On March 26, 2025, after Pop Mart (9992.HK) released its 2024 financial report, its share price surged 10.87% in a single day, reaching a high of HK$150.8 during the session, setting a new high since its listing, and its market value exceeded HK$200 billion. This performance continues the company's strong momentum of a cumulative increase of more than 60% in its stock price this year, reflecting the market's high recognition of its performance exceeding expectations and future growth potential.

Outstanding performance: revenue and profit double explosion

  1. Revenue growth exceeds expectations
    In 2024, Pop Mart achieved revenue of 13.04 billion yuan, a year-on-year increase of 106.9%, far exceeding the market expectation of 12.27 billion yuan. Among them, the revenue in mainland China was 7.97 billion yuan (+52.3%), while the performance of Hong Kong, Macao, Taiwan and overseas markets was particularly outstanding, with revenue reaching 5.07 billion yuan, a year-on-year surge of 375.2%, accounting for 38.9% of total revenue.
  2. Profitability has significantly improved
    Adjusted net profit was 3.4 billion yuan, up 185.9% year-on-year, and net profit margin increased from 19.6% in 2023 to 26.1%, mainly due to the optimization of gross profit margin (a historical high of 66.8%) and improved operational efficiency (inventory turnover days were shortened by 31 days to 102 days).

Growth driver: internationalization strategy and product innovation

1. Overseas business has become the second growth curve
The company's internationalization strategy has achieved remarkable results. In 2024, the overseas market is divided into four major regions:

  • Southeast Asia (revenue of 2.4 billion yuan, +619.1%)
  • East Asia and Hong Kong, Macao and Taiwan (1.39 billion yuan, +184.6%)
  • North America (720 million yuan, +556.9%)
  • Europe, Australia and others (550 million yuan, +310.7%).

The management expects that overseas revenue will exceed 10 billion yuan in 2025 (an increase of 100% year-on-year), and plans to open flagship stores in core cities in Europe and the United States through the "landmark strategy" to further expand its global influence.

2. Product diversification and IP ecosystem deepening

  • Category expansion: Non-blind box categories have grown impressively, plush toy revenue soared 1289% year-on-year to 2.83 billion yuan, and MEGA series and derivative product revenue also increased by more than 140%.
  • IP matrix strengthening: The revenue of the four major IPs (THE MONSTERS, MOLLY, etc.) exceeded 1 billion yuan, 13 IPs entered the "100 million yuan club", and the IP ecosystem continued to expand.
  • Offline experience upgrade: The city park project targets nighttime consumption scenes, plans to complete the second phase of transformation in 2025, and explore the synergy between IP and physical entertainment.

Institutional ratings and future prospects

  1. Major banks raise target prices and are optimistic about the sustainability of growth
    Morgan Stanley (JPMorgan) maintained its "overweight" rating and raised its target price from HK$113 to HK$135. It is expected that sales will increase by 47% in 2025 and net profit will increase to 4.8 billion yuan (+52%). Lyon is more optimistic and has significantly raised its target price to HK$170, believing that same-store growth and new store expansion will drive sales and net profit growth by 56% and 66% respectively in 2025.
  2. 2025 target: impact 20 billion revenue
    The company's management proposed that revenue in 2025 will exceed 20 billion yuan (year-on-year +50%), of which overseas markets will contribute more than half. The North American market is highly expected, and its scale is expected to reach the overall level of the group in 2020 (2.51 billion yuan). In addition, the domestic business will maintain steady growth through the "quality over quantity" strategy (increasing single-store output rather than the number of stores).

Risks and challenges

Despite strong performance, the company still needs to deal with the following potential risks:

  1. Secondary market hype and brand reputation: Labubu and other popular products have a premium of more than 6 times in the secondary market, which has aroused consumers' doubts about hunger marketing.
  2. Execution pressure of overseas expansion: Rapid store opening may face challenges of localized operations and cultural differences.
  3. IP life cycle management: Relying on the continued popularity of top IPs, it is necessary to avoid user aesthetic fatigue.

Conclusion

Pop Mart has successfully won the favor of the capital market with its performance that exceeded expectations, clear globalization strategy and diversified IP ecology. In the short term, the high growth rate of overseas markets and the improvement of domestic operating efficiency will support the stock price; in the long term, it is necessary to observe whether its IP innovation and global landing capabilities can continue to meet expectations. If the 20 billion target is achieved in 2025, the company may further consolidate its leading position in global trendy toys.

*Disclaimer: The content of this article is for learning only, does not represent the official position of VSTAR, and cannot be used as investment advice.