Pop Mart’s revenue surged 165-170% YoY in 1Q25, exceeding market expectation, with domestic and overseas markets soaring 95-100% and 475-480% YoY, respectively, propelled by the continued refined operations across all channels, a booming fan base and new product launches. The two key overseas markets, America and Europe, demonstrated exceptional growth in 1Q25 (>600% YoY), laying a strong foundation for achieving the target of 100% overseas revenue growth for the full year. In addition, we believe the recently announced organisational restructuring will further enhance internal efficiency and support the company’s solid overseas expansion. Maintain BUY.
Key Factors for Rating
1Q25 revenue beat market expectation. Pop Mart delivered impressive
performance in 1Q25, with total revenue rising 165-170% YoY in 1Q25. Domestic and overseas markets surged 95-100% and 475-480% YoY, respectively. Regarding domestic market, the growth of offline channels (retail stores and roboshops) accelerated to 85-90% YoY in 1Q25, compared to 55% YoY in 2H24, thanks to refined in-store operations and new product launches, such as Ne Zha Born Bonds Series. Meanwhile, online channels in domestic market maintained decent growth at 140-145% YoY, up from 127% YoY in 2H24, attributable to a booming fan base and a low comparable base. Overseas segment continued its remarkable expansion, with revenue lifting 475-480% YoY in 1Q25. Asia Pacific, America and Europe soared 345-350%, 895-900% and 600-605% YoY, respectively. America and Europe, which are the key focus regions for 2025, have begun to show significant potential. While there could be potential pressure on the American market under the tariff threats, we expect the impact to the demand could be manageable due to: (i) higher margins in the US with affordable tag price, and (ii) strong demand as seen in 1Q25 figures.
Adjustment of organisational structure. Pop Mart has recently announced an upgrade to its global organisational structure, the key focus of which is advancing regional strategy, as the company has decided to establish regional headquarters in four areas, namely Greater China, the Americas, Asia-Pacific and Europe. In addition, Justin Moon, Senior Vice President of the company, will concurrently serve as co-COO, working alongside Si De (co-COO) to jointly oversee the operations of the overseas business. The core rationale behind this restructuring is to enhance operational efficiency, standardise departmental functions and promote talent mobility. We believe this move also highlights the crucial role of overseas market as Pop Mart’s second growth engine, while the company aims to leverage its extensive domestic experience to address potential challenges and drive success internationally.
Key Risks for Rating
Downside risks: (i) fierce competition and change in consumer preference; (ii) deteriorated brand equity; (iii) inability to secure popular IPs; (iv) tariff hikes and other regulatory uncertainty; and (v) commodity inflation.
Valuation
We maintained our 2025-26 earnings forecasts and TP of HK$192.1, based on 40x 2025E P/E (or 28x 2026E P/E).