To The Moon

In the first half of the year when the consumer market was in the doldrums, $POP MART(09992)$ became a rare surviver in the Hong Kong stock market that bucked the trend by virtue of its outstanding overseas business expansion.The just-announced Q2 results also give investors a clearer signal.

By the way, the whole performance will also be arranged with a new material, just like a new product exchange.

Highlights of Bubble Mart's performance in the first half of 2024

1. Revenue for the first half of the year rose 62% year-on-year, and profit rose 110% year-on-year, both core indicators exceeding the "positive" forecast a month ago.

2. Domestic young people's "counter-cyclical" hip play consumption and overseas cultural commodities overseas "re-creation" opportunities are the two main lines of logic for growth, driving Bubble Mart's revenue soaring against the wind.

3. Overseas markets not only give Bubble Mart the opportunity to recreate in terms of revenue, but also more profit margins.Pricing is high and gross margins are high under the self-operated model, with 30% revenue contribution corresponding to more than 30% gross profit contribution.

4. IP design can be reused, single store sales are explosive.There is no need for brand new localized IP in the first overseas population (Oriental culture circle + Chinese culture circle), and IP development expenditure can be reused.At present, the volume of overseas stores is insufficient, the sales volume of single store is high, and the scale effect of sales expenditure is strong.

5. High revenue growth drives gross margin improvement and expenses are relatively stable.In the case of high revenue growth, profit release is more elastic and certain.Bubble Mart is the prettiest cub in the pan-consumer space.

6. Own IPs such as Molly and Skullpanda are still the pillars, and the new IP CRYBABY is also making a big splash.It is expected that Molly will become a super IP with sales of 1 billion in half a year.

7. Out of the sea of bubble Matt Dawa, plush enamel and other new categories performed brilliantly.Plush toys revenue reached 400 million yuan in the first half of the year.

Overseas market rapid growth

1. Overseas markets accounted for 30% of revenue in the first half of the year, up 259.6% year-on-year, and even doubled compared to the second half of last year.

2. Overseas market contribution accounted for more than revenue.After only two years overseas and 80 self-managed stores, it contributes 30% of revenue and 33% of gross profit.If this trend continues, there may be more than one Bubble Mart.

3. Overseas online all channels have doubled growth.Bubble Mart's official website grew 465.5%, Lazada grew 387.9%, and Shopee grew 205.2%.

4. Overseas markets explored new platforms, expanded country regions, optimized the allocation of marketing resources, and improved the sales conversion rate.

Solid growth in domestic business

1. Revenue from the Mainland China market amounted to RMB3.21 billion, a year-on-year increase of 31.5%.

2. Sales growth across channels was driven by meeting users' diversified category and IP needs, differentiated channel positioning and refined operations.

3. Revenue from offline channels amounted to RMB1.79 billion, accounting for 62.8%; revenue from online channels amounted to RMB1.1 billion, accounting for 61.8%.

4. Twenty new offline stores were opened in the first half of the year, increasing the number of stores from 363 to 374.The offline channel realized organic growth.

5. Online channels performed brightly.Revenue from box pullers was RMB 399 million, revenue from Tmall flagship store was RMB 199 million, and revenue from content e-commerce was RMB 210 million.

IP Incubation and Operation is Key

1. Seven IPs achieved half-year revenue of over RMB100 million. IP incubation and operation were key factors driving business development.

2. Artist IP revenue increased by 70.4% year-on-year, accounting for 81% of the total.All seven major IPs except HACIPUPU realized revenues exceeding 100 million.

3. The plush toy category grew by 994% and became a phenomenal hit.The block category was successfully launched, and the IP extension capability was significantly improved.

4. The revenue share of hand-me-downs was below 60% for the first time, and the revenue structure was more balanced.

Overall, Bubble Mart's performance in the first half of 2024 was eye-catching, with a double harvest in both domestic and overseas sales.Both domestic and overseas markets maintained high growth, with outstanding IP incubation and operation capabilities.Overseas market is especially worth paying attention to, and is expected to create another Bubble Mart.