China International Capital Corporation (CICC) has released a research report indicating an "Outperform" rating for POP MART (09992), supported by its accelerated capacity release and a promising overseas seasonal peak. The firm has increased its adjusted net profit forecasts for 2025 and 2026 by 20% and 21%, respectively, forecasting figures of 13.2 billion and 17 billion yuan. The current stock price corresponds to adjusted price-to-earnings (P/E) ratios of 23 and 18 for 2025 and 2026.
CICC maintains the target price at HKD 370, which reflects adjusted P/E multiples of 35 and 27 for 2025 and 2026, presenting a potential upside of 48%. Key insights from CICC indicate the following:
Company Update In Q3 2025, POP MART reported substantial business performance, with total revenue growth of 245% to 250% year-on-year, further accelerating quarter-on-quarter. Revenue from the Chinese market and overseas markets grew by 185% to 190% and 365% to 370% year-on-year, respectively, surpassing both CICC's and market expectations. This growth is attributed to new launches from top product lines and accelerating growth in European and American markets, coupled with a faster capacity release.
Chinese Same-Store Performance Surpasses Expectations Analyzing Q3 performance by distribution channels in China: 1) Offline Channel: Revenue increased by 130% to 135% year-on-year. CICC expects continued improvement in store efficiency, with the company optimizing site selection and retail layout in mainland regions. The capabilities of the former mainland team have also enhanced operations in Hong Kong, Macau, and Taiwan. 2) Online Channel: Revenue saw a year-on-year increase of 300% to 305%, aided by capacity release and improved inventory flow. The company has also intensified efforts to combat scalping and speculation, significantly enhancing the overall purchasing experience for fans. Given the higher margins in online sales, Q3 profit margins are projected to improve further.
Rising Global Popularity of IP In terms of regional performance, Q3 revenue across the Asia-Pacific, Americas, Europe, and other regions grew by 170% to 175%, 1265% to 1270%, and 735% to 740% year-on-year, respectively. CICC noted that POP MART opened 23 new stores overseas in Q3, with distributions across the Asia-Pacific (5), Americas (12), Europe (6), including flagship stores in Berlin's Alexanderplatz and New York's World Trade Center. The LABUBU brand, driven by celebrity effects, quality new products, and local operations, has rapidly gained popularity, attracting a substantial fan base. Other brands like Xiaoye and SP have also developed massive followings, evolving into global-level intellectual properties (IPs).
Outlook on Resilience and Long-Term Growth Potential While the popularity remains high, POP MART is increasingly focused on the health of its IPs and brand. Events like the Star Dolls meeting and the 10th anniversary tour of THE MONSTERS have brought fans closer and enriched the IP image. With the rapid enhancement of production capacity, the company is also better positioned to manage the release of supply, smoothing out the adverse effects of fluctuations in secondary market prices and meeting genuine demands.
As Q4 celebrations approach overseas, the company continues to launch premium offerings, including Halloween-themed plush toys and collaborations with SP featuring "Wednesday." Efforts to optimize store design and establish fan systems are ongoing. CICC continues to maintain a positive outlook on the company's cyclical resilience and long-term growth potential, driven by mature end-to-end capabilities and a management philosophy that respects time and operations.