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].

Investors have most concerns on Labubu and overseas expansion. Our recent discussion with investors reflected that the market mostly worried about: (1) fading popularity of Labubu, especially when compared to the peak in 2Q25, and (2) whether store traffic would see decline as the popularity of Labubu fades and other IPs may fail to monetise as expected. Given the fragmentation of the overseas market as Pop Mart accelerates its global expansion, we note that domestic investors would have higher concerns on ...

Core Viewpoint - Bank of America Securities projects multiple growth drivers for Pop Mart by 2026, including significant monetization potential for existing IPs and the introduction of new variants of popular IPs [1] Group 1: Growth Drivers - Existing IPs like the Monsters series have substantial upside potential, with plans to further monetize them and globalize IPs such as Skullpanda and Hirono [1] - New IP launches are expected to regain momentum this year, particularly those targeting overseas markets [1] Group 2: Financial Outlook - The firm anticipates improved visibility for Pop Mart by the time of the March earnings announcement, which may trigger a revaluation of the company [1] - A "buy" rating is maintained with a target price set at 300 HKD [1] Group 3: Market Expansion - Pop Mart's global recognition from last year is expected to lead to strategic partnerships with more well-known global consumer brands [1] - Sales growth in regions outside of China, including other parts of Asia, the United States, and Europe, is projected to surpass that of China, with overseas sales expected to account for over 50% of total sales [1]

Summary of Pop Mart International Group Conference Call Company Overview - **Company**: Pop Mart International Group (9992.HK) - **Industry**: Consumer Products, specifically in the collectibles and IP (Intellectual Property) market - **Market Cap**: Approximately US$33.82 billion as of January 5, 2026 Key Points Sales Performance and Market Expectations - Pop Mart's North America (NA) sales in 4Q25 are expected to be 25-30% lower than 3Q25, with total sales for 2025 projected to be below Rmb7 billion [3][4] - The market consensus for NA sales in 2025 is likely too low, with estimates around low Rmb6 billion [9] - The company anticipates Rmb7.1 billion in NA sales for 2025, with expectations of a rebound in 2026 driven by new product launches and improved sales from non-Labubu products [4][9] Product and IP Development - Labubu, a key product line, is expected to see enhanced designs and more launches in 2026, contributing to sales growth [4] - Non-Labubu products have shown significant growth, with sales increasing by 131% in 1H25 and projected to rise by approximately 120% in 2H25 [16] - The company has launched around 200 products in 2025, with only about 10 being Labubu-related, indicating a diversification strategy [16] Financial Projections - Revenue projections for 2026 are estimated at Rmb47.88 billion, representing a 26% year-over-year increase [6] - Earnings per share (EPS) estimates for 2026 are Rmb11.63, with a projected P/E ratio of 15.3 [6] - The stock is currently trading at HK$196.20, with a price target of HK$325.00, indicating a potential upside of 66% [6] Market Dynamics and Growth Drivers - The company is positioned to capture the growing global "kidult" market, which is valued at over USD100 billion [24] - Pop Mart's business model is asset-light with high return on equity (ROE), supported by direct-to-consumer (DTC) sales and strong pricing power [25] - The shift back to offline sales is seen as a positive development, enhancing customer engagement and brand loyalty [12] Risks and Challenges - Key risks include uncertainties related to new product launches, potential inability to maintain product quality, and the impact of counterfeits on brand value [29][30][33] - Pricing management is crucial, as raising average selling prices (ASPs) could alienate core customers [32] - The company must effectively convert strong consumer interest in Labubu into sales across other IPs to sustain growth [34] Investment Thesis - Pop Mart is viewed as a top pick due to its potential to evolve into a global IP collectibles platform, leveraging its unique business model and strong brand equity in China and Asia [35][37] - The company is expected to deliver strong earnings growth, driven by successful product launches and expansion into new markets [35][37] Conclusion - Pop Mart is well-positioned for future growth, with a strong focus on product diversification and market expansion. However, it must navigate various risks to maintain its growth trajectory and investor confidence.

Core Viewpoint - Morgan Stanley believes that the market is overly focused on Pop Mart's high-frequency sales data in the North American market, significantly underestimating the company's true value [1] Group 1: North American Sales Expectations - The widely circulated credit card consumption data suggests that Pop Mart's North American sales in 2025 will be around 6 billion RMB, with a projected decline of 25-30% in Q4 compared to Q3 [2] - Morgan Stanley's analysis predicts that Pop Mart's North American sales in 2025 will be 7.1 billion RMB, with Q4 sales remaining close to Q3 levels [2] - The firm estimates that the average annual sales per store in North America will reach 45-50 million RMB, indicating strong demand as new stores can recover their investment in 1-2 months [2] Group 2: Online and Offline Sales Dynamics - In the first half of the year, online sales accounted for approximately 60% of Pop Mart's North American market, driven further to 60-70% in Q3 due to Labubu pre-sales [3] - Offline sales have a more diverse IP distribution compared to online channels, enhancing opportunities for new IP exploration and cross-selling [3] - The experience in China and the Asia-Pacific region shows that physical stores are essential for cultivating repeat customers, who exhibit more stable purchasing behavior than social media-influenced consumers [3] Group 3: Growth Drivers and IP Diversification - Morgan Stanley highlights that the market is overlooking Pop Mart's sales of older Labubu plush toys in the second half of 2025, with more new products expected in 2026 [4] - The firm identifies the restoration of quarter-on-quarter growth and evidence of IP diversification as key catalysts for improving market sentiment [5] - The company is expected to accelerate growth in Q2 and Q3 of 2026, driven by continuous store openings, new customer acquisition, and product launches [5] Group 4: Long-term Investment Logic - Pop Mart is positioned to capture the growing demand for "kidult" IP products globally, evolving into a global IP collectibles platform [6] - The company's business model is asset-light with high ROE, aiming for long-term high-quality returns while leading the global kidult trend [6] - At the current valuation, Pop Mart trades at approximately 16 times the 2026 P/E ratio, with a 21% profit growth expectation, potentially dropping to 12 times if sales reach 60 billion RMB [6]

Core Viewpoint - The "Labubu economy" is facing significant challenges as the secondary market's premium ability declines, leading to a loss of appeal for Pop Mart in the capital market [1] Group 1: Market Performance and Investor Sentiment - Investors are reassessing whether Pop Mart can maintain its high growth narrative and if its core IP is merely a fleeting trend [2] - Reports of weakened demand from scalpers have caused Pop Mart's stock to drop by 6.2%, marking its largest decline in three weeks and making it one of the worst performers in the MSCI Asia Pacific Index [2] - Since peaking in August, Pop Mart's stock has fallen approximately 44%, resulting in a market value loss of over $25 billion [5] Group 2: Secondary Market Dynamics - The sell-off was triggered by reports of significant price volatility in the secondary market, indicating weak demand and causing some scalpers to halt their stockpiling activities [4] - Data from the resale platform Qianshao shows that the average price of the mini Labubu set has fallen below the official retail price, with the "Sit Down" series dropping from nearly $400 to about $110 [8] Group 3: Growth Concerns and Market Expansion - Pop Mart's revenue growth in North America has slowed to 424%, halving compared to the previous quarter [10] - Despite aggressive marketing efforts, disappointing performance during the U.S. Black Friday and cooling resale demand have raised concerns about Pop Mart's long-term viability as a brand comparable to Disney or Sanrio [11] Group 4: Valuation and Diversification Efforts - Some institutional investors are adopting a wait-and-see approach due to negative market sentiment and uncertainties regarding future earnings per share [14] - Pop Mart is attempting to mitigate risks associated with reliance on a single IP by investing in other IPs and expanding into the entertainment sector, including theme parks and film development [15]

Summary of Pop Mart International Group (9992.HK) Conference Call Company Overview - **Company**: Pop Mart International Group (9992.HK) - **Industry**: Consumer Goods, specifically in the IP collectibles market - **Market Cap**: Approximately US$37.7 billion as of November 27, 2025 Key Points 2026 Outlook - **Price Target**: Adjusted from HK$382.00 to HK$325.00, reflecting market conditions and growth expectations [1] - **Sales Forecast**: Expected total sales of Rmb48 billion in 2026, representing a 26% year-over-year growth [11] - **Growth Drivers**: Sustained momentum anticipated from China and APAC regions, supported by strategic marketing and store openings in the US [1][2] Performance Metrics - **Revenue Breakdown**: - Labubu sales projected at Rmb15.5 billion in 2025, with growth moderating to 13% in 2026 [3][17] - Non-Labubu IPs expected to contribute Rmb22.4 billion in 2025, with a growth forecast of 35% in 2026 [11][13] - **Net Profit Margin**: Expected to remain high, around 32% in 2026, supported by lower advertising and promotional expenses [4][46] Market Dynamics - **US Market Growth**: Forecasted sales growth of 34% in 2026, with a long-term view that the US market could surpass China due to its size and demand for IP collectibles [22][23] - **Offline Expansion**: Emphasis on increasing offline presence, which currently accounts for only 35% of US revenue, compared to 60% in the broader toy and hobby category [25][30] Strategic Initiatives - **Product Launches**: Management plans to increase product launches in 2026, including new figurine collections and plush series [20][21] - **Localized Marketing**: Enhanced marketing efforts to strengthen Labubu's global presence through localized designs and collaborations [31][32] Financial Adjustments - **P/E Ratio**: Target P/E reduced from 32x to 26x for 2026, reflecting unfavorable market conditions and a focus on near-term growth [5][59] - **Sales Volatility**: Increased sales volatility expected in the short term due to market dynamics and consumer behavior shifts [5][59] Regional Insights - **Greater China**: Sales estimated at Rmb21 billion in 2025, with a growth forecast of 22% in 2026 [38] - **APAC Opportunities**: Strong growth potential in Japan and Korea, leveraging cultural similarities and consumer preferences [42][43] Risks and Considerations - **Market Sentiment**: Current bearish sentiment may overlook the long-term growth potential driven by a recurring customer base [2][3] - **Supply Chain Challenges**: Management is exploring production options in Latin America to shorten supply chains and improve US operations [35] Conclusion - Pop Mart is positioned for sustained growth in the IP collectibles market, with strategic initiatives aimed at expanding its customer base and enhancing brand presence both domestically and internationally. The company’s focus on offline expansion and localized marketing efforts is expected to drive future sales growth, despite current market volatility and adjustments in financial projections.

Summary of Pop Mart (9992.HK) Conference Call Company Overview - **Company**: Pop Mart International Group Ltd - **Industry**: Pop toy industry - **Market Position**: Largest pop toy company in China, expanding globally with strong IP incubation and monetization capabilities [17][18] Key Financial Highlights - **3Q25 Revenue Growth**: Achieved revenue growth of **245-250% YoY**, driven by **185-190% YoY** growth in the PRC and **365-370% YoY** growth in overseas markets [1][2] - **1H25 Comparison**: Revenue growth in 1H25 was **204% YoY**, indicating a significant acceleration in the latter half of the year [2] - **Sales Channels**: - **PRC Offline Sales**: Grew by **130-135% YoY** - **PRC Online Sales**: Surged by **300-305% YoY** - **Overseas Sales**: - **America**: **1265-1270% YoY** - **Europe & Others**: **735-740% YoY** - **APAC**: **170-175% YoY** [2][9] Operational Insights - **IP Recognition**: The company is enhancing its IP influence through marketing events and collaborations, including a **10th Anniversary Global Tour** and art installations [3] - **Product Launches**: New product releases, particularly under the **TWINKLE TWINKLE** IP, are driving rapid sell-through rates [3] Financial Projections - **Target Price**: Increased to **HK$415**, reflecting a **65.7% expected return** from the current price of **HK$250.40** [4][8] - **Earnings Forecast Adjustments**: FY25-27E earnings forecast adjusted upwards by **16.8-17.3%** due to a more promising sales outlook [1][11] - **Valuation Ratios**: - FY25E P/E: **22.6x** - FY26E P/E: **16.7x** [1][8] Investment Strategy - **Recommendation**: Maintain a **Buy** rating, emphasizing the importance of sell-through trends over secondary market performance [1][18] - **Market Cap**: Approximately **HK$336,273 million** (US$43,289 million) [4] Risks and Challenges - **Competitive Landscape**: Rising competition in China's pop toy market with new entrants [21] - **Global Expansion Risks**: Potential disappointments in overseas market performance [21] - **IP Commercialization**: Risks associated with the inability to effectively commercialize IPs and renew licenses [21][20] Conclusion Pop Mart is positioned for continued growth driven by strong revenue performance, effective IP management, and a robust marketing strategy. However, investors should remain cautious of competitive pressures and execution risks in its global expansion efforts.

Group 1 - Morgan Stanley's report indicates that the brand popularity of Pop Mart (09992) is expected to rebound due to the launch of the "Labubu and Friends" animation and Labubu 4.0 version, with search interest for "Mini Labubu" rising since June, now comparable to Skullpanda and Dimoo [1] - The search index for Skullpanda increased by 40% compared to May, anticipating the release of a new plush toy series in June, while Crybaby's average search index remained stable from July to August [1] - The global social media engagement for Pop Mart's official accounts rose by 3% over the past two weeks, leading Morgan Stanley to maintain an "overweight" rating and a target price of HKD 400 for Pop Mart [1] Group 2 - Mini and large-sized Labubu are identified as hot-selling items, with the "THE MONSTERS Pin For Love" series (mini version) and "ROCK THE UNIVERSE" series (40 cm version) selling out within one minute during their launch on August 28 [2] - The pricing for Mini Labubu is set at RMB 79 in mainland China and HKD 95 in Hong Kong, with secondary market prices showing a 45% increase as of September 5, while the large Labubu is priced at RMB 499 and HKD 583, with a 56% increase in secondary market prices [2] Group 3 - Twinkle Twinkle is recognized as an emerging IP, with Pop Mart planning to launch it in August 2024, projecting sales of RMB 389 million in the first half of 2025, significantly higher than other IPs like Crybaby and Hirono [3] - The "Sweet Dream Forecast" series, priced at RMB 79 and HKD 95, is set to launch in mid-August 2025 and is expected to sell out quickly, with secondary market prices showing a premium of 110% in mainland China and 36% overseas as of September 5 [3]

Core Viewpoint - The company is experiencing strong performance in its new IP product line, with popular products frequently sold out due to supply constraints rather than weak demand. The global IP market presents significant growth opportunities, with the company expected to achieve substantial revenue growth by 2025 [1][2][4]. Group 1: Product Performance - The new IP product line, including Crybaby and Twinkle Twinkle, is performing well, indicating a supply bottleneck rather than a lack of demand [6][8]. - Popular products such as Twinkle Twinkle's "Bee Your Honey" figurine (priced at 199 RMB) and various Crybaby products (priced between 79-199 RMB) are experiencing stock shortages [7]. Group 2: Global Expansion and Brand Collaborations - The company is actively expanding its global presence and engaging in cross-brand collaborations, such as partnerships with Godiva and Chopard [9]. - New stores have opened in key cities like Berlin and Melbourne, indicating strong consumer interest in the company's IP and products [9]. Group 3: Financial Projections - The company is projected to achieve revenues of 31.046 billion RMB in 2025, representing a 138% year-on-year growth, and 42.994 billion RMB in 2026, with a 38% growth [10]. - Adjusted net profit is expected to reach 9.821 billion RMB in 2025, a 205% increase, and 13.965 billion RMB in 2026, a 42% increase [11]. Group 4: Market Potential - The global IP market is estimated to be worth approximately 800 billion USD, with the company's market share currently at only 2.3%, indicating substantial growth potential [14]. - The company aims to evolve into a combination of Bandai Namco, LEGO, and Disney, suggesting that its growth story is still in the early stages [14]. Group 5: Valuation and Investment Opportunity - The current stock price of 246 HKD offers over 48% upside potential to the target price of 365 HKD, based on a projected P/E ratio of 46 times for 2025 [16][19]. - The company’s strong IP product flywheel effect and efficient direct sales model are seen as key to successful global expansion [16].