POP MART Hits Record High as Brokers Ramp Up Price Targets
Shares of toy giant $POP MART(09992)$
Major Brokers Raise Targets
Deutsche Bank analyst Jessie Xu lifted her price target from HKD200 to HKD303 in a research note, projecting explosive profit growth. The bank forecasts the company will achieve RMB7.91 billion in net income by 2025.
"POP MART's cross-cultural appeal suggests its market potential vastly exceeds prior estimates," the report noted, adding that European and American penetration may be in its infancy. Accelerated global expansion and product diversification could further strengthen profitability.
Morgan Stanley upgraded its target from HKD224 to HKD302, citing POP MART's "robust IP-product flywheel model" as its core strength.
The broker highlighted the company's ability to consistently release high-quality, sought-after products that reignite consumer enthusiasm. This innovation extends beyond hit franchises to a diverse, rapidly iterative IP ecosystem—the foundation for sustainable growth.
Diversified IP Portfolio Drives Results
Star IP Labubu exemplifies this strategy. Its multi-category, fast-refreshing product line generated RMB3 billion revenue in 2024, with the fourth-generation series slated for late 2025 or early 2026. Strong performances from other franchises like Molly and Dimoo—frequently selling out in both China and the US—demonstrate that POP MART transcends single-IP reliance. Its diversified portfolio provides expansive growth runways.
Morgan Stanley emphasized that North America and Europe could match or surpass domestic revenues by 2028-29, becoming pivotal engines. "POP MART's investment thesis parallels Kweichow Moutai," commented one fund manager. "Both represent 'emotional consumption'—POP MART is the young generation's baijiu, while Moutai is the older generation's collectible toy. Their spiritual value eclipses utility."
Valuation Concerns Amid Frenzy
Some investors sound caution. Zhou Wenbo, portfolio manager at Wells Fargo China Consumer 30 Equity Fund, observed: "New consumer stocks attract substantial capital inflows, but stretched valuations create near-term correction risks. However, long-term growth remains intact across early-stage sectors like experiential spending, value-for-money, and overseas expansion."
Hype Spills Over to Peers
The $POP MART (09992.HK)$ frenzy has lifted related stocks. $QuantaSing Group (QSG.US)$ and $DREAM INT'L (01126.HK)$ have surged over 400% and 120% year-to-date respectively.
– $QuantaSing Group (QSG.US)$ entered the collectibles market through its acquisition of Shenzhen-based Letsvan (completed on March 25). Letsvan’s breakout IP "WAKUKU" gained traction following celebrity endorsements. The company reported eight consecutive profitable quarters, with FQ3 2025 revenue hitting RMB571 million and net income at RMB41.14 million.
Notably, talent agency firm Lehua Entertainment Group $YH ENT (02306.HK)$ partnered with Wakuku to establish a "celebrity IP-scarce collectibles-fan economy" closed loop. Their synergy combines artists’ IP resources, Wakuku's platform operations, and Lehua's fan data analytics to enable demand-driven product development. Lehua shares rocketed 380% this year.
– $DREAM INT'L (01126.HK)$ , the world's largest plush toy manufacturer, which supplies Disney, Funko, and Build-A-Bear Workshop among others. Guoyuan International notes that China's rising but still low per-capita toy spending compared to Western markets signals significant growth potential, fueled by expanding consumer demographics and improved IP commercialization capabilities among domestic players.
Despite the momentum, some institutions warn that chasing POP MART now resembles "buying baijiu at peak valuations." Investors should remain cautious as collectible toy exuberance builds.
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