Foreign investment banks view Pop Mart's third-quarter report: Significantly exceeding expectations, comprehensive revenue acceleration, and overseas "blossoming in many areas"

Foreign investment banks view Pop Mart's third-quarter report: Significantly exceeding expectations, comprehensive revenue acceleration, and overseas "blossoming in many areas"

Pop Mart’s third-quarter results significantly exceeded market expectations, with revenue growth of 245%-250% compared to the same period in 2024. Multiple foreign investment banks including Goldman Sachs and Nomura unanimously believe that Pop Mart has accelerated comprehensively in both the Chinese and overseas markets, with overseas business showing a “multi-point blossoming” trend.

According to a previous article by Wallstreetcn, Pop Mart disclosed in its Q3 financial results on the 21st that total revenue in Q3 2025 grew 245%-250% year-on-year, with overseas revenue growing 365%-370%. The Americas showed explosive growth of over 1265%, Europe and other regions grew 735%-740%, and the Asia-Pacific region grew 170%-175%.

On October 22, according to Zhuifeng Trading Desk, Nomura, HSBC, Goldman Sachs, and Citi all gave Pop Mart positive reviews in their latest research reports, unanimously believing that this outstanding performance was driven by sustained IP popularity, expanded supply capacity, and explosive global sales of new products.

Market segmentation shows that the China business continued to notably accelerate from a high base, while overseas markets saw “multi-point blossoming”—US grew more than 12 times year-on-year, Europe maintained strong growth, and Asia Pacific slowed slightly but remained robust. Foreign banks generally believe that the company achieved strong expansion both online and offline, with hot IP “THE MONSTERS” and rising star “Twinkle Twinkle” jointly driving sales and laying a solid foundation for annual growth.

Results exceeding expectations prompted foreign banks to collectively raise profit forecasts and target prices. Nomura, Citi, HSBC, and Goldman Sachs all maintain their “Buy” ratings, stating that after the recent stock price pullback, the current range presents an attractive entry window. With Q4’s peak season, anniversary-themed activities, and continued IP efforts, Pop Mart’s growth visibility remains very high.

Q3 Results Fully Exceed Expectations

Pop Mart’s Q3 revenue growth reached 245%-250%, further accelerating from 204% in the first half. Nomura points out this growth rate is above consensus market expectations.

Goldman Sachs said that based on investor communications, this result significantly exceeded market expectations, possibly benefiting from strong IP momentum and improved monetization from expanded supply capacity.

Citi believes the strong growth is mainly attributed to strong global sales of new products and restocking measures. HSBC notes that Q3 revenue growth outpaced its earlier 185% forecast.

By market segment, growth in the Chinese market jumped to 185%-190%, far above the 135% of the first half.

Goldman Sachs notes that despite a high base, the Chinese market’s acceleration significantly outpaced third-party platforms’ data showing 154% year-on-year growth, with the discrepancy possibly due to timing of pre-sale revenue recognition and faster growth in other channels.

The acceleration in the Chinese market was jointly driven by online and offline channels. Offline channel growth was 130%-135%, a clear acceleration from 117% in the first half; online channel growth was 300%-305%, much higher than the 212% of the first half.

Citi believes that the strong growth momentum should mainly be attributed to robust global sales of new products and restocking measures. Nomura notes the company’s more balanced IP growth mitigates concentration risk on a single IP, “THE MONSTERS,” while new IPs like “Twinkle Twinkle” are quickly gaining market recognition.

Overseas Markets “Multi-point Blossoming”

Overseas regions all showed strong growth. Specifically:

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

Europe Market: Growth of 735-740%, basically flat from 729% in the first half, maintaining strong growth.

Asia-Pacific (excluding China): Growth of 170-175%, slowing from 258% in the first half. Nomura Securities believes this may be because the sales base in Q3 2024 was relatively high.

Nomura Securities believes that the acceleration in China and rapid growth in the US and Europe are remarkable. HSBC raised its composite overseas revenue growth forecast for 2025-27 to 42%.

Diversified IP Portfolio Gradually Shaping, Q4 Growth Visibility Remains High

Nomura Securities believes Pop Mart’s continued strong growth is driven by robust IP development and operation capabilities. Besides its biggest revenue contributor THE MONSTERS (LABUBU), which continues to evolve, other major IPs have established recognized identities and target consumer groups.

For example, Twinkle Twinkle shows strong momentum, while IPs like SKULLPANDA and HIRONO have had more collaborations recently. Nomura believes Pop Mart’s more balanced IP growth alleviates concentration risk on THE MONSTERS.

Citi notes the company has consistently invested in improved products, content, and collaborations to enhance IP influence.

A series of LABUBU marketing campaigns are underway, including the 10th Anniversary Global Tour “MONSTERS BY MONSTERS: NOW AND THEN” held in Shanghai from Oct 12 to Nov 8, a water parade at Hong Kong’s Victoria Harbour from Oct 25 to Nov 1, and THE MONSTERS art installations at Hong Kong International Airport.

Other signature IPs are also emerging as new growth drivers, especially TWINKLE TWINKLE, with new product launches selling out quickly and poised to stand out.

Goldman Sachs believes growth visibility for Q4 remains very high as it’s a peak season, with themed product launches (holiday season, 15th anniversary), expanded supply capacity (although multiple series remain in short supply), and store network expansion bolstering growth.

Citi expects the good trend to continue in the coming peak season, with holiday season performing as a potential short-term catalyst, although growth momentum may slow on a higher base.

Goldman Sachs emphasizes that IP momentum remains a key observation point—the resilience of secondary market prices amid increased supply, discussion/popularity of new products, as well as momentum of non-LABUBU IPs, all relate to investor confidence in sustainability of growth.

Investment Banks Raise Profit Forecasts, Current Price Presents Attractive Entry Opportunity

Based on Q3's strong performance, multiple investment banks have raised profit forecasts.

Nomura Securities maintains its Buy rating and target price of HK$372, based on 30x estimated 2026 adjusted PE. It keeps sales and profit forecasts for 2025-27 unchanged, expecting net profit growth of 343% in 2025.

Nomura believes that, despite ongoing concerns over single-IP risk, strong profit growth should support the share price.

HSBC raised its target price from HK$379 to HK$392.50, by 3.6%, maintaining Buy rating. It raised net profit forecasts for 2025 by 25% to RMB 13.835bn, and for 2026 and 2027 by 20% and 17%, respectively.

HSBC projects a compound annual growth rate of 26.2% for net profit and 27.0% for revenue over 2025-27. Its net profit forecasts for 2025/26 are 31%/19% higher than consensus.

Goldman Sachs raised its 2025 profit forecast by 7% but lowered its 2026-27 outlook by up to 3%. Its target price stays at HK$350, based on 25x estimated 2027 PE discounted to mid-2026.

Goldman Sachs believes Q3 results exceeding expectations should boost investor confidence in 2025 profit visibility, but IP momentum remains a key observation point and is a potential growth driver for 2026. It raised its 2025 revenue forecast from RMB 36.552bn to RMB 39.104bn, a 7% increase.

Goldman Sachs notes Pop Mart's share price has pulled back by more than 20% from its 1H25 results peak (while the Hang Seng China Enterprises Index only fell by 3%), which it attributes to a slowdown in high-frequency data (including secondary market prices and search index) and recent concerns about US market growth slowing.

Citi raised its target price from HK$398 to HK$415, maintains Buy rating. It raised 2025-27 profit estimates by 16.8-17.3%, reflecting a more optimistic sales outlook based on IP strength.

Citi believes that the current share price pullback offers investors a better entry opportunity, recommending investors focus more on proprietary channel sales trends (rather than secondary market), as fast sell-outs are consistently seen through proprietary channels.

 

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Above highlights are from Zhuifeng Trading Desk.

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