POP MART's net profit in the first half of the year increased by 396.5% year-on-year, with plush product revenue surging by 1276.2% | Financial Report Insights

POP MART's revenue in the first half of the year reached 13.88 billion yuan, a year-on-year surge of 204.4%. Revenue from plush products increased by 1276.2% year-on-year, making it the largest category, accounting for 44.2% of total revenue. THE MONSTERS (core being LABUBU) generated 4.81 billion yuan in revenue, accounting for 34.7% of total revenue, a significant increase from 13.7% in the same period last year.

Gross margin increased to 70.3%, with net profit attributable to the parent company reaching 4.57 billion yuan, soaring 396.5% year-on-year.

On the 19th, POP MART announced its H1 financial report:

• POP MART's revenue in the first half of the year was 13.88 billion yuan, a year-on-year surge of 204.4%, estimated at 13.76 billion yuan.
• Net profit attributable to the parent company was 4.57 billion yuan, soaring 396.5% year-on-year.
• Gross margin increased significantly from 64.0% to 70.3%, indicating a notable enhancement in profitability.

Core Business Progress:

• Overseas Market as the Main Growth Engine: Overseas business revenue reached 5.59 billion yuan, a year-on-year increase of 440%, with revenue share rising from 22.8% to 40.3%. Among them, the Americas market grew by 1142.3%, and Europe and other regions grew by 729.2%, showing significant results from the globalization strategy.

• IP Performance — LABUBU's Rise: THE MONSTERS (core being LABUBU) IP revenue reached 4.81 billion yuan, soaring 668% year-on-year, surpassing MOLLY to become the largest IP, accounting for 34.7% of total revenue, demonstrating the company's strong IP incubation and hit-making capabilities.

• Dramatic Change in Product Structure — Plush Category Ignites the Market: Revenue from plush products reached 6.14 billion yuan, a year-on-year surge of 1276.2%, with revenue share rising from 9.8% to 44.2%, becoming the largest category.

Accelerated Globalization Drives Performance Surge and Profitability Improvement

The company achieved revenue of 13.88 billion yuan in the first half of the year, a year-on-year increase of 204.4%, which is indeed impressive. The company's gross margin increased from 64.0% to 70.3%, mainly benefiting from the increased share of overseas business and product structure optimization Sales expenses reached 3.19 billion yuan, a year-on-year increase of 135.9%, with growth rate basically in sync with revenue growth. Among them, transportation and logistics costs surged from 100 million yuan to 680 million yuan, an increase of 546.7%, mainly driven by overseas business expansion. Employee costs rose from 660 million yuan to 990 million yuan, reflecting the huge demand for human resources due to globalization.

More notably, overseas business contributed 5.59 billion yuan in revenue, accounting for 40.3%, a qualitative leap compared to 22.8% in the same period last year. In the first half of 2024, the Americas had only 10 retail stores, which increased to 41 this year, with pure store expansion bringing significant revenue growth. The real test lies in whether single-store efficiency can be maintained as the store network matures.

The performance in the Americas market is particularly outstanding, with revenue soaring from 180 million yuan to 2.26 billion yuan, an increase of over 11 times. The 257.8% growth in the Asia-Pacific market is also remarkable, but the number of retail stores increased from 39 to 69, with an almost doubled expansion rate.

Plush Products Stand Out, IP Operations Show Divergence

The most striking change is the drastic adjustment in product structure. Revenue from plush products reached 6.14 billion yuan, a year-on-year increase of 1276.2%, becoming the largest category, accounting for 44.2% of total revenue. This is mainly benefited from the global popularity of the LABUBU third-generation rubber plush "High Energy Ahead" series.

More attention should be paid to MEGA, which generated 1.01 billion yuan in revenue, a growth of 71.8%, but its share dropped from 12.9% to 7.3%. Revenue from traditional figurine products was 5.18 billion yuan, although the absolute amount remains considerable, the growth rate was only 94.8%, with its share declining from 58.3% to 37.3%.

THE MONSTERS generated 4.81 billion yuan in revenue, accounting for 34.7% of total revenue, a significant increase from 13.7% in the same period last year, becoming the company's undisputed cash cow. MOLLY generated 1.36 billion yuan, with its share dropping from 17.2% to 9.8%; SKULLPANDA generated 1.22 billion yuan, with its share remaining basically stable; CRYBABY and DIMOO performed relatively steadily. The new IP, Star People, performed brilliantly, with half-year revenue of 390 million yuan, showing a certain IP creation capability.

Ample Cash Flow but Operational Efficiency Under Scrutiny

The company's cash situation is good, with cash and cash equivalents reaching 11.92 billion yuan, a significant increase from 6.11 billion yuan at the beginning of the year. This provides ample financial support for subsequent globalization expansion.

However, there are some noteworthy changes in operational efficiency. Inventory increased from 1.52 billion yuan to 2.27 billion yuan, and although inventory turnover days improved from 102 days to 83 days, the rapid growth in absolute scale reflects challenges in supply chain management. As the proportion of overseas business increases, transportation times lengthen, and the complexity of inventory management significantly increases.

Trade receivables rose from 480 million yuan to 970 million yuan, mainly due to the increase in accounts receivable from online channels. Although turnover days improved from 11 days to 10 days, the doubling of accounts receivable scale requires continuous attention