2025-07-30 02:33Summary of Pop Mart - H Conference Call Company Overview - Company: Pop Mart International Group Limited - Industry: Toy and IP Merchandise Key Points and Arguments 1. Supply Chain Dynamics: Current OEM supply is in shortage as more IP brands are moving sourcing out of China, leading to stock issues for popular products like Labubu and Crybaby. This shift is expected to enhance the bargaining power of super IPs in the future, potentially improving margins [1][4][33] 2. Sales Performance: For 1H25, sales and profit after tax (PAT) increased by over 200% and 350% respectively, but results were at the lower end of market expectations. The share price fell by 7% following the profit alert, contrasting with a 3% rise in the Hang Seng Index [1][28][33] 3. Search Interest Trends: Labubu's search interest declined by 5%, raising concerns about sales sustainability. However, its current search index remains significantly higher than other IPs, indicating strong brand awareness [1][6][8][20] 4. Lifecycle of IPs: Super IPs have a lifecycle lasting decades, while average IPs last 6-24 months. A successful launch can lead to a longer lifecycle for super IPs [4][33] 5. Tariff Implications: IP brands are currently absorbing most of the tariff costs, with strong IPs able to pass these costs onto consumers [4][33] 6. Future Catalysts: Upcoming catalysts include the 1H25 earnings report, new product launches, and collaborations, such as a potential movie deal with Hollywood [4][27][33] Additional Important Insights 1. Production Capacity: Pop Mart's production is expected to double in July compared to June, with significant growth anticipated in August [27] 2. Member Base Growth: From 2019 to 2024, Pop Mart's member base grew 20 times from 2.2 million to 46.1 million, with a projected increase to 70 million by 2027 [27][33] 3. Average Revenue Per Member (ARPU): The ARPU has normalized from RMB 900 to RMB 184, indicating a shift in purchasing behavior [27] 4. Market Positioning: Pop Mart leads China's fast-growing IP merchandise market with over 100 owned/licensed IPs and a strong retail presence [33] 5. Valuation and Risks: The price target is set at HK$340.00, with key risks including delays in new IP launches, competition, and potential tariff hikes [34][35] This summary encapsulates the critical insights from the conference call, highlighting the company's current position, market dynamics, and future outlook.