POP MART(09992) 第一上海证券·2025-02-28 07:06Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of HKD 125.6, indicating a potential upside of 17.2% from the current price [2][3]. Core Insights - The report highlights that the company, Pop Mart, is a leading player in the Chinese trendy toy market, with a comprehensive operational platform covering the entire industry chain from IP incubation to brand operation [1][6]. - The company has demonstrated strong revenue growth, with a projected net profit of RMB 27.3 billion, RMB 39.6 billion, and RMB 52.2 billion for FY24, FY25, and FY26 respectively [2][4]. - The global trendy toy market is rapidly expanding, with a forecasted growth from USD 198 billion in 2019 to USD 418 billion by 2024, driven by rising disposable incomes and the successful incubation of quality trendy toy IPs [1][22]. Company Overview - Pop Mart was established in 2010 and has evolved into a leading cultural and entertainment company in China, focusing on trendy toys and IP development [6][19]. - The company has achieved significant revenue growth over the past three years, with revenues of RMB 44.9 billion, RMB 46.2 billion, and RMB 63.0 billion from 2021 to 2023 [6][20]. - As of mid-2024, Pop Mart operates 2,789 stores, including 2,563 in mainland China and 226 in Hong Kong, Macau, and overseas [6][50]. Market Dynamics - The Chinese trendy toy market is still in its early stages, with a projected market size of RMB 764 billion by 2024 and RMB 1,101 billion by 2026, reflecting a compound annual growth rate (CAGR) of 20% [20][23]. - The report notes that the market is characterized by a low concentration of players, with Pop Mart holding a market share of 8.5% in 2019, making it the largest brand in the sector [24][30]. - The company is actively expanding its overseas presence, with expectations that international business could account for over 50% of its revenue by 2025, focusing on markets in Europe, the United States, Japan, South Korea, and Southeast Asia [24][29]. IP Strategy - Pop Mart's core business model revolves around an integrated platform that connects artists and consumers, facilitating the commercialization of IP products [31][32]. - The company has successfully incubated multiple popular IPs, including MOLLY, SKULLPANDA, and DIMOO, with a total of 93 IP images as of mid-2024 [7][35]. - The report emphasizes the importance of continuous IP operation and channel development as key competitive advantages for the company [31][33]. Financial Performance - The company's revenue for FY2023 was RMB 63.01 billion, representing a year-on-year growth of 36.5% [1][4]. - The report provides a detailed financial summary, projecting significant growth in operating profit and net profit over the next few years, with FY2024 expected to see a 94.1% increase in revenue [4][6]. - The company has also improved its inventory turnover days, reducing from 133 days at the end of 2023 to 101 days in mid-2024, indicating enhanced operational efficiency [43].