Shenwan Hongyuan Maintains "Buy" Rating on POP MART (09992), Citing Cross-Regional Expansion and IP Growth for Long-Term Operations

Stock News12-01

Shenwan Hongyuan Group Co., Ltd. has reiterated its "Buy" rating on POP MART (09992), highlighting the company's robust IP portfolio and operational expertise as key drivers for sustained overseas market activation. The rapid expansion of offline channels and the strong sales performance of seasonal new products, coupled with the global popularity of flagship IPs like Labubu, have significantly enhanced the brand's influence. Shenwan Hongyuan remains optimistic about the company's long-term prospects in terms of market positioning, management capabilities, and competitive landscape. Key insights include:

1. **Steady Globalization**: The report emphasizes POP MART's strategic overseas supply chain and channel expansion, catering to global demand for collectible toys with strong display, social, and gifting appeal. Offline channels serve as vital sales and branding platforms, with standardized retail stores further stimulating regional demand. As of October 30, the company operates 171 overseas stores, aligning with expansion plans: - **North America (62 stores)** and **Europe (28 stores)**, with recent entry into the Middle East, showing significant room for growth in coverage and density. - **Southeast Asia (44 stores)** and **East Asia (22 stores)**, where channels are steadily optimized, particularly in Japan and South Korea.

2. **Supply Chain Adjustments**: Surging overseas demand has posed supply challenges, prompting ongoing improvements in product availability and logistics in regions like North America. POP MART's diverse product and IP offerings provide resilience, ensuring adaptability to market fluctuations.

3. **Seasonal Sales Momentum**: The Halloween-themed products in October-November sparked a sales surge in North America, with expectations for further revenue growth during year-end holidays, driven by Labubu and other new IPs.

4. **IP Ecosystem Strength**: - **Labubu's Success**: Demonstrating POP MART's long-term IP management prowess (e.g., Molly, SP), Labubu maintains fan engagement through product innovation. Its revenue share (35% in H1 2025) remains balanced, while other IPs like SP and Skullpanda show breakout potential. - **Brand Elevation**: Labubu's global fame, alongside other top IPs, has elevated POP MART's brand profile, evidenced by participation in Macy's Thanksgiving Day Parade in New York on November 27.

5. **Sustainable Business Model**: Shenwan Hongyuan underscores POP MART's competitive edge in IP design, operations, and supply chain, enabling long-term value creation. Recent limited-edition releases (e.g., Crybaby, Dimoo plush) maintained slight premiums, with Dimoo selling out quickly, reflecting healthier IP supply-demand dynamics and stronger fan loyalty.

**Risks**: Geopolitical uncertainties may slow expansion; new product sales or IP development could underperform expectations.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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