a product-driven model [9][18]. - Research and development expenses remained stable at RMB21.2 million (US$3.0 million) [10][19]. Future Outlook - The company expects revenues from the pop toy business to range between RMB100.0 million to RMB110.0 million for the first quarter of FY 2026 and RMB750.0 million to RMB800.0 million for FY 2026 [27]. - QuantaSing is also in the process of acquiring remaining equity interests in Letsvan to further consolidate its position in the pop toy market [28]. Shareholder Value - The company has initiated share repurchase programs, with US$20.0 million allocated for repurchases in both 2024 and 2025 [31][33].

Core Viewpoint - QuantaSing Group Limited is taking steps to acquire all remaining equity interests in Shenzhen Yiqi Culture Co., Ltd. (Letsvan) through a combination of cash and stock consideration, aiming to enhance its competitive advantages in the pop toy segment and consumer sectors [1][4]. Group 1: Acquisition Details - The company has previously invested in Letsvan, which focuses on IP incubation, copyright commercialization, and cultural products, and has gained control to consolidate its results into QuantaSing's financial statements [2]. - The acquisition will involve issuing 18,219,330 Class A ordinary shares to Mr. Huiyu Zhan, the founder of Letsvan, as part of the consideration for his remaining interests [3]. - Mr. Zhan will be appointed to QuantaSing's board of directors to facilitate the integration of Letsvan into the company's strategies [3]. Group 2: Strategic Implications - The acquisition is expected to create synergies by integrating resources from both companies, enhancing QuantaSing's competitive positioning in the pop toy market and overall consumer sectors [4]. - QuantaSing aims to strategically diversify its portfolio while maintaining financial discipline, particularly in the pop toys sector [7].

Core Viewpoint - QuantaSing Group Limited is undergoing a strategic transformation towards product-driven business models, highlighted by the acquisition of a 61% stake in Shenzhen Yiqi Culture Co., Ltd. (Letsvan), aiming to expand into the pop toys market with strong growth potential [3][16][30]. Business and Financial Highlights for the Third Quarter of FY 2025 - The company reported revenues of RMB570.7 million (US$78.6 million) for the third quarter of FY 2025, a decrease of 39.6% year-over-year from RMB945.6 million in the third quarter of FY 2024 [4][5]. - Revenue from individual online learning services fell by 43.6% year-over-year to RMB467.2 million (US$64.4 million) [4]. - The company experienced a net income of RMB41.1 million (US$5.7 million), a decrease of 67.5% from the previous quarter but an increase of 181.2% from the same quarter last year [5][12]. Cost and Expense Management - Cost of revenues decreased by 33.8% to RMB96.6 million (US$13.3 million) due to reduced labor outsourcing and procurement costs [6]. - Sales and marketing expenses were reduced by 45.8% to RMB395.2 million (US$54.5 million), primarily due to lower marketing and promotion expenses [7]. - Research and development expenses decreased by 46.2% to RMB20.9 million (US$2.9 million) [8]. - General and administrative expenses were down 31.2% to RMB25.0 million (US$3.5 million) [9]. Acquisition and Strategic Initiatives - The acquisition of Letsvan for RMB235.0 million (US$32.4 million) is a significant step in QuantaSing's strategy to enter the pop toys market [3][16]. - Letsvan operates established IPs and aims to enhance its market presence through collaborations and retail expansions [17][18]. - The company plans to leverage its strong cash position to support both existing operations and new strategic initiatives in the pop toys sector [3][5]. User Growth and Market Position - Total registered users increased by 19.9% to approximately 145.0 million as of March 31, 2025, compared to 121.0 million a year earlier [5]. - The company is focusing on building a global presence in the pop toys market, which is seen as resilient and aligned with its brand-first philosophy [3][30].

Core Viewpoint - QuantaSing Group Limited is set to release its unaudited financial results for the quarter ending March 31, 2025, on June 6, 2025, before the U.S. market opens [1] Group 1: Financial Results Announcement - The earnings conference call will take place at 07:00 A.M. Eastern Time on June 6, 2025, to discuss the financial results [2] - Listeners can access the call through various international and toll-free numbers, with a conference ID for identification [2] - A replay of the call will be available until June 13, 2025, along with a live and archived webcast on the company's investor relations website [2] Group 2: Company Overview - QuantaSing is a leading lifestyle solution provider focused on empowering adults to live better and longer through engaging and affordable services and products [3] - The company has expanded into the pop toys sector and is strategically diversifying its portfolio while maintaining financial discipline [3]