Company Performance - The company reported a 245%-250% year-on-year revenue growth for Q3 2025, with further acceleration in growth compared to the previous quarter. Revenue from the Chinese market grew by 185%-190%, while overseas revenue surged by 365%-370%, exceeding both internal and market expectations due to new product launches and accelerated growth in the European and American markets, alongside a faster release of production capacity [1][2] Chinese Market Insights - In the Chinese market, same-store performance exceeded expectations, with offline channel revenue increasing by 130%-135%. The company has been optimizing store locations and retail layouts throughout the year, enhancing the operational capabilities of its teams in Hong Kong, Macau, and Taiwan [1] - Online channel revenue saw a significant increase of 300%-305%, driven by capacity release and intensified efforts to combat scalping, leading to a notable improvement in the overall purchasing experience for fans. The higher profit margin from online sales is expected to further boost the company's profit margins in Q3 [1] Global Market Trends - The company's global IP popularity is on the rise, with revenue growth in the Asia-Pacific, Americas, and Europe regions recorded at 170%-175%, 1265%-1270%, and 735%-740% respectively. In Q3, the company opened 23 new stores overseas, including flagship locations in Berlin and New York [2] - The combination of celebrity influence, high-quality new products, and local operations has rapidly increased the popularity of LABUBU, attracting a growing fan base. Other brands like Xiao Ye and SP have also gained significant fan appreciation, evolving into globally recognized IPs [2] Brand Engagement and Product Strategy - The company is placing greater emphasis on the health of its IP and brand, with initiatives such as character meet-and-greets and anniversary tours to strengthen connections with fans and enhance the IP image. The company aims to balance supply release with real demand to mitigate negative effects from secondary market price fluctuations [2] - In anticipation of the Q4 holiday season, the company is launching a series of high-quality products, including Halloween-themed plush toys and collaborations with popular shows, while continuously optimizing store designs and establishing fan engagement systems [2] Profit Forecast and Valuation - Due to accelerated capacity release and expected growth during the overseas peak season, the company has raised its adjusted net profit forecasts for 2025 and 2026 by 20% and 21% to 13.2 billion and 17 billion respectively. The current stock price corresponds to 23x and 18x adjusted P/E for 2025 and 2026 [2] - The company maintains an outperform rating in the industry, with a target price of 370 HKD, reflecting a potential upside of 48% based on 35x and 27x adjusted P/E for 2025 and 2026 [2]

Core Viewpoint - TOP TOY International Group Limited, a subsidiary of Miniso Group, has officially submitted its listing application to the Hong Kong Stock Exchange, aiming to capitalize on the booming collectible toy market and potentially achieve a higher valuation upon successful listing [1][12]. Company Overview - TOP TOY was established in December 2020 and is recognized as the largest and fastest-growing collectible toy brand in China, with a projected GMV of 2.4 billion RMB for 2024 [1][4]. - The company has experienced significant revenue growth, with revenue increasing from 679 million RMB to 1.909 billion RMB over the past three years, and achieving 1.36 billion RMB in revenue in the first half of this year [4]. Revenue Sources - TOP TOY's revenue is heavily reliant on external IPs, with approximately 47% of its revenue in 2024 expected to come from popular licensed IPs such as Sanrio and Disney, generating around 889 million RMB [4]. - The company holds 17 proprietary IPs and 43 licensed IPs, but its own IPs contributed only 680,000 RMB to revenue last year, indicating a weak market influence [4]. Market Position and Strategy - As of June 30, 2023, TOP TOY operates 293 stores, supported by Miniso's extensive distribution network, which includes over 4,300 stores in mainland China [8][10]. - Miniso is not only the controlling shareholder of TOP TOY, holding 86.9% of its shares, but also its largest customer, contributing nearly 45.5% of TOP TOY's total revenue in the first half of this year [8][9]. Future Plans - The company plans to open 100 new stores domestically this year, aiming for a total of 380 to 400 stores by year-end, and has set a goal to expand internationally by opening 1,000 stores in 100 countries over the next five years [12]. - TOP TOY has prepared a reserve fund of 10 billion RMB to support its ongoing domestic and international expansion efforts [12].

Core Viewpoint - TOP TOY International Group Limited, a subsidiary of Miniso Group, has officially submitted its listing application to the Hong Kong Stock Exchange, aiming to capitalize on the booming collectible toy market [1]. Group 1: Company Overview - TOP TOY was established in December 2020 and is recognized as the largest and fastest-growing collectible toy brand in China, with a projected GMV of 2.4 billion RMB for 2024 [2]. - The company has experienced significant revenue growth, with revenue increasing from 679 million RMB to 1.909 billion RMB over the past three years, and achieving 1.36 billion RMB in revenue with a net profit of approximately 180 million RMB in the first half of this year, resulting in a net profit margin of about 13.2% [3]. Group 2: IP and Revenue Dependency - TOP TOY currently holds 17 proprietary IPs, 43 licensed IPs, and over 600 third-party IPs, but its revenue heavily relies on external IPs, with licensed IPs contributing approximately 889 million RMB, accounting for about 47% of total revenue in 2024 [4][5]. - The company's proprietary IPs generated only 6.8 million RMB in revenue last year, representing less than 1% of total revenue, indicating a weak market influence compared to competitors like Pop Mart, which generated 11.121 billion RMB from its proprietary IPs, constituting 85% of its total revenue [5]. Group 3: Sales Channels and Partnerships - Miniso Group is the largest customer of TOP TOY, accounting for 48.3% and 45.5% of the company's total revenue in the last year and the first half of this year, respectively, with sales to Miniso amounting to 923 million RMB and 619 million RMB [8]. - The company plans to leverage its partnership with Yonghui Supermarket, which has become Miniso's largest shareholder, to enhance its sales channels, particularly for its own products like building blocks and blind boxes [10]. Group 4: Expansion Plans - TOP TOY aims to open 100 new stores in China this year, targeting a total of 380 to 400 stores by year-end, and plans to expand internationally by covering 100 countries and opening 1,000 stores over the next five years [10]. - The company has prepared a reserve fund of 10 billion RMB to support its ongoing domestic and international expansion efforts [10].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2][6]. Core Views - The company achieved a revenue of 13.876 billion yuan in the first half of 2025, representing a year-on-year growth of 204.4% [6]. - Adjusted net profit reached 4.710 billion yuan, with a year-on-year increase of 362.8%, and an adjusted net profit margin of 33.94%, up by 11.6 percentage points [6]. - The company’s IP matrix continues to grow, with significant contributions from top IPs and a rapid increase in new IP cultivation [6]. Financial Performance - Revenue breakdown shows that the top IPs generated significant income, with "The monsters" contributing 4.81 billion yuan, "Molly" 1.36 billion yuan, and "Skullpanda" 1.22 billion yuan, among others [6]. - The plush category saw a staggering growth of 1276.2% to 6.139 billion yuan, becoming the highest revenue-generating category [6]. - The company’s gross margin improved to 70.3%, a year-on-year increase of 6.3 percentage points, driven by better cost control and a higher proportion of overseas high-margin business [6]. Revenue and Profit Forecast - The company forecasts total revenue of 30.05 billion yuan for 2025, with a year-on-year growth of 130% [7]. - Adjusted net profit is projected to reach 10.368 billion yuan in 2025, reflecting a growth of 205% [7]. - The adjusted PE ratios for 2025, 2026, and 2027 are estimated at 37.4x, 27.3x, and 22.4x respectively [7]. Market Expansion - The company reported a revenue of 8.28 billion yuan from the China region, a year-on-year increase of 135.2%, with significant growth in offline channels [6]. - Overseas revenue reached 5.59 billion yuan, marking a remarkable growth of 439.6%, with the Americas showing a particularly high growth rate of 1142.3% [6]. - The company plans to expand its overseas store count to 200 by the end of the year, with a focus on emerging markets such as the Middle East and South Asia [6].

Group 1 - The Hang Seng Index rose by 0.62% and the Hang Seng Tech Index increased by 1.96%, with retail and automotive sectors leading the gains [1] - Southbound funds recorded a net inflow of HKD 35.67 billion, indicating strong investor interest [1] - The Hong Kong consumer sector showed slight fluctuations during the midday session, with the Hong Kong Consumer ETF (513230) rising nearly 1%, driven by stocks like Great Wall Motors, Pop Mart, Geely, and Chow Tai Fook [1] Group 2 - CITIC Securities reported that the potential of second-tier IPs is rapidly increasing, with Pop Mart establishing a strong platform for trendy toys, driven by leading IPs [2] - In the UK market, the top three IPs by cumulative sales on TikTok Shops are Labubu (52%), Crybaby (26%), and SKULLPANDA (9%), while in the Philippines, the leading IPs are Xiaoye (46%) and Crybaby (40%) [2] - The Hong Kong Consumer ETF (513230) tracks the CSI Hong Kong Stock Connect Consumer Theme Index, encompassing major players in both new consumption and internet e-commerce sectors, including Pop Mart, Lao Pu Gold, and Mi Xue Group [2]

Core Viewpoint - The article emphasizes the significant impact of Pop Mart on the domestic IP industry, suggesting that the company has validated the potential for domestic IP enterprises to leverage strong supply chains and quality operations to access global markets [1] Group 1: Commercial Value of IP - The market has underestimated the commercial value of character-based IP and the long-term operational capabilities of companies [2] - The lifecycle of high-quality character-based IP is longer than the market perceives, with examples like MOLLY showing a revenue CAGR of 22% from 2019 to 2023 [2] - Successful IP can achieve high commercial value through a combination of mass appeal and artistic quality, as seen with projected revenues of 2.1 billion RMB for MOLLY and 3 billion RMB for LABUBU in 2024 [2] Group 2: Business Challenges and Resilience - From December 2020 to June 2022, the company experienced a decline in stock price due to systemic adjustments in growth stock valuations and deteriorating profit indicators [3] - The period from July to October 2022 saw the company’s performance under pressure, with the blind box trend becoming mainstream, leading to a significant underperformance compared to the Hong Kong stock market [3] - The company demonstrated strong organizational resilience and execution capabilities during this challenging phase, which laid the groundwork for accelerated internationalization post-2024 [3] Group 3: Recovery and Long-term Value Reassessment - From November 2022 to June 2023, the company’s EPS gradually recovered, with positive guidance for 2023, although the market attributed this mainly to macroeconomic factors [3] - Since July 2023, the company’s performance has shown signs of alpha, driven by organizational optimization and accelerated international expansion, particularly with LABUBU gaining unexpected popularity [3] - The rise of LABUBU is supported by trends in personalized consumption and social media influence, which have contributed to its revenue exceeding expectations [3] Group 4: Profit Forecast and Investment Rating - The company remains optimistic about LABUBU and its diverse IP matrix driving rapid revenue growth across all channels, with adjusted net profit forecasts for 2025-2027 raised to 10.03 billion, 14.49 billion, and 18.29 billion RMB respectively [4] - A valuation of 30 times PE for 2026 is suggested, corresponding to a market value of 434.6 billion RMB, indicating a potential 28% upside from the market value as of August 8, 2025 [4]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The report emphasizes the underestimated commercial value of character-based IP and the company's long-term operational capabilities, suggesting that the market has not fully recognized the potential of these IPs [8][9] - The company has demonstrated resilience and adaptability in its business model, particularly during challenging market conditions, and is now positioned for international expansion and value reassessment [9][17] - The report forecasts significant revenue growth driven by the success of key IPs like Labubu and Molly, with adjusted net profit estimates for 2025-2027 raised to 100.3 billion, 144.9 billion, and 182.9 billion RMB respectively [9][15] Summary by Sections 1. Character-based IP Commercial Value Exploration - The report discusses the commercial value and lifecycle of character-based IP, highlighting that its value is not strictly tied to content depth, and that successful IPs can achieve high audience engagement and longevity [21][22] - It notes that the lifecycle of quality character-based IPs is often longer than market expectations, with examples like Molly showing a compound annual growth rate (CAGR) of 22% from 2019 to 2023 [21][22] 2. Business Model Challenges and Company Resilience - The report outlines the company's stock price trajectory since its IPO, detailing phases of growth and decline, and emphasizes the company's strong organizational resilience during market downturns [16][17] - It identifies the challenges faced by character-based IP businesses, including demand fluctuations and the need for effective inventory management [9][17] 3. Internationalization and Long-term Value Reassessment - The report highlights the company's recovery and growth in domestic operations post-pandemic, as well as the emerging potential in international markets [9][17] - It points out that the recent success of Labubu as a global phenomenon has significantly contributed to the company's revenue and valuation recovery [9][17] 4. Profit Forecast and Investment Recommendations - The report provides detailed profit forecasts, projecting substantial revenue growth driven by the company's diverse IP portfolio and effective operational strategies [9][15] - It suggests that the company is well-positioned to leverage its IP matrix for sustained financial performance, with a target market capitalization reflecting a 28% upside potential based on projected earnings [9][15]

Summary of the Conference Call for Pop Mart Company Overview - **Company**: Pop Mart - **Industry**: Toy and Collectibles Key Points and Arguments Financial Performance - Adjusted net profit for the first half of the year is expected to be no less than 450 million RMB, with a profit margin of 33.5%, an increase of 5 percentage points compared to the second half of last year, indicating enhanced profitability and a solid fundamental outlook [2][4] - The company anticipates significant growth in 2026 driven by channel expansion in the US and Europe, new IP launches, and sustained growth of existing IPs [3] Market Expansion - The company is accelerating its overseas expansion, adding 5-6 new stores in the US in July, with active openings in the European market, indicating a strong strategic focus on global market penetration [2][5] - The domestic market has exceeded expectations, with significant increases in foot traffic and per-store revenue, suggesting a "re-recognition" phenomenon among consumers [2][30] IP Development - The Labubu IP has surpassed many well-known IPs globally, achieving an annual revenue of 10 billion RMB, placing it in the third tier of global IPs, although its future development path requires attention [2][32] - Classic products have shown extended sales cycles, indicating stable and lasting demand, which will provide a solid revenue base for the company [2][11] Supply Chain and Inventory Management - The company has adopted a strategy of bulk replenishment to stabilize market prices and meet consumer demand, reflecting strong demand and potentially increasing EPS [2][9] - Frequent replenishment has become a normalized operational rhythm, with a significant impact on domestic revenue growth expected in Q1 2025 due to replenishment activities [9] Challenges and Market Dynamics - The recent market performance has been relatively stable despite fluctuations in stock prices due to shifts in investment focus towards new consumption and AI applications [4] - The company is addressing the decline in scalper prices due to concentrated replenishment of Labubu versions, which has altered supply-demand dynamics [8] Future Growth Strategies - The upcoming mid-year performance meeting is highly anticipated for insights on store opening pace, category expansion, and new IP plans [6] - The company plans to increase its store count in the US from 40-50 to around 200, while also expanding in Europe [34][35] Regional Market Insights - The Southeast Asian market has been a strong performer, with significant revenue contributions and new store openings in Thailand and Indonesia [29] - The European market is viewed as strategically important, with ongoing expansion and a focus on artist collaborations and limited edition products [27][28] Consumer Demographics and Market Penetration - The domestic toy market still has considerable penetration potential, with estimates suggesting that 200 million people could be potential consumers of trendy toys [31] - The company has approximately 46 million registered members in China, indicating significant room for growth in market penetration [31] Long-term IP Management - The Labubu IP has crossed the threshold of 10 billion RMB in global peripheral revenue, indicating its potential for long-term operation and growth [32][33] - The company is confident in the long-term operational capabilities of its IPs, supported by successful category expansions and market adaptations [33] Additional Important Insights - The company is exploring diverse operational formats to enhance brand influence, including opening jewelry stores and establishing theme parks [22] - The search heat for Pop Mart's IPs in various countries indicates strong market interest, with notable performance in Thailand and the Philippines [20][19] This summary encapsulates the key insights from the conference call, highlighting Pop Mart's financial performance, market strategies, IP development, and future growth potential.

Core Viewpoint - The report from CICC indicates a significant increase in the global popularity of Pop Mart's IP, leading to an upward revision of the adjusted net profit forecast for 2025 and 2026 by 30% to 9.73 billion and 12.35 billion yuan respectively, with a corresponding increase in target price by 6.5% to 330 HKD, suggesting a 25% upside potential from the current price [1] Group 1 - The company expects a year-on-year profit growth of over 350% for the first half of 2025, with revenue expected to increase by no less than 200% during the same period, exceeding market expectations [2] - The growth in performance is attributed to the enhanced global recognition of its IP, diversification of product categories, and rapid revenue growth across various regional markets [2] - The increase in overseas revenue proportion positively impacts both gross and net profit margins, while continuous optimization of product costs and expense management enhances profitability [2] Group 2 - The company is projected to achieve approximately 170% and over 225% year-on-year revenue growth in Q1 and Q2 respectively, with a 50%+ quarter-on-quarter growth from Q1 to Q2 [3] - New product launches in Q2, including popular series and collaborations, have received positive consumer feedback, with some products sold out across official channels [3] - The company opened 25 new stores overseas in Q2, with 10 located in North America, significantly boosting market interest in that region [3] Group 3 - The increase in overseas revenue share, product price adjustments, and scale effects from new categories are expected to lead to a substantial improvement in gross margins, with a projected net profit margin of approximately 32% for the first half of 2025, marking a historical high [4] - The net profit margins for the same period in 2024 were 21.9% and 27.5% for the first and second halves respectively, indicating a performance that exceeds market expectations [4] Group 4 - The company is advancing its group strategy centered around IP, demonstrating strong growth potential in the medium to long term [5] - The LABUBU brand continues to gain global traction, validating the company's ability to innovate and optimize design while growing alongside its IP [5] - The company is expanding its business into diverse areas, including jewelry and animation, which is expected to enrich IP content and extend its lifecycle [5]

Summary of the Conference Call for Pop Mart Company Overview - **Company**: Pop Mart - **Industry**: Toy and Collectibles Key Points and Arguments 1. **Product Release and Stock Strategy**: In early 2025, the release of first and second-generation products led to a stock price drop, but the company's IP popularity remained unaffected, with prices recovering afterward. During the 618 shopping festival, the high premium on Labubu's third-generation products prompted the company to restock to combat scalping and stabilize prices through multiple pre-sales, benefiting long-term brand development [2][4] 2. **IP Popularity and Market Trends**: Pop Mart's IP exhibits cyclicality, but the sugar gel plush category has amplified its appeal, significantly increasing popularity. Labubu's success in Southeast Asia has mirrored in the Chinese market, with a surge in North American interest noted from April 2025, indicating substantial future growth potential [2][5] 3. **Global Market Performance**: Labubu has shown strong global attributes, performing well not only in North America but also in the Middle East and South America, with notable influence in the Russian online market. The demand for Labubu in Southeast Asia has been robust since late April 2024 [2][6] 4. **Diversification of IP**: To mitigate risks associated with reliance on a single IP, Pop Mart has diversified its offerings by introducing more IPs like Gudetama, Pacha Dog, and Kuromi. In 2024, Gudetama accounted for approximately 20% of revenue, expected to remain below 40% in 2025 [2][7] 5. **Emerging IPs**: The company is actively promoting new IPs such as Crybaby, Xiao Ye, and Newcomer, with Crybaby gaining acceptance overseas and Newcomer appealing to a broad audience, including women, men, and children [3][9] 6. **BJD Product Line Expansion**: Pop Mart is exploring new categories like BJD (Ball Jointed Doll) figures, with the recent launch of Spenda generating significant social media buzz, indicating successful product innovation [10] 7. **Third-Party IP Licensing**: The company has excelled in third-party IP licensing, with products like the Nezha blind box increasing foot traffic and diversifying customer demographics. Collaborations with brands like Luckin Coffee have also been successful [11] 8. **North American Market Expansion**: As of May 2025, Pop Mart operates nearly 40 stores in North America, with a strong monthly opening rate and plans to expand further into Malaysia, Indonesia, Vietnam, Japan, South Korea, and the UK [12] 9. **Southeast Asia and Europe Marketing Strategies**: In Southeast Asia, new marketing strategies have been implemented to enhance user engagement, while localized marketing activities in Europe aim to attract customers through unique experiences [13] 10. **2025 Performance Outlook**: The company anticipates a total revenue of approximately 9 billion RMB for 2025, with a strong performance expected in the first half and potential upward revisions to forecasts [14] Additional Important Insights - The cyclical nature of IPs is acknowledged, with historical data showing stable revenue prior to the introduction of new popular products [5] - The company’s proactive approach to restocking and managing market expectations is seen as beneficial for brand health [4] - The diversification strategy is crucial in avoiding over-reliance on any single IP, as demonstrated by past industry examples [7]