To The Moon

POP MART is set to release its 2026 interim results after the Hong Kong market closes on August 20. Analysts expect the company to report RMB 19.975 billion in revenue for the first half of 2026, with adjusted EPS of RMB 5.046.

In terms of stock performance, POP MART has been on a broadly downward trend since February, with the stock down approximately 18.6% year to date. The market is increasingly focused on the company’s earnings growth and overseas business performance.

As for revenue structure, POP MART generates revenue primarily through three channels: offline channels, online channels, and wholesale & others. Offline channels are the company’s main source of revenue, including retail stores and Roboshops, with retail stores accounting for the largest share. However, retail store revenue is expected to decline in the first half of 2026.

Morgan Stanley has lowered its earnings estimates and price target for POP MART, cutting the target from HK$247 to HK$214, a 13% reduction. The brokerage expects overseas revenue to decline 27% year over year in 2026. However, Morgan Stanley maintained its “Overweight” rating, viewing the overseas business as being in an adjustment phase. Once a recovery in overseas markets is confirmed, POP MART could still have significant room for growth, given that North America and Europe make up roughly 75% of global spending on IP collectibles. Meanwhile, major shareholder Duan Yongping continues to actively trade POP MART shares.

Analysts expect POP MART’s first-half profit growth to slow to its lowest level since 2022. The market will also monitor whether the company can reduce its reliance on Labubu and further diversify its IP portfolio. At the same time, weakening overseas sales could put additional pressure on earnings growth.

From a valuation perspective, POP MART’s price-to-earnings (P/E ratio) stands at 13.87, near its lowest level over the past five years. $POP MART(09992)$