Summary of the Conference Call on Pop Mart Company Overview - The conference call focuses on Pop Mart, a company in the collectibles and toy industry, particularly known for its designer toys and IP collaborations [1][2]. Key Points and Arguments 1. **Stock Performance**: - Pop Mart's stock price has rebounded significantly, rising over 40% since the company initiated a buyback on January 19 [1]. - The stock price fluctuations from late October to now have been attributed to market speculation rather than new company information, as the company has limited financial reporting windows [1]. 2. **Market Sentiment**: - Negative sentiment regarding North American performance emerged after September last year, leading to a continuous stock price decline and downward adjustments in bullish earnings expectations [1]. - By late January, following the buyback and product catalysts, market sentiment shifted positively despite the lack of new bearish logic [1]. 3. **Long-term Growth Potential**: - The long-term growth narrative for Pop Mart remains intact, with recent high-frequency data misleading investors about the company's sustainable growth [2]. - The company has benefited from category expansion and IP explosions over the past two years, with a focus on "refinement and localization" in 2026 [2]. 4. **IP Collaboration**: - Collaborations with local IP designers are emphasized, with a stable existing IP portfolio and new IP launches, such as Merodi, which is designed by a Taiwanese designer [2]. - Future IP collaborations may focus on local designers in the U.S. and Europe, which could enhance market penetration, as evidenced by successful experiences with Southeast Asian and American designers [2]. 5. **Store Expansion and Upgrades**: - The company is opening larger stores both domestically and internationally, allowing for better product display and customer experience [2]. - The upgrade of existing stores is just beginning, with a focus on enhancing the overall store effectiveness compared to traditional smaller stores [2]. 6. **Branding and Consumer Experience**: - The establishment of landmark stores in locations like Fifth Avenue and Times Square is expected to enhance brand recognition [3]. - Continuous optimization of the shopping experience is noted, including frequent updates to shopping bag designs [3]. 7. **International Expansion**: - The company is in the foundational stage of its international expansion, with a focus on local integration and operational efficiency [3]. - The long-term strategy includes a "group" approach, potentially leading to segmented financial reporting by different business units in the future [3]. 8. **Financial Projections**: - The revenue forecasts for 2025, 2026, and 2027 are projected to be 38.3 billion, 51.3 billion, and 62.7 billion respectively, with non-GAAP net profits of 13.3 billion, 17.7 billion, and 22.1 billion [3]. Additional Important Insights - The company is actively working on enhancing customer engagement and education regarding its multiple IPs, particularly in overseas markets [3]. - The strategic focus on larger stores and localized IP development is expected to drive future growth and market penetration [2][3].

Core Viewpoint - The company reported a significant year-on-year revenue growth of 245%-250% for Q3 2025, exceeding market expectations, with strong performance across various channels and regions [1][2]. Revenue Performance - Domestic revenue in China grew by 185%-190%, with offline channels increasing by 130%-135% and online channels by 300%-305% [1]. - Overseas revenue surged by 365%-370%, with specific growth rates of 170%-175% in the Asia-Pacific region, 1265%-1270% in the Americas, and 735%-740% in Europe and other regions [1]. IP Development and Longevity - The commercial value curve of the labubu IP does not align with its popularity curve, indicating that high-quality IPs have a longer lifecycle than market perceptions suggest [1]. - Historical data shows that most of the company's key IPs have achieved continuous year-on-year revenue growth, with MOLLY, an early artist IP, maintaining a CAGR of 22% from 2019 to 2023 [1]. Global Market Expansion - The company is leveraging its diverse IP matrix to enhance its presence in global markets, which is crucial for catering to varying cultural preferences [2]. - The success of multiple IPs in overseas markets, such as crybaby and 星星人, demonstrates a notable increase in popularity, with regional differences in demand [2]. - The company is optimistic about expanding its store presence in overseas markets, which will allow for greater audience reach and maximize the commercial value of its diverse IP matrix [2].

Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2][6]. Core Views - The company achieved a revenue of 13.876 billion yuan in the first half of 2025, representing a year-on-year growth of 204.4% [6]. - Adjusted net profit reached 4.710 billion yuan, with a year-on-year increase of 362.8%, and an adjusted net profit margin of 33.94%, up by 11.6 percentage points [6]. - The company’s IP matrix continues to grow, with significant contributions from top IPs and a rapid increase in new IP cultivation [6]. Financial Performance - Revenue breakdown shows that the top IPs generated significant income, with "The monsters" contributing 4.81 billion yuan, "Molly" 1.36 billion yuan, and "Skullpanda" 1.22 billion yuan, among others [6]. - The plush category saw a staggering growth of 1276.2% to 6.139 billion yuan, becoming the highest revenue-generating category [6]. - The company’s gross margin improved to 70.3%, a year-on-year increase of 6.3 percentage points, driven by better cost control and a higher proportion of overseas high-margin business [6]. Revenue and Profit Forecast - The company forecasts total revenue of 30.05 billion yuan for 2025, with a year-on-year growth of 130% [7]. - Adjusted net profit is projected to reach 10.368 billion yuan in 2025, reflecting a growth of 205% [7]. - The adjusted PE ratios for 2025, 2026, and 2027 are estimated at 37.4x, 27.3x, and 22.4x respectively [7]. Market Expansion - The company reported a revenue of 8.28 billion yuan from the China region, a year-on-year increase of 135.2%, with significant growth in offline channels [6]. - Overseas revenue reached 5.59 billion yuan, marking a remarkable growth of 439.6%, with the Americas showing a particularly high growth rate of 1142.3% [6]. - The company plans to expand its overseas store count to 200 by the end of the year, with a focus on emerging markets such as the Middle East and South Asia [6].