CICC has released a research report maintaining an "Outperform Industry" rating for POP MART (09992) with a target price of HK$248. Considering the company's increased focus on quality over growth speed in 2026, CICC forecasts adjusted net profits of RMB 15.4 billion and RMB 17.7 billion for 2026 and 2027, respectively. The current share price implies adjusted P/E ratios of 13x for 2026 and 11x for 2027. The target price, adjusted based on revised profit forecasts and shifts in risk appetite within the Hong Kong-listed new consumer sector, implies adjusted P/E multiples of 19x for 2026 and 16x for 2027, representing a potential 47% upside from the current price.

CICC's primary views are as follows: Performance was largely in line with expectations. In 2025, the company achieved revenue of RMB 37.12 billion, a year-on-year increase of 185%, and an adjusted net profit of RMB 13.08 billion, up 285% year-on-year. This performance was essentially consistent with expectations. In the fourth quarter, the company proactively adjusted its operational pace to build momentum for long-term, sustainable, and healthy growth. CICC believes the strong full-year 2025 results benefited from the concentrated realization of previously accumulated strengths in product innovation, IP operations, and organizational capabilities. Looking ahead, the company plans to further optimize its organizational structure and advance its globalization and groupification strategy.

Strong growth momentum continues in China, while overseas localization progresses. By region, revenues in China, Asia-Pacific, the Americas, and Europe & others increased by 135%, 158%, 748%, and 506% year-on-year, respectively. As a mature market, China continued to achieve breakthroughs. Sales from mainland retail stores grew 131% year-on-year in the second half of 2025. The Asia-Pacific region strengthened localized, refined operations and is steadily advancing its travel retail strategy. The Americas rapidly expanded its coverage, while Europe focused on brand building by entering globally renowned landmark stores. Online, the self-developed app was launched in 34 countries. In China, scenario-based and gamified features on the blind box drawing machine drove traffic conversion, while overseas content e-commerce continued to see high growth.

The "one super, many strong" IP matrix deepens, with plush toys contributing over half of revenue. Regarding IPs, 17 IPs generated over RMB 100 million in annual revenue, and 6 IPs exceeded RMB 2 billion. The company is building immersive IP experience spaces through music, performances, and theme exhibitions. THE MONSTERS is gaining international influence, LABUBU shows strong emerging momentum, and SKULLPANDA is also accelerating its recognition among overseas consumers. By product category, revenue from plush toys, action figures, MEGA collectibles, and licensed derivatives & others increased by 561%, 73%, 14%, and 182% year-on-year, respectively. Enhanced supply chain capabilities for plush toys contributed to this category accounting for over half of total revenue, while derivatives also showed impressive growth driven by diverse innovations.

Profitability reached a new high, with new business formats poised for accelerated cultivation. The company's high growth in 2025 was accompanied by a 5.3 and 8.9 percentage point increase in gross margin and adjusted net profit margin to 72.1% and 35.2%, respectively, primarily benefiting from a higher overseas revenue contribution and operating leverage. On this foundation, management has designated 2026 as a "pit stop" year, emphasizing "respect for time and operations" and pursuing linear, healthy growth. Simultaneously, they have identified IP-centric groupification as the most critical strategic direction for the next five years. New business formats such as theme parks, food, accessories, and home appliances are expected to transition gradually from incubation to scaling. CICC reiterates its positive outlook on the company's platform advantages and medium-to-long-term growth potential.

Risks include product development falling short of expectations and delays in supply chain construction and expansion.