Investors Seen as Overly Pessimistic About Pop Mart

0811 GMT - Investors are overly pessimistic about the decline in resale prices of Pop Mart's intellectual properties, Morningstar analyst Jeff Zhang writes. He says the market is misreading the world's largest pop-toy retailer's falling valuation and slowing revenue growth. Instead, repeat-purchase and membership data tracking real fans better reflect underlying business strength, pointing to Pop Mart's ability to extend its characters' popularity. Zhang also sees a long distribution runway, as the company has ample room to expand its overseas store count, particularly in the U.S. Morningstar forecasts five-year revenue growth of 17% on a compound annual basis, versus the 5%-6% market consensus. Midcycle operating margin is also projected to remain at 41%, above major U.S. peers. Shares, which Morningstar view as highly undervalued, close at HK$153.50.