According to results released Oct 21, Pop Mart’s sales in overseas markets surged as much as 370% y-o-y, with the Americas and Europe continuing to serve as key growth engines. Meanwhile, domestic revenue in China also surged around 190%, supported by strong online channel sales.
The growth “significantly exceeded” Zhang’s estimates, thanks to Pop Mart’s newly released plush toy series from intellectual properties such as Labubu and Twinkle Twinkle. The company launched new mini Labubu dolls in late August, fuelling another wave of frenzy for the monster-themed toy.
Pop Mart’s growth continues despite a higher base in 4QFY2024, says Zhang. “We expect the 15th Anniversary, Halloween and Christmas special series to support global sales momentum. Hence, we raise our FY2025 revenue forecast by 24% to RMB40 billion, well above management's prior guidance of RMB30 billion.”
Pop Mart remains on track to open over 60 new stores overseas in 2HFY2025, with a focus on North America, Europe and Southeast Asia. Its new flagship store in Bangkok has drawn robust foot traffic since its August launch, reinforcing brand visibility, according to Zhang.
Investors were jittery prior to the release of the results, and Pop Mart shares have continued to slide since Oct 16. Pop Mart’s shares closed down 8.1% on Oct 21 ahead of the business update, the worst single-day drop since April.
Still, Pop Mart shares are up 157% year to date and some 212% over the past year.
Zhang notes a recent decline in China's secondary market price of some of Pop Mart’s older series products to ongoing restocking and waning demand. “That said, Pop Mart's new launches continue to sell out instantly, and we foresee overseas markets contributing more to future sales.”
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Zhang also anticipates a slowdown in revenue growth from FY2026 onward. Still, he expects Pop Mart to strengthen its overseas presence through the launch of popular intellectual properties (IPs) and new products. “As such, we lift our five-year revenue compound annual growth forecast to 46% from 41%.”
As at 3.03pm, shares in Pop Mart are trading 8.7% lower, or HK$22.40 down, at HK$234.
