Jinwu Financial News | SPDB International Research indicates that in the past two months, the popularity of Bubble Mart (09992)'s Monsters series IP has risen rapidly, and the number of topics and discussions among consumers has far exceeded the bank's expectations. This was largely due to the star effect and Labubu's rapid spread on social media. The Monsters series revenue increased 292% year-on-year in 1H24, and its share of revenue rose to 13.7%, ranking second among all IPs. Based on the recent rise in popularity, the bank expects Monsters' growth rate in the second half of the year to be much higher than in the first half of the year, and its revenue share is expected to rise to the top. At the same time, Monsters' big sale is expected to drive the company's overall revenue growth rate to continue to accelerate in 4Q24, and also bring more room for imagination for 2025 revenue performance.
The bank said that Bubble Mart's stock price YTD has risen sharply by nearly 300%. This increase has deterred many investors who have yet to hold positions. However, based on the bank's conservative profit forecast for 2025, the current stock price indicates that the company's 2025 P/E is only 22.7x (PEG less than 0.4x). The bank believes that as the certainty of the company's long-term growth trend and growth prospects continues to increase, the company's value will be further recognized by the market, and there is still plenty of room for improvement in the valuation level. Based on a more optimistic long-term growth outlook, the bank raised the long-term growth rate forecast for overseas markets, thereby raising the company's target price to HK$108 (based on DCF), maintaining a “buy” rating, and maintaining Bubble Mart's preferred consumer position.
