Core Viewpoint - Bubble Mart is expected to achieve significant revenue growth of no less than 200% in H1 2025, with Q2 growth potentially exceeding 220%, indicating a strong acceleration compared to Q1's growth of 165-170% [1] - The company's net profit is projected to increase by no less than 350%, reflecting its established global influence in the IP market and ongoing innovation in product categories [1] Group 1 - The strong performance in Q2 is driven by the continued success of the plush toy category, with average store efficiency in China increasing by 60% and online sales on platforms like Tmall, JD, and Douyin growing over 170% [2] - The Labubu plush toy has generated significant demand since its launch, maintaining high premium rates despite continuous restocking, indicating robust consumer interest [2] - The company's IP matrix is benefiting from the popularity of Labubu, with cross-IP purchasing expected to increase, further enhanced by upcoming product launches and animation projects [2] Group 2 - The company opened over 30 new stores overseas in H1, with significant expansions in North America, Europe, and Southeast Asia, contributing to improved store efficiency [3] - The projected net profit for H1 is approximately 4.34 billion yuan, with a net profit margin of 31.7%, reflecting a year-on-year increase of over 10 percentage points due to enhanced operational leverage and a growing share of overseas revenue [3] - Looking ahead to H2, the company anticipates continued improvement in profitability driven by increased overseas supply chain contributions and the expansion of diverse business formats [3] Group 3 - The revenue forecasts for 2025-2027 have been significantly raised, with adjusted net profits expected to reach 10.2 billion yuan, 15.2 billion yuan, and 19.7 billion yuan respectively, reflecting strong growth potential [3] - The target price for the company's stock has been increased by 16% to 348 HKD, based on a higher adjusted PE ratio of 42x for 2025, acknowledging the company's high growth and global IP influence [3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 348.00, reflecting a significant upside from the current closing price of HKD 263.20 [6]. Core Views - The company is expected to achieve a revenue increase of no less than 200% for 1H25, translating to approximately RMB 13.67 billion, with Q2 growth potentially exceeding 220% [1]. - The group's profit is projected to increase by no less than 350%, indicating strong operational performance and market demand [1]. - The company is establishing itself as a global leader in the IP (Intellectual Property) space, leveraging product innovation to enhance IP value [1]. Summary by Sections Financial Performance - The company anticipates a significant profit increase of no less than 350% for H1, corresponding to approximately RMB 4.34 billion and a net profit margin of 31.7%, an increase of over 10 percentage points year-on-year [4]. - Revenue forecasts for 2025-2027 have been adjusted upwards by 56.9%, 68.9%, and 68.4% to RMB 10.2 billion, RMB 15.2 billion, and RMB 19.7 billion respectively [5]. Market Dynamics - The domestic market continues to show strong momentum, with average store efficiency increasing by 60% in Q2, and online sales on platforms like Tmall, JD, and Douyin growing over 170% [2]. - The company’s IP, particularly the Labubu plush series, has gained significant traction, leading to high demand and premium pricing [2]. Global Expansion - The company has seen a rapid increase in its global fan base, with North American and European followers growing by over 1400% and 600% respectively in Q2 [3]. - The establishment of over 30 new overseas stores in H1, with a focus on high-efficiency regions, indicates a robust international expansion strategy [3]. Innovation and Product Development - Continuous product innovation, particularly in the plush category, is expected to drive sales growth and enhance brand value [2]. - The company is diversifying its offerings through various business models, including merchandise stores and animated content, which are anticipated to further enhance revenue streams [4].