CICC has released a research report reiterating its adjusted net profit forecasts for POP MART (ASX: PMRTY) of 13.3 billion and 15.5 billion yuan for 2026 and 2027, respectively. At the current share price, this implies adjusted P/E multiples of 16x for 2026 and 13x for 2027. The firm views POP MART as a rare, globally leading company with significant growth potential, currently trading at a historically low valuation. It anticipates short-term event catalysts and expects sequential improvement in mid-term performance. CICC reiterates POP MART as its top pick within the sector, maintaining an "Outperform Industry" rating with a target price of HK$218. This target corresponds to adjusted P/E multiples of 19x for 2026 and 16x for 2027, representing a potential 19% upside from the current price.
Key Recent Developments
At the opening ceremony of the 2026 FIFA World Cup in North America, the LABUBU character made history as the first third-party IP to appear on the World Cup stage, generating extensive media coverage and discussion. The report suggests this event is likely to enhance recognition of LABUBU and POP MART within the Americas cultural sphere and globally. It also marks a new milestone in the globalization of Chinese IP and collectible toy companies.
Leveraging a Global Event to Build IP Recognition
The FIFA World Cup, held every four years, commands immense global influence. POP MART launched a LABUBU x FIFA collaboration product series in April and participated in filming an official music video in May. The coordinated dance and music arrangements showcased the company's enhanced capabilities in content integration and comprehensive IP operation. This prominent appearance is expected to provide LABUBU with widespread global exposure. As the tournament is co-hosted across three countries in the Americas, the report believes this establishes a solid foundation for LABUBU's penetration into the Americas cultural market, aiding in the further solidification of its IP assets and propelling the globalization of both the company and China's collectible toy IP industry to new heights.
Steady Expansion of Commercial Resources
Following LABUBU's global popularity last year, the report notes that the company has accumulated valuable operational experience and high-quality global commercial partnerships. Furthermore, from last year's Macy's Thanksgiving Day Parade appearance to this year's three-party collaboration with Coca-Cola, the company's global commercial resources are becoming increasingly impressive. This is expected to rapidly increase IP visibility, helping to expand the fan base beyond its core audience and support long-term development. Since last year, the company has also continued IP operations and fan engagement through activities like costume performances and city exhibitions, consistently working to improve the long-term health and value of its IP portfolio.
Adjustment Measures in Progress
Since setting the tone for "maintenance and adjustments" at the beginning of the year, the company has been steadily implementing measures related to store optimization, product planning, and membership system development. At the organizational level, the collaborative mechanisms among its four major regional divisions continue to be refined, with the central headquarters providing design and operational support to empower regional teams for localized IP operations. Regarding new products, the company is proactively managing the launch pace of its top IPs to reduce overexposure, while refining designs to build momentum for the peak season in the second half of the year. The report anticipates that as these adjustments take effect, overseas performance is expected to show sequential improvement starting from Q3, with long-term growth prospects remaining substantial.
Risk Factors
Key risks include product development falling short of expectations and delays in supply chain expansion and construction.
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