Pop Mart released its interim performance report last night in the August 21st issue of the STAR Daily.

The financial report shows that in the first half of 2024, Pop Mart achieved a revenue of 4.56 billion yuan, a year-on-year increase of 62.0%, and an adjusted net profit of 1.018 billion yuan, a year-on-year increase of 90.1%.

Specifically, the revenue from Mainland China's business reached 3.21 billion yuan, an increase of 31.5% year-on-year; the revenue from the Greater China region and overseas market has reached 1.35 billion yuan, a significant increase of 259.6% year-on-year. Its revenue accounts for approximately 29.7%, a significant increase compared to the same period last year.

At today's 2024 half-year earnings conference, Wang Ning, Chairman and CEO of Pop Mart, said that Pop Mart has entered the era of large-scale play.

"In recent years, Pop Mart has been working hard to try to enter more areas, develop many products and categories, and is no longer simply understood as figurines." Wang Ning also stated that overseas growth has exceeded expectations, achieving the goal of 'recreating another Pop Mart overseas' several months in advance. More importantly, the products have truly attracted a large number of fans overseas, and the popularity of the products has exceeded expectations.

Today, Pop Mart's closing price soared by 10.51%, closing at HK$46.25, with a total market value of HK$62.111 billion.

Molly has become the most popular IP again.

From the perspective of products, the revenue of Pop Mart's self-owned products increased by 69.5% from 2.586 billion in the first half of 2023 to 4.383 billion RMB in the first half of this year; in terms of the proportion of revenue from self-owned products, it increased from 91.9% in the first half of 2023 to 96.2% in the first half of 2024. The proportion of revenue from outsourcing and other products decreased to 3.8%, and the outsourcing of goods will continue to decrease.

IP is still the core business of Pop Mart. The financial report shows that in the first half of this year, Molly, Skullpanda, Dimoo, and The Monsters are still the main IPs, contributing more than half of the revenue. There are 7 IPs with a revenue of over 100 million yuan.

Molly, launched in 2016, is still the most vibrant IP, with a year-on-year revenue growth of nearly 90% to 0.78 billion yuan, accounting for 17.2% of the total revenue. Skullpanda was the highest revenue IP for Pop Mart last year, but its proportion in the first half of this year dropped to third place at 12.6%. Dimoo also experienced a slowdown in growth rate. The Monsters had the fastest revenue growth, with a year-on-year increase of 292% to 0.63 billion yuan.

The lifecycle of trendy toys is not long, and Pop Mart's strategy is to expand the 'trendy IP' scene and enhance consumers' love and loyalty to the IP.

In recent years, Pop Mart has created a immersive IP theme park, including the first immersive IP theme park in the domestic trendy toy industry, incorporating MOLLY, DIMOO, and other trendy toy images into the game 'Dream House,' as well as self-developed mobile games such as 'Dream House,' continuously expanding the content boundaries of trendy IPs and exploring greater commercial growth.

'Molly's revenue changes are driven by operational capabilities. An outstanding IP can continue to create value and have continuous commercial value. The core is continuous investment and operation in the IP,' said Wang Ning in the financial report analysis.

Business growth will not be achieved through price wars.

In the first half of this year, Pop Mart's mainland China business achieved revenue of 3.21 billion yuan, a year-on-year growth of 31.5%.

Offline business is the foundation of pop mart. As of June 30, 2024, 20 new offline stores have been opened, increasing the number of stores from 363 at the end of last year to 374. The number of robot stores is 2189, a decrease of one compared to the end of last year.

According to the financial report, the first half of the year saw offline store revenue of 1.47 billion yuan, a 24.7% year-on-year increase, and robot store revenue of 0.31 billion yuan, a 16.2% year-on-year increase.

In the online channels, content e-commerce has built multiple self-operated live broadcast rooms focusing on different product categories and usage scenarios based on IP, products, and user characteristics, achieving a revenue of 0.21 billion yuan, a 90.7% year-on-year growth. Pop mart's vending machines achieved a revenue of 0.399 billion yuan in the first half of the year, with a positive year-on-year growth rate. The Tmall flagship store continued its growth momentum, achieving a revenue of 0.199 billion yuan, a 28.1% year-on-year growth.

As of June 30, 2024, the total number of registered members in mainland China increased from 34.354 million at the end of last year to 38.927 million, with an additional 4.573 million registered members. Membership sales accounted for 92.8% of the first half of the year.

In the first half of this year, with the continuous changes in the domestic retail industry due to the economic downturn, pop mart, as a non-essential product, will seek to capture the market through pricing strategies.

"We will not lower the unit price, open more stores to achieve growth in quantity for the entire business, but hope to bring a better service and product experience to everyone, which is the core concept," Wang Ning replied to investors at the earnings conference.

Recreating a pop mart overseas

In this year's interim report, for the first time, pop mart has broken down the revenue from its overseas business by region, with all regions achieving a growth rate of over three digits. In the first half of this year, the revenue from pop mart's overseas business was 1.35 billion yuan, a significant increase of 259.6% year-on-year, accounting for approximately 29.7% of its total revenue, a substantial improvement compared to the same period last year.

Among them, Southeast Asia is the largest and fastest growing overseas market for Pop Mart, with a year-on-year revenue growth of 478% to 0.56 billion yuan in the first half of the year, accounting for 40% of overseas income; East Asia and Hong Kong, Macao, and Taiwan region is the second largest market, accounting for 35%; the North American market achieved revenue of 0.18 billion yuan, accounting for 13.2% of income, with a year-on-year growth of 377.7%; the Europe, Australia, and other markets achieved revenue of 0.14 billion yuan, accounting for 10.3% of income, with a year-on-year growth of 158.8%.

At the earnings conference this morning, according to Wang Ning's disclosure at the conference, considering the dense marketing nodes in the overseas market in the second half of the year, revenue is expected to exceed the first half of the year. According to internal team discussions, the fourth quarter's overseas market revenue is expected to exceed 40%, and even if the performance is good in the Christmas month, it is expected to exceed 50%.

As of June 30, 2024, Pop Mart's Hong Kong, Macao, Taiwan, and overseas stores reached 92 (including joint ventures), and the Siasun Robot&Automation stores reached 162 (including joint ventures and franchises). Pop Mart revealed at the earnings conference that in the first half of 2024, offline stores in Hong Kong, Macao, Taiwan, and overseas accumulated revenue of 0.89 billion yuan, a 441.5% increase from the same period last year, accounting for 66% of total overseas business revenue.

"Overseas e-commerce is one of the very important channels for overseas business. Through overseas e-commerce, we reached more than 100 countries and regions, reaching some countries that offline stores cannot reach, providing important indicators for future business expansion to those countries." Wen Deyi, International Business President of Pop Mart, said in the financial report earnings.

"We have been focusing on the Southeast Asia region since the beginning of our overseas business. Starting from Singapore, to Malaysia, the third stop is Thailand. We have captured some signals through some data, Thailand's market is good, two aspects of the data, first is e-commerce data, the second is offline data." Wen Deyi said, not only in the Thailand market, but also in some other markets such as Indonesia, the Philippines, Vietnam, and so on, all have great potential.

It is reported that Pop Mart plans to further expand its existing business and try new business models, such as new categories (gaming) and incubating new brands.