

Summary of Pop Mart (9992.HK) Earnings Call Company Overview - Company: Pop Mart (9992.HK) - Market Cap: HK$420.9 billion / $54.0 billion - Enterprise Value: HK$405.6 billion / $52.0 billion - Current Price: HK$316.00 - Target Price: HK$350.00 (implying 10.8% upside) [1][27] Key Industry Insights - Sales Growth: Management expects full-year sales to reach Rmb30 billion, with significant contributions from overseas markets, particularly Asia Pacific and Americas, projected to match China's revenue of Rmb8 billion in 2024 [1][18] - Margin Expansion: Full-year net profit margin (NPM) is anticipated to reach 35%, up from 34% in 1H25, driven by gross profit margin (GPM) expansion and operational leverage [1][18] - New Product Launch: Introduction of a smaller-sized plush toy, Labubu, aimed at expanding usage scenarios [1][17] Financial Performance - Earnings Forecast Revision: 2025-27E earnings forecast revised up by 28%-34%, with expected adjusted net profit (NP) of Rmb12.8 billion and Rmb17.6 billion for 2025 and 2026 respectively [1][27] - Revenue Projections: - 2025E Revenue: Rmb36.6 billion (180% YoY increase) - 2026E Revenue: Rmb50.5 billion (38% YoY increase) [1][27] Strategic Initiatives - IP Platform Development: Focus on enhancing the health of the IP and leveraging various product formats to attract customers [1][17] - Store Expansion: Plans to increase store count to 200 by year-end 2025, with a disciplined approach to store openings in China and overseas [1][17][19] - Supply Chain Enhancements: Manufacturing capacity for plush toys has increased to 30 million units per month, over 10 times the capacity from the previous year [1][17][23] Market Expansion - New Market Entry: Plans to enter markets in the Middle East, Latin America, South Asia, and Russia, with online sales as the primary channel initially [1][17][19] - Store Productivity: Average sales per store reached Rmb23.49 million, a 99% YoY increase in 1H25 [1][20] Risks and Considerations - Market Volatility: Post-share price rally, market expectations have risen, which may lead to volatility despite ongoing earnings upside potential [1][27] - Single IP Risks: Potential risks associated with reliance on a single IP and the ability to expand the IP portfolio [1][35] Conclusion - Investment Rating: Neutral rating maintained with a target price of HK$350, reflecting a cautious outlook amid strong sales momentum and operational improvements [1][27][35]