Summary of the Conference Call for Pop Mart Company Overview - **Company**: Pop Mart - **Industry**: Toy and Collectibles Key Points and Arguments Stock Buyback and Market Confidence - Pop Mart initiated its first stock buyback since January 2024, indicating confidence in its operations and countering negative impacts from short-selling activities. The first buyback involved 1.4 million shares at a cost of HKD 250 million, and the second involved 500,000 shares at HKD 96.49 million [2][3] Market Sentiment and Short-Selling Reports - Bernstein's short-selling report claims that the U.S. market will weaken and all IPs are deteriorating. However, this argument is based on secondary market prices and search indices, which do not accurately reflect actual sales and consumer loyalty. The report also presents contradictory expectations for the Chinese and U.S. markets [2][4][5] Domestic Market Performance - The domestic channel and IP structure are superior to international counterparts, with healthy foot traffic in offline stores. Q4 store efficiency grew nearly 40% year-over-year. Successful IP operations include "Starry People," while "Labubu" relies more on chance factors [2][6] New Product Launches and Innovation - Recent product launches, such as the "Year of the Horse" plush toys and the "Biqi Knock Knock" series, have performed well. The company is exploring diverse operational strategies, showcasing its ability to innovate and adapt to market demands [2][7] Future Growth Prospects - The outlook for Pop Mart is optimistic, with strong growth in domestic channels and a successful introduction of new products. The company is diversifying its IP value, laying a solid foundation for future growth. The U.S. market, while still developing, shows initial positive results [2][8] IP Management Strategy - Pop Mart focuses on consumer feedback and membership data for product modifications in single IP operations. Examples include the third and fourth generation of "Labubu" products, demonstrating the company's capability in IP and product innovation [2][9] Second-Hand Market Dynamics - The second-hand market's price fluctuations are attributed to supply-demand adjustments. Despite a previous surge in prices, the current supply is sufficient, leading to a natural price decline. The second-hand transaction volume accounts for only 10%-15% of total releases, indicating that most inventory is absorbed by genuine demand [2][10] Importance of the Chinese Market - The Chinese market is expected to contribute 50%-60% of sales in 2026, supported by a healthy IP structure and a robust membership system. This market is crucial for the company's growth [2][11] U.S. Market Potential - Although the U.S. market accounted for less than 20% of sales in 2025, it remains significant. The company is implementing various measures to enhance market health, including introducing new IPs and expanding store numbers [2][12] Expansion in Other Regions - Pop Mart is also focusing on markets like Canada, the Middle East, and South America, with notable performance in Canada and stable results in Southeast Asia, Japan, and South Korea since 2024 [2][13] Future Product Categories - The company plans to expand into new categories such as building blocks, jewelry, and movable dolls (BJD) to further scale its business. These emerging categories are gaining consumer interest and are expected to become future growth drivers [2][14][15] Overall Confidence in Future Development - Considering the solid domestic foundation, ongoing international expansion, and healthy IP structure, Pop Mart is viewed as a long-term growth potential with a favorable investment profile [2][16] North American Market Adjustments - In North America, Pop Mart has made adjustments to its channel and product supply due to supply chain issues. The company is narrowing online supply while increasing offline availability to address consumer demand fluctuations [2][17] Performance of Specific IPs - The "Biqi" IP has not received significant resource allocation but is still being explored. The company responds quickly to successful trends to maximize exposure and effectiveness [2][18][19] Global Business Development - Pop Mart is expanding globally, with new stores in regions like the Philippines and Dubai. The company is also exploring opportunities in other Middle Eastern countries [2][20] Sales Growth Projections - For 2026, domestic market growth is projected at 20%-30%, while overseas growth is expected at 50%-60%. The overall target is a 30% growth rate, with specific IPs like "Labubu" and "Starry People" anticipated to achieve significant sales milestones [2][20]