An above-expectation earnings report has once again focused market attention on POP MART's global expansion pace and its IP portfolio development capabilities.

According to JPMorgan's latest research report, POP MART's adjusted net profit for the first half of the year soared 367% year-over-year to RMB 4.66 billion, 4% higher than previous earnings guidance. During the same period, total revenue increased 204% to RMB 13.9 billion, meeting market expectations.

Overseas market expansion and strong performance from super IP Labubu and new IP "Twinkle Twinkle" became dual drivers of earnings growth. "Twinkle Twinkle," which debuted just six months ago, achieved sales of RMB 389 million.

Overseas Business Becomes New Growth Engine

Data shows that POP MART's overseas markets (including Hong Kong, Macau, and Taiwan) sales surged 440% year-over-year in the first half of 2025, reaching RMB 5.593 billion and contributing approximately 50% of group sales, up from 44% in the second half of 2024, with growth far exceeding the domestic market.

Overseas operations also showed significantly superior profitability compared to domestic markets. According to JPMorgan estimates, overseas stores generate approximately 4 times the sales per store compared to mainland China stores. Meanwhile, overseas online sales as a proportion of total overseas sales increased substantially from 23.2% in the first half of 2024 to 45.8%, while this ratio in the domestic China market was 35.5%.

Although the number of new overseas stores opened was 42, slightly below JPMorgan's expectation of 51, strong online sales and higher per-store output effectively compensated for this gap.

Labubu Continues to Lead, New IPs Show Strong Performance

Super IP Labubu continued its strong growth momentum, with sales increasing 668% year-over-year to RMB 4.814 billion in the first half of 2025, contributing 34.7% of group sales, at a healthy level.

More notably is the performance of new IPs. According to JPMorgan's research report, new IP Twinkle Twinkle achieved sales of RMB 389 million in its first 6 months after launch. By comparison, Crybaby and Hirono achieved sales of RMB 71 million and RMB 90 million respectively in their first years.

In IP rankings, Crybaby ranked fourth, behind Labubu, Molly, and Skullpanda, but its sales grew 248% year-over-year, making it the second-fastest growing IP.

Profitability Continues to Improve

According to JPMorgan's research report, POP MART's gross margin reached 70.3% in the first half of 2025, up 6.3 percentage points from 64.0% in the same period last year. Net profit margin increased significantly from 20.2% to 33.0%, an increase of 12.8 percentage points.

The company encountered production capacity bottlenecks in Q2 2025, but management indicated that July capacity doubled compared to June, with expectations for further significant improvement in August, laying the foundation for second-half growth.

JPMorgan listed seven consecutive catalysts for POP MART in its research report, including: Labubu x Uniqlo collaboration T-shirts launching on August 22; opportunities for inclusion in the Hang Seng Index; "Labubu & Friends" animation season one premiering in August/September; Labubu 4.0 trailer/Christmas/Spring Festival holiday releases, among others.

JPMorgan maintains an "overweight" rating on POP MART with a target price of HK$340, considering it still the preferred stock in China's consumer sector. The firm also noted that POP MART faces downside risks including delays or failures in new IP launches, non-renewal of licensed IPs, and tariffs.