$POP MART(09992.HK) Dolphin Research briefly discusses Pop Mart's recently released 25H1 semi-annual performance forecast, which overall has once again exceeded Dolphin Research's expectations.

First, let's look at the performance. Revenue in the first half of the year grew by no less than 200%. Compared to the company's Q1 performance released in April (revenue increased by 165%-170% year-on-year), this means that Q2 accelerated again on the basis of Q1. The acceleration in revenue, combined with the release of operating leverage, resulted in Pop Mart's profit growth of no less than 350%.

The essence behind such "explosive" performance is still the accelerated release of the product cycle brought about by the continuous surge in the global popularity of Pop Mart's IP. Although the forecast did not disclose specific domestic and overseas performance, Dolphin Research speculates that the sequential acceleration in Q2 was mainly contributed by the overseas market. On one hand, based on channel research information, the current number of overseas stores has exceeded 180, with North America surpassing 50 stores, doubling the number at the beginning of the year. Additionally, from the perspective of single-store efficiency, as Labubu has become a sensation in the overseas market, sparking a buying frenzy, combined with the company's increased proportion of high-premium categories such as Tanggou plush and MEGA, Dolphin Research speculates that the efficiency of overseas stores has comprehensively accelerated.

Finally, returning to valuation, based on this performance forecast, Dolphin Research has revised up its earnings forecast. From a relative valuation perspective, since the company's performance in 2025 and 2026 is still in a high-growth phase, Dolphin Research assumes in a neutral scenario that this wave of Labubu's product cycle will continue until 2026, with single-store efficiency entering a stable growth period starting in 2027. Therefore, we use 2026 as a time node, assigning a 28x PE (Dolphin Research's calculated CAGR for 2026-2029), and then discount it back to the present at a WACC of 12.8%, corresponding to a stock price of 330 (excluding net cash). The DCF calculation is basically consistent with the relative valuation calculation, indicating at least a 25% upside potential in the stock price.