FIRST SHANGHAI: Gives POP MART (09992) a "buy" rating with a target price of HK$400.

FIRST SHANGHAI released a research report, stating that based on POP MART's (09992) Q3 revenue performance exceeding expectations and strong outlook for Q4 peak season, the profit forecast for 2025-2027 has been raised to 13.29/19.78/25.2 billion yuan, with a target price of 400.0 Hong Kong dollars, equivalent to 35.8/24.1 times PE for the 25/26 fiscal year profit forecast, with a 75.3% increase from the current stock price, and a buy rating. In 2025Q3, the company's operating income increased by 245%-250% year-on-year, with domestic revenue growing by 185%-190%, and overseas revenue growing by 365%-370% year-on-year, outperforming expectations. Key points from FIRST SHANGHAI: Impressive performance in domestic online business In terms of domestic channels, offline revenue in Q3 increased by 130-135% year-on-year, mainly benefiting from the continuous optimization of store experience and overall improvement in operational efficiency. Online channels performed exceptionally well, with a 300%-305% increase year-on-year, mainly due to the efficient conversion of live streaming e-commerce, deep operation of private traffic such as Lucky Boxes, and the contribution of some Q2 pre-sale orders recognized as revenue in Q3. Continued explosive growth in overseas business, with the Americas as the main growth engine In 2025Q3, overseas revenue continued to grow at a high rate, with the Asia-Pacific region (excluding China) growing by 170%-175% year-on-year, the Americas growing by 1265%-1270% year-on-year, and Europe and other regions growing by 735%-740% year-on-year. In terms of overseas offline channels, the company continues to open new stores and expand market coverage rapidly. As of August 20, 2025, the number of overseas stores has reached 140, and it is expected to reach 200 by the end of the year. Looking ahead, the company plans to explore new emerging markets such as the Middle East, Central Europe, and Central and South America, while advancing flagship store layout in global core cities such as Paris, Sydney, Milan, and New York. Hot sales of new products, diversified IP efforts The market heat for the company's new products continues to rise, with strong growth momentum. The Halloween-themed Why So Serious plush toy series launched on October 9 quickly sold out, with several regular products selling at several times the original price. Among them, the serialization of the "Star People" has rapidly increased market heat and consumer acceptance. In the Why So Serious series, the secondary market premium for "Star People" reached 99%, second only to LABUBU's 215%, significantly higher than other IPs. Meanwhile, the collaboration series of SKULLPANDA and the popular TV series "Wednesday" launched in the North American market quickly became a social media hot topic, effectively promoting brand awareness and breaking into new markets. Q4 peak season catalyst, abundant growth momentum Looking ahead to Q4, the domestic market will welcome the annual e-commerce promotions such as "Double Eleven" and "Double Twelve," while overseas, the traditional peak consumption season of Halloween, Thanksgiving, and Christmas is approaching. The company is expected to launch multiple holiday-themed new products and replenish popular items, which is expected to reignite the purchasing enthusiasm of global fans and provide strong support for Q4 performance. Risk factors: 1) Overseas expansion falling short of expectations; 2) New product sales falling short of expectations; 3) Intensified competition.