Investment Rating - The investment rating for the company is "Buy" based on the strong performance and growth potential observed in the report [1]. Core Insights - The company is expected to continue its strong operational trends in Q4 with new store openings, seasonal demand, and product launches, indicating sustained growth momentum [2]. - The overseas expansion is accelerating, with a target of 200 stores by the end of the year, reflecting a significant increase from 140 stores reported mid-year [2]. - The company's IP ecosystem and supply chain optimization are strengthening its competitive barriers, with successful performance from key IPs and new product launches expected to drive sales [2]. - The financial forecasts indicate substantial growth in revenue and net profit over the next few years, with projected net profits of 112.8 billion, 166.2 billion, and 200.3 billion for 2025, 2026, and 2027 respectively [3][4]. Financial Summary - Revenue is projected to grow from 13.038 billion in 2024 to 59.496 billion in 2027, reflecting a compound annual growth rate (CAGR) of approximately 106.92% to 15.21% [3][4]. - The net profit is expected to increase significantly from 3.125 billion in 2024 to 20.032 billion in 2027, with growth rates of 189% and 21% in the respective years [3][4]. - Earnings per share (EPS) are forecasted to rise from 2.36 in 2024 to 14.92 in 2027, indicating strong profitability growth [3][4]. Key Financial Ratios - The company is expected to maintain a healthy return on equity (ROE) of 29.26% in 2024, increasing to 32.59% by 2027 [5]. - The debt-to-equity ratio is projected to decrease from 26.80% in 2024 to 19.27% in 2027, indicating improved financial stability [5]. - The current ratio is expected to improve from 3.63 in 2024 to 5.29 in 2027, reflecting strong liquidity [5].

Core Viewpoint - The recent decline in Pop Mart's stock price, which has dropped nearly 25% from its peak on August 26, is primarily driven by market concerns over the second-hand prices of certain popular products and the sustainability of their popularity. However, the company believes that second-hand prices are not a reasonable indicator of popularity, as the current price adjustments are mainly driven by supply expansion rather than changes in demand [1][2]. Group 1: Supply and Demand Dynamics - The fluctuation in the second-hand prices of Labubu is attributed to increased supply rather than a decline in popularity, as evidenced by stable or increasing prices for products not affected by capacity changes [2]. - The company maintains a leading position in the artist IP toy market, with exclusive brand positioning and control over supply, which allows for a highly expandable product lifecycle [2]. - The balance of supply and demand is crucial for enhancing fan experience and mitigating the impact of counterfeit products [2]. Group 2: Product Innovation and Pricing Strategy - Recent product launches, such as Mini Labubu, have generated significant fan engagement and strong sales performance in North America, showcasing the company's ability to blend product and social play [3]. - The company has demonstrated flexibility in pricing strategies, as seen with the price increase of SP plush toys to 159 yuan, indicating strong pricing power in the rubber plush category [3]. - Upcoming quarterly results are anticipated to be positive, driven by pre-sale shipments and new product launches, with Q4 expected to benefit from the overseas peak season and anniversary series [3]. Group 3: Long-term Growth Drivers - The company is expected to see substantial growth in 2026, driven by rapid capacity expansion in plush products and a low base in the first three quarters [4]. - The global commercial value of the company's largest IP, The Monsters, has significant growth potential, with the top five IPs showing strong momentum [4]. - The company plans to expand its overseas store count to over 180 by 2025, enhancing brand influence through flagship store openings [4]. Group 4: Financial Forecast and Valuation - The company has raised its adjusted net profit forecasts for 2025-2027 by 14%/12%/12% to 116 billion, 170 billion, and 220 billion yuan, respectively, driven by capacity expansion and product upgrades [4]. - The target price has been increased by 14% to 396 HKD, maintaining a "buy" rating based on the company's high growth potential and expanding global IP influence [4].

Financial Data and Key Metrics Changes - Total revenue for Q4 fiscal year 2025 reached RMB 617.8 million, with a net income of RMB 108 million, resulting in a net profit margin of 17.5% [17][18] - Sales and marketing expenses improved significantly to 47.6% of revenue from 69.2% in the previous quarter [17][18] - Gross profit for the quarter was RMB 467.6 million, with a gross margin of 75.7%, down from 85.9% in the same period last year [19] Business Line Data and Key Metrics Changes - Revenue from the property business totaled RMB 65.8 million, accounting for 10.6% of total revenue [18] - Individual online learning services generated revenues of RMB 456.9 million, down from RMB 906.7 million in Q4 2024 [18] - Revenues from enterprise services were RMB 35.7 million, compared to RMB 56.6 million a year ago, due to a reduction in marketing services [18] Market Data and Key Metrics Changes - The company held over RMB 1 billion in cash and cash equivalents, providing a strong foundation for transitioning into the property business [6] - Online GMV exceeded RMB 18 million in August, which is over nine times that of April [10] Company Strategy and Development Direction - The company is transforming from a traffic-driven to a product-driven business model, focusing exclusively on high-growth property business [4][5] - A potential business restructuring is underway to divest all non-property businesses, allowing concentration of resources on the property market [5][14] - The strategy includes strengthening IP creation, driving agile execution, and delivering sustainable returns to shareholders [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the property market and the company's ability to scale its IP portfolio [22][23] - The company expects revenues from the property business to be in the range of RMB 100 million to RMB 110 million for Q1 FY 2026 and RMB 750 million to RMB 800 million for the full fiscal year 2026 [22][23] Other Important Information - The company has established a joint venture with Juehua Entertainment to leverage cross-industry resources for IP promotion and engagement [51][53] - The company plans to open three to five flagship stores by the end of the year, enhancing brand visibility and community engagement [12][35] Q&A Session Summary Question: Recent revenue run rate and confirmed order backlog - Management noted that the growth rate of the Makuku IP has been explosive, with sales of Cinnodle exceeding 300,000 boxes, indicating strong future performance [26][28] Question: Details on Last One's equity arrangements - The acquisition of Last One involves a mix of shares and long-term incentives, with a commitment to long-term collaboration and value creation [30] Question: Revenue guidance and market expectations - Management stated that the guidance for FY25 and FY26 was based on a prudent assessment of market conditions, with expectations for continued growth driven by strong product performance [32][34] Question: Pipeline for the education segment restructuring - Management confirmed a strong pipeline for the restructuring process, indicating confidence in the property business's performance [38][40] Question: Product strategy and new categories - The company has a structured roadmap for IP launches and is exploring new product categories, including smaller figures and plush products [44][48]

Investment Rating - The report maintains a "Buy" rating for Pop Mart (9992 HK) with a target price of HKD 396.00 [2][6]. Core Viewpoints - Recent stock price corrections of Pop Mart, which have dropped nearly 25% from the August 26 high, are primarily driven by market concerns over the decline in second-hand prices of certain popular products and the sustainability of their popularity. However, the report argues that second-hand prices are not a reasonable measure of popularity, as the current price adjustments are mainly driven by supply expansion rather than changes in demand [2][3]. - The company is expected to achieve a successful path of "artistic equity," which lays a solid foundation for sustainable long-term growth. The report suggests that investors should actively seize the opportunity to position themselves for future gains [2][3]. Summary by Sections Second-Hand Price Fluctuations and Supply-Demand Dynamics - The recent fluctuations in the second-hand prices of Labubu are attributed to increased supply rather than changes in demand. The report highlights that the second-hand prices of products unaffected by capacity changes, such as Labubu blind box figures, have remained stable or increased, indicating strong IP popularity [3][12]. - Pop Mart's unique brand positioning and supply control in the artist IP toy market provide it with a competitive edge, reducing the likelihood of new entrants causing supply excess and price instability [3][14]. New Product Launches and Pricing Strategies - Recent product launches, such as Mini Labubu, have generated significant fan engagement and strong sales performance in North America. The company demonstrates flexibility in pricing strategies, allowing for differentiated pricing across various IPs and series [4][5]. - The upcoming Q3 earnings report is anticipated to reflect positive impacts from new product releases and the holiday season, with expectations for continued high growth in Q4 [4][5]. Long-Term Growth Drivers - The report outlines several growth drivers for Pop Mart's performance through 2026, including rapid capacity expansion in plush toys, a diverse range of new product categories, and the potential for significant revenue growth from major IPs like The Monsters [5][23]. - The company is expected to continue expanding its store presence, particularly overseas, which will enhance brand influence and customer acquisition [5][23]. Profit Forecast and Valuation - The report projects adjusted net profits for 2025-2027 to be RMB 116 billion, RMB 170 billion, and RMB 220 billion, respectively, reflecting an upward revision of 14% for 2025 [6][9]. - The target price is set at HKD 396, based on a PE ratio of 42x for 2025, which is higher than the average PE of comparable companies [6][33]. Unique Business Model and Market Position - Pop Mart's unique business model, characterized by strong control over the entire industry chain, allows for both IP innovation and product category innovation, reinforcing its market position [31][34]. - The establishment of a global fan ecosystem enhances the company's ability to transmit heat across regions and IPs, further solidifying its competitive advantage [34].

中长期来看，华泰证券认为客群受众、品类载体、体验形式的多样性，构成助力泡泡玛特IP长青的三大 支柱。该行上调2025至2027年经调整净利润14%、12%及12%，至各116亿、170亿及220亿元。 华泰证券认为，公司在拥有对搪胶毛绒品类的较高定价权的前提下，能够对不同IP、系列采取差异化定 价策略，并逐步确认效益最大化的适宜区间。在前期预售发货、Mini Labubu等新品提振下，即将于10 月公布的三季度业绩值得期待。第四季海外旺季、周年纪念系列新品等有望继续驱动业绩高增。 格隆汇9月17日｜华泰证券发表研究报告指，泡泡玛特公司产能爬坡带来供求关系的再平衡，预示着公 司"艺术平权"成功路径的复归，奠定中长期持续健康成长的良好根基。经过本轮调整，筹码结构有望长 线化，该行建议积极把握布局机会，维持"买入"评级，上调目标价14%至396港元。 ...

Core Viewpoint - Pop Mart's stock has experienced significant growth, but analysts suggest that the current valuation may be overly optimistic, indicating a less favorable risk/reward profile [1][2] Stock Performance - Pop Mart shares have surged 184% year-to-date and 427% over the past year, significantly outperforming the Hang Seng Index, which gained 35% and 52% respectively [1] - However, the stock fell over 6% in a single day and has dropped 10% over the past five trading days [1] Analyst Rating and Price Target - JPMorgan downgraded Pop Mart's stock rating from Overweight to Neutral and reduced the price target from HK$400 to HK$300 [2] Sales Momentum and Market Sentiment - Despite a solid sales momentum, there are concerns that the stock is priced as if future successes are guaranteed, making it vulnerable to any negative news or performance misses [2][4] Key Catalysts and Future Uncertainty - Four out of seven key catalysts have been met, but the success of remaining initiatives, such as the "Labubu & Friends" animation series and new product launches, is uncertain [3] Near-term Risks - There are increasing concerns regarding product quality and design, with negative media reports affecting resale prices after rapid production expansion [4] - The company is trading at high multiples, with a 2025 P/E of 31 and a 2026 P/E of 22, indicating limited room for error [4] Long-term Strategy - Pop Mart's long-term strategy remains strong, with over 100 intellectual properties, 500 retail stores, and thousands of automated "roboshops" across more than 30 countries [5] - It is expected that overseas markets will contribute over 60% of earnings by 2027, with Labubu accounting for 35% of sales [5] Potential Upside Surprises - Possible positive developments include stronger Mini Labubu sales, successful cross-selling from the upcoming animation, and endorsements from global celebrities [6] - Accelerated licensing deals with international brands could also enhance the franchise's growth potential [6]

Investment Rating - The report downgrades the investment rating of Pop Mart to Neutral from Overweight, with a price target (PT) of HK$300, down from HK$400 [1][3][9]. Core Insights - The long-term investment thesis for Pop Mart remains intact, supported by its strong brand equity and sales momentum, despite recent challenges such as declining Google search interest and resale prices [1][9]. - The report highlights that the share price has increased significantly, with a 209% year-to-date rise and a 466% increase over the past year, leading to a valuation that is considered priced for perfection [1][9]. - Upcoming catalysts, including the release of new animation and product launches, have low visibility, which may impact future performance [1][9]. Summary by Sections Investment Thesis - Pop Mart is a leader in China's IP merchandise market, with a diverse portfolio of over 100 owned and licensed IPs, 571 retail stores, and 2,577 roboshops across more than 30 countries [9][10]. - The company is expected to benefit from its proven capability in sourcing and monetizing IP through social media, a diversified IP portfolio, and significant global exposure [9][10]. Financial Estimates - Revenue is projected to grow from Rmb13,038 million in FY24 to Rmb49,559 million in FY27, with a year-on-year growth rate of 106.9% in FY24 and 20.1% in FY27 [8][25]. - Adjusted net income is expected to rise from Rmb3,220 million in FY25 to Rmb17,890 million in FY27, reflecting a compound annual growth rate (CAGR) of 34% [8][25]. Valuation - The price target of HK$300 is derived using a PEG ratio of 1.1x, which is a 40% discount to the market-cap weighted average PEG of comparable companies [10]. - The report indicates that the current valuation reflects a 25x P/E for 2026 estimates, suggesting that the stock is fairly valued given its growth prospects [10].

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 reported a significant increase in revenue and profit for the first half of 2025, indicating strong growth momentum and potential for continued performance improvement in the future [1][2][6] Domestic Performance - In H1 2025, domestic revenue reached 82.8 billion yuan, up 135.2% year-on-year, with offline channel revenue at 50.8 billion yuan (+117.1%) and online channel revenue at 29.4 billion yuan (+212.2%) [2] - The company opened 12 new retail stores, bringing the total to 443, achieving a record high in average store efficiency [2] - Membership numbers increased by 28% to 59.12 million, with a rise in per capita spending [2] - The pre-sale model initiated in June contributed to contract liabilities of 850 million yuan, more than tripling year-on-year, which is expected to boost performance in the second half of the year [2] International Performance - In H1 2025, overseas revenue reached 55.9 billion yuan, a year-on-year increase of 314%, with significant growth across regions [3] - Asia-Pacific revenue was 28.5 billion yuan (+258%), the Americas saw revenue of 22.7 billion yuan (+1142%), and Europe and others generated 4.8 billion yuan (+729%) [3] - The company opened 30 new stores in Asia-Pacific, 31 in the Americas, and 9 in Europe, indicating ongoing expansion efforts [3] - The online growth rate significantly outpaced offline, suggesting unmet demand and further expansion opportunities in various regions [3] Product Perspective - The IP matrix showed comprehensive growth, with the core character Labubu generating 48.1 billion yuan in revenue, a 668% increase [4] - Other IPs also performed well, with new IP CRYBABY generating 12.2 billion yuan (+249%) and classic IPs like MOLLY and SKULLPANDA maintaining growth [4] - The company’s ability to operate and develop IP effectively provides a strong competitive advantage [4] Category Performance - Revenue from plush toys, figures, MEGA, and derivatives reached 61.4 billion yuan, 51.8 billion yuan, 10.1 billion yuan, and 15.5 billion yuan respectively, with plush toys seeing a remarkable growth of 1276% [5] - The company’s supply chain capabilities have improved significantly, allowing for better alignment with high growth demand [5] - The gross profit margin for H1 2025 was 70.3%, up 6.3 percentage points year-on-year, with a net profit margin of 33.0%, the highest in history [5] Future Growth Potential - The upcoming Mini Labubu product is expected to expand into new usage scenarios, potentially becoming a best-seller [6] - Continued rapid store openings in the overseas market and gradual expansion into the Middle East and South America are anticipated [6] - The company is expected to maintain high growth rates in the second half of the year, supported by new product categories and business models [6]