Investment Rating - Pop Mart is rated as a Top Buy in China's consumer sector, with a target price of HK$415.00, representing an expected return of 92.0% from the current price of HK$216.20 [8][10]. Core Insights - The report highlights that Pop Mart's user base is growing globally, with 76% of survey participants making their first purchase within one year, and 45% within three months [2][12]. - A significant 87% of respondents expressed a likelihood to purchase Pop Mart products in the next three months, driven by new product series, limited editions, and seasonal releases [3][30]. - Brand perception is strong, with 54% of respondents very satisfied and 39% somewhat satisfied, indicating a positive emotional connection with the brand [4][46]. Summary by Sections Consumer Behavior - 76% of respondents had their first Pop Mart purchase within one year, with 45% within three months [2][12]. - 34% shop for Pop Mart products every month, and 29% every three months, indicating high purchase frequency [12][14]. - 90% of respondents own at least two Pop Mart items, with the US having the highest per capita ownership [18][25]. Purchase Drivers - 87% of respondents are likely to buy Pop Mart products in the next three months, with new series and limited editions being key drivers [3][30]. - 93% plan to buy Pop Mart products in the future, with 48% maintaining current purchase frequency and 26% planning to buy more often [36][39]. - Wider product range, better quality, and lower prices are cited as factors that could increase purchase frequency [40]. Brand Perception - 54% of respondents are very satisfied with Pop Mart, with the highest satisfaction in the US at 70% [46][48]. - Gift-giving and collection/hobby are the top reasons for purchasing, with emotional satisfaction also playing a significant role [48][50]. - Character design, rarity/exclusivity, and emotional connection are highly valued attributes of Pop Mart products [51]. Financial Performance - The projected net profit for 2026 is Rmb 18,357 million, with a diluted EPS of Rmb 13.763, reflecting a growth of 35.5% [7][10]. - The company is expected to maintain a strong gross margin of around 72% in 2026 [10]. Market Dynamics - The survey indicates that Pop Mart's user base continues to grow despite concerns about secondary market prices, with only 9% of respondents purchasing from secondhand platforms [2][27]. - The brand's strong presence in physical stores, especially in China, contrasts with higher online purchase ratios in the US and UK [27][29].

Summary of Pop Mart International Limited Conference Call Company Overview - **Company**: Pop Mart International Limited - **Ticker**: 9992.HK - **Rating**: Underperform - **Price Target**: 225.00 HKD - **Market Cap**: 293,836 million HKD - **Annual Dividend Yield**: 0.4% Key Industry Insights - **Customer Base**: Approximately 59 million reported members, with divided investor perspectives on sustainability - **Survey Sample**: ~850 respondents across China to analyze purchasing behavior and engagement Core Findings 1. **Customer Engagement**: - The customer base shows shallow engagement, with 39% of respondents starting purchases within the past year and only 12% having purchased for over two years, indicating minimal sustainable collector development [1][15][16] 2. **Buyer Segmentation**: - Casual and impulse buyers represent 68% of the customer base, while collectors account for only ~6% [2][18] - 60% of respondents own fewer than 5 items, and 80% own under 11 items, confirming that Pop Mart functions as occasional discretionary spending rather than routine purchases [2][18] 3. **Acquisition and Portfolio Risk**: - LABUBU drives 38% of customer acquisition, indicating a heavy reliance on a single character, which poses a risk if its popularity declines [3][19][78] - 29% of respondents never purchased other IPs, suggesting vulnerability to abandonment if LABUBU's appeal wanes [3][19] 4. **Spending Intentions**: - 61% of respondents expect to increase spending, but 26% plan to decrease, with 13% intending to stop purchasing entirely within 12 months [11][23][100] - Growth expectations are modest, with 47% projecting a 10-20% increase, indicating reliance on Pop Mart's execution of new releases [11][23][100] 5. **Scarcity Strategy**: - 18% abandon purchases when items are unavailable, while 45% substitute within the ecosystem, indicating a reliance on cross-IP substitution rather than developing multi-IP preferences [12][24][118] - The blind box format retains 65% positive sentiment, but many find it "fun but frustrating," suggesting a need for improvement in customer experience [12][24] Financial Metrics - **Reported EPS**: - F24A: 2.36 RMB - F25E: 7.91 RMB - F26E: 10.21 RMB - **EPS Growth**: - F24A: 191.4% - F25E: 235.1% - F26E: 29.1% [8] Purchase Behavior Insights 1. **Purchase Frequency**: - 21% of respondents have made only a single purchase, indicating low habitual purchasing [56][58] - Only 16.55% purchase monthly or more frequently, suggesting limited engagement [56][58] 2. **Annual Spending**: - 68.80% of customers spend less than ¥500 annually, translating to around 6-7 items yearly [61][65] - This aligns with low ownership levels and infrequent purchases, indicating shallow customer engagement [61][65] 3. **Influence of Channels**: - In-store browsing (64.18%) and social media content (54.96%) are the top drivers for purchasing decisions, highlighting the importance of product discovery [68][71] Future Considerations - **Churn Risk**: The data suggests Pop Mart operates with a "leaky bucket," requiring continuous new customer acquisition to offset attrition [100][101] - **Product Development**: Success hinges on the ability to innovate and maintain a strong IP pipeline to drive customer engagement and spending [106][107] Conclusion - Pop Mart's current customer base is characterized by shallow engagement and a heavy reliance on a single IP, LABUBU. The company faces significant challenges in converting casual buyers into committed collectors and must focus on product innovation and customer retention strategies to ensure sustainable growth.