Pop Mart gains positive recognition from investment banks

Pop Mart International Group Ltd, a China-based trendy collectible toy maker, is receiving optimistic outlooks from major investment banks, fueled by the success of its flagship IP, Labubu and ambitious store expansion initiatives.

JPMorgan recently released a report highlighting Pop Mart's position as a frontrunner in this fast-growing sector. The bank's analysts describe Labubu as emerging as a "super IP", highlighting its major impact on the company's sales trajectory.

They project that Pop Mart's overseas sales will surge by 152 percent year-on-year in 2025, with a compound annual growth rate (CAGR) of 42 percent anticipated from 2025 to 2027. By 2027, these overseas sales could represent 65 percent of the company's total revenue.

The bank predicts a strong performance driven by several key factors: an expanding portfolio of intellectual properties, aggressive store openings, rising productivity, category diversification, and margin enhancements. As a result, Pop Mart's sales and earnings are expected to grow at CAGRs of 44 percent and 56 percent, respectively, from 2024 to 2027.

Furthermore, JPMorgan's earnings per share (EPS) estimates for the years 2025 to 2027 are projected to exceed market expectations by 9 to 15 percent. The bank has initiated coverage on Pop Mart with an "overweight" rating and has set a target price of HK$250 per share.

Morgan Stanley has also revised its sales and adjusted net profit forecasts for Pop Mart for the years 2025 to 2027, increasing their predictions by 5 to 9 percent. The firm anticipates year-over-year growth rates of 98 percent in sales and a 1.14 times increase in net profits for this year.

Morgan Stanley has raised its target price to HK$224, pointing to robust demand for the Labubu product line and Pop Mart's strategic and expansion efforts.

Morgan Stanley said in the report that Pop Mart's expanding supply chain in Vietnam, coupled with its strong demand in the United States, is a positive indicator for the company's resilience. This adaptability may help mitigate potential challenges posed by US tariffs.

As of 11 AM today, Pop Mart's shares are trading at HK$218.4, positioning the company's market capitalization close to HK$300 billion, reflecting strong investor confidence in its growth trajectory.