Foreign banks view POP MART's Q3 report: significantly exceeded expectations, revenue accelerated across the board, overseas "multiple blossoms"

POP MART's third-quarter performance significantly exceeded market expectations, with revenue growth increasing by 245%-250% compared to the same period in 2024. Several foreign investment banks, including Goldman Sachs and Nomura, unanimously believe that POP MART has achieved comprehensive acceleration in both the Chinese and overseas markets, with the overseas business showing a "blossoming" trend.

According to a previous article by Wallstreetcn, POP MART announced its third-quarter financial report on the 21st, showing an overall revenue growth of 245%-250% year-on-year for the third quarter of 2025, with overseas revenue growing by 365%-370%. The Americas market experienced explosive growth exceeding 1265%, Europe and other regions grew by 735%-740%, and the Asia-Pacific market grew by 170%-175%.

On October 22, according to news from the Chasing Wind Trading Desk, Nomura, HSBC, Goldman Sachs, and Citibank all gave positive evaluations of POP MART in their latest research reports, unanimously believing that this impressive performance is due to the continued strength of IP popularity, expansion of supply capacity, and the global explosion of new product sales.

From a market perspective, the Chinese business has significantly accelerated despite a high base, while the overseas market is also "blossoming"—the U.S. market grew more than 12 times year-on-year, Europe maintained high growth, and the Asia-Pacific market, although slightly slowing, remained robust. Foreign banks generally believe that the company has achieved strong expansion in both online and offline channels, with popular IP "THE MONSTERS" and the new star "Twinkle Twinkle" jointly driving sales, laying a solid foundation for annual growth.

The better-than-expected performance has also prompted foreign banks to collectively raise their profit forecasts and target prices. Nomura, Citibank, HSBC, and Goldman Sachs all maintained a "buy" rating, believing that the current range provides an attractive layout window after the recent stock price correction. With the peak season in the fourth quarter, anniversary-themed activities, and the continued strength of new IPs, POP MART's growth visibility remains extremely high.

Third Quarter Performance Exceeds Expectations

POP MART's third-quarter revenue growth reached 245%-250%, further accelerating from 204% in the first half of the year. Nomura pointed out that this growth rate is higher than the consensus expectations in the capital market.

Goldman Sachs stated that based on communication with investors, this performance is significantly above market expectations, likely benefiting from strong IP momentum and enhanced monetization capabilities brought by the expansion of supply capacity.

Citibank believes that this strong growth momentum is mainly attributed to the robust sales performance of new products globally and replenishment measures. HSBC noted that the revenue growth in the third quarter outpaced its early expectation of 185%.

From a market perspective, the growth rate in the Chinese market significantly increased to 185%-190%, far exceeding the 135% in the first half of the year.

Goldman Sachs pointed out that despite the high base, the Chinese market still achieved significant acceleration, and the growth rate far exceeded the 154% year-on-year growth indicated by third-party platform data, with the discrepancy possibly stemming from the timing of revenue recognition for pre-sales and faster growth in other channels.

The accelerated growth in the Chinese market is driven by both online and offline channels. Offline channel growth was 130%-135%, significantly accelerating from 117% in the first half of the year; online channel growth was 300%-305%, far exceeding 212% in the first half of the year Citi believes that the strong growth momentum should be mainly attributed to robust global new product sales and replenishment measures. Nomura points out that the company's more balanced IP growth can alleviate the concentration risk associated with the single IP "THE MONSTERS," while new IPs like "Twinkle Twinkle" are rapidly gaining market recognition.

Overseas Markets "Blooming in Multiple Areas"

All regional markets overseas are showing strong growth trends. Specifically:

U.S. Market: Growth of 1265-1270%, further accelerating from 1142% in the first half of the year. Goldman Sachs believes the U.S. market performance is generally in line with market expectations.

European Market: Growth of 735-740%, basically flat compared to 729% in the first half of the year, maintaining strong growth.

Asia-Pacific Market (excluding China): Growth of 170-175%, slowing from 258% in the first half of the year. Nomura Securities believes this may be due to a high sales base in the region in the third quarter of 2024.

Nomura Securities believes that the accelerated growth in the Chinese market and the rapid growth momentum in the U.S. and European markets are noteworthy. HSBC has raised its compound annual growth rate forecast for overseas market revenue from 2025 to 2027 to 42%.

Diverse IP Portfolio Gradually Taking Shape, High Visibility for Q4 Growth

Nomura Securities believes that Bubble Mart's sustained strong growth momentum stems from its robust IP development and operational capabilities. In addition to the largest revenue contributor THE MONSTERS (LABUBU) continuing to evolve, other major IPs have formed unique IP recognition and target consumer groups.

For example, Twinkle Twinkle is showing strong momentum, while IPs like SKULLPANDA and HIRONO have had more collaborative activities in recent months. Nomura believes that Bubble Mart's more balanced growth across different IPs can alleviate its concentration IP risk on THE MONSTERS.

Citi pointed out that the company has been investing in better products, content, and collaborations to enhance IP influence.

A series of LABUBU marketing activities are underway, including the 10th Anniversary Global Tour "MONSTERS BY MONSTERS: NOW AND THEN" held in Shanghai from October 12 to November 8, a water parade in Victoria Harbour, Hong Kong from October 25 to November 1, and THE MONSTERS art installation at Hong Kong International Airport.

Other iconic IPs are also becoming new growth drivers, especially TWINKLE TWINKLE, which recently saw rapid sell-outs of new product releases and is expected to stand out.

Goldman Sachs believes that the visibility for growth in Q4 remains very high, as it is a peak season, supported by themed product launches (holiday season, 15th anniversary), increased supply capacity (although several series are still in short supply), and the expansion of the store network.

Citi expects that good trends will continue in the upcoming peak season, and holiday season performance may become a short-term catalyst, although growth momentum may slow on a higher base Goldman Sachs emphasized that IP momentum remains a key observation point, with the resilience of secondary market prices in the context of increased supply, the discussion/popularity of new products, and the momentum of non-LABUBU IP all related to investors' confidence in the sustainability of growth.

Investment banks raise profit forecasts, current price levels provide attractive entry opportunities

Based on strong performance in the third quarter, several investment banks have raised their profit forecasts.

Nomura Securities maintained its buy rating and target price of HKD 372, based on a 30 times adjusted price-to-earnings ratio for 2026. The firm kept its sales and profit forecasts for 2025-27 unchanged, expecting a 343% growth in net profit for 2025.

Nomura believes that although market concerns about single IP risks may persist, strong profit growth should support the stock price.

HSBC raised its target price from HKD 379 to HKD 392.50, an increase of 3.6%, while maintaining its buy rating. The firm raised its 2025 net profit forecast by 25% to RMB 13.835 billion, with forecasts for 2026 and 2027 raised by 20% and 17%, respectively.

HSBC expects a compound annual growth rate of 26.2% for net profit and 27.0% for revenue from 2025 to 27. The firm's 2025/26 net profit forecasts are 31%/19% higher than market consensus.

Goldman Sachs raised its 2025 profit forecast by 7%, but lowered its forecasts for 2026-27 by up to 3%. The target price remains unchanged at HKD 350, based on a 25 times price-to-earnings ratio discounted to mid-2026.

Goldman Sachs believes that the better-than-expected performance in the third quarter should enhance investors' confidence in the visibility of profits for 2025, but IP momentum remains a key observation point, which is a potential driver of growth in 2026. The firm raised its 2025 revenue forecast from RMB 36.552 billion to RMB 39.104 billion, an increase of 7.0%.

Goldman Sachs pointed out that the stock price of POP MART has retraced over 20% from its peak after the 1H25 results (while the Hang Seng Index only fell 3%), which the firm attributes to a slowdown in high-frequency data (including secondary market prices and search indices) and recent concerns about slowing growth in the U.S. market.

Citibank raised its target price from HKD 398 to HKD 415, maintaining its buy rating. The firm raised its profit forecasts for 2025-27 by 16.8-17.3% to reflect a more optimistic sales outlook based on IP strength.

Citibank believes that the current stock price pullback provides a better entry opportunity for investors, suggesting that investors pay more attention to sales trends through proprietary channels (rather than the secondary market), as rapid sellouts continue to occur in proprietary channels