Jingu Wealth Information | Shen Hong Wanyuan issued a research report stating that Pop Mart (09992) has a positive profit forecast for 24H1 and its performance is better than expected. The company expects to achieve a year-on-year increase of 55% in revenue and 90% in net income for 1H24. The better-than-expected performance is mainly attributed to: 1) Global recognition of IP has improved, the expansion of product categories has promoted revenue growth, and overseas revenue has increased significantly; 2) Cost optimization, strengthened cost control, and improved profitability. According to the profit forecast, the company's profit margin in 1H24 will improve, continuously optimizing product costs, strengthening cost control, improving profitability, and significantly enhancing the scale effect to increase profits. According to Interface News, in January 2024, Pop Mart's self-built Vietnamese factory will be put into operation and the company is expected to gradually internalize the production process in the future, continuously strengthen cost control, and improve gross profit levels.
The bank also pointed out that the logic of Pop Mart's explosive IP expansion + category expansion + channel expansion has been continuously verified; overseas new store expansion has accelerated, and the successful experience of replicating IP expansion and category expansion has been achieved. The bank has updated Pop Mart's profit forecast and raised its revenue expectations for 2024-2026 to 10.101 billion, 12.916 billion, and 15.458 billion (previously 8.664 billion, 10.981 billion, and 13.141 billion), considering the continuous optimization of the company's supply chain, and the accelerated increase in the proportion of high-gross-margin overseas business. The bank also raised its forecast for Pop Mart's Non-IFRS adjusted net profit attributable to shareholders for 2024-2026 to 2.092 billion, 2.734 billion, and 3.297 billion (previously 1.739 billion, 2.26 billion, and 2.735 billion). The bank maintains a “buy” rating.