POP MART(09992) 光大证券·2024-11-19 08:37Investment Rating - The report initiates coverage on Pop Mart with a "Buy" rating, citing its strong IP operational capabilities and overseas expansion as key drivers for future growth [10] Core Views - Pop Mart is the leading player in China's trendy toy market, with significant growth potential in overseas markets [1] - The company's IP ecosystem, covering blind boxes, theme parks, and games, is expected to drive long-term growth [10] - Pop Mart's revenue is projected to grow from RMB 12.687 billion in 2024E to RMB 20.430 billion in 2026E, with adjusted net profit increasing from RMB 2.935 billion to RMB 4.783 billion over the same period [10] Industry Overview - The global trendy toy retail market is expected to grow from USD 19.8 billion in 2019 to USD 41.8 billion in 2024, with a CAGR of 16.1% [11] - China's trendy toy retail market is projected to expand from RMB 207 billion in 2019 to RMB 763 billion in 2024, with a CAGR of 29.8% [1] - Pop Mart holds a 13.6% market share in China's trendy toy retail market, ranking first in 2021 [1] IP Operations - Pop Mart's IP ecosystem includes four major IPs (MOLLY, SKULLPANDA, DIMOO, THE MONSTERS), which accounted for 50% of total revenue in 2023, down from 58.1% in 2019 [1] - The company has diversified its product offerings, including MEGA high-end products, POP BEAN, and plush toys, to extend the lifecycle of its IPs [1] - Pop Mart's internal design team (PDC) has successfully launched new IPs such as Xiao Ye and Xiao Tian Dou, contributing to revenue growth [82] Domestic Market Performance - Pop Mart's domestic revenue grew from RMB 16.57 billion in 2019 to RMB 52.35 billion in 2023, with online and offline channels contributing 33% and 58% respectively in 2023 [1] - The company's retail store count increased from 114 in 2019 to 363 in 2023, with a potential ceiling of 434 stores in China [1] Overseas Expansion - Pop Mart's overseas revenue increased from 2% in 2019 to 17% in 2023, with 80 stores opened globally by the end of 2023 [1] - The company is rapidly expanding in markets like Thailand and the US, with 28 new stores added globally from January to July 2024 [1] - Overseas markets offer higher pricing and profitability compared to the domestic market, with online and offline channels contributing 15% and 60% respectively in 2023 [1] Financial Projections - Revenue is expected to grow from RMB 12.687 billion in 2024E to RMB 20.430 billion in 2026E, with a CAGR of 34% from 2024E to 2025E and 20% from 2025E to 2026E [10] - Adjusted net profit is projected to increase from RMB 2.935 billion in 2024E to RMB 4.783 billion in 2026E, with a CAGR of 33% from 2024E to 2025E and 22% from 2025E to 2026E [10] Competitive Landscape - Pop Mart's market share in China's trendy toy retail market increased from 8.5% in 2019 to 13.6% in 2021, solidifying its leading position [1] - The company faces competition from brands like TOP TOY, 52 toys, and Cool Play, but its full-chain coverage and strong IP ecosystem give it a competitive edge [62]