Goldman Sachs: Pop Mart’s stock price volatility is due to its volume expansion strategy; demand has not weakened, Miniso’s IP incubation is progressing smoothly, and valuations remain attractive.

Goldman Sachs: Pop Mart’s stock price volatility is due to its volume expansion strategy; demand has not weakened, Miniso’s IP incubation is progressing smoothly, and valuations remain attractive.

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According to Chasewind Trading Desk, Goldman Sachs' latest tracking report on China's IP retail and toy industry shows that the industry displayed clear strategy differentiation in August. This change marks an important turning point, reflecting the shift from high-frequency data-driven trends to a return to fundamentals.

Specifically, Goldman Sachs stated that Pop Mart experienced a correction in price premiums, but improved monetization by increasing product volume; Blue Orca accelerated its product launch pace; MINISO’s proprietary IP performed impressively, and its valuation recovered to a high double-digit 2025 P/E ratio.

Goldman Sachs also adjusted target prices: Pop Mart’s target price is set at HKD 350, MINISO’s is raised to USD 29/HKD 56 (based on 20x 2025-26 P/E), and Blue Orca’s is lowered to HKD 93 (based on 22x 2025-26 P/E).

Goldman Sachs adjusted target prices based on different companies' growth prospects. The upward revision for MINISO reflects improved growth prospects, with 2025 P/E raised from 19x to 20x for 2025-26. Blue Orca was downgraded due to the need to wait for greater visibility into new product lines, which will be key to future revenue growth.

Pop Mart: Strategy Adjustment Behind Price Premium Correction

Pop Mart's stock price fluctuated in August, mainly reflecting market concerns over slowing high-frequency data, particularly secondary market price changes. The Labubu Big Into Energy series had limited premiums, and the mini Labubu series launched with lower premiums than previous ones.

Key data shows a strategic change:

The first batch of mini Labubu reached around 1 million units, significantly higher than previous series, supporting revenue growth. In the secondary market, the Macaron/Have a Seat series had premiums of 40%-60%/single digits to 30%, and the Big Into Energy series generally had single digit premiums. Most mini Labubu SKUs had premiums ranging from single digit up to 65% (half of the SKUs were below 25%).

Goldman Sachs believes that this correction is more related to increased monetization by the company, and strong earnings will continue to support valuation.

Blue Orca: Accelerated Product Launch, New Product Lines as Key

Blue Orca accelerated new product launches in August, releasing over 50 SKUs—more than double July’s figure. New products mainly focused on existing IPs, such as the 15th Ultraman Galaxy Series, the 4th Transformers RMB 9.9 series, among others.

Notably, the adult product line improved, with adult product sales on Tmall flagship store growing month-on-month compared to July, and new launches supporting sales growth for Hatsune Miku and Pokémon. The newly launched RMB 99 Naruto product sold about 1,500 units in August.

Goldman Sachs noted that new product lines (including female and adult lines) will play an important role in accelerating growth in the second half, but attention should be paid to channel penetration and brand awareness among new customer demographics.

MINISO: In-house IP Success, Valuation Recovery

After MINISO’s Q2 results beat expectations, its valuation reverted to a high double-digit 2025 P/E, but relative to growth prospects, it’s still not expensive. New initiatives in in-house IPs have become a key focus for management and investors.

Highlights in the IP business: Yoyo product launches were successful, with management projecting this year’s sales to reach RMB 40 million. The subsequent launch of Kumaru blind box products also received positive market feedback. MINISO Park in Guangzhou recorded RMB 16 million in revenue in August, and the Shanghai MINISO Park also recorded RMB 16 million in the same month.

Looking at overseas markets, US labor data was weak and below expectations, but companies generally reflected that consumer demand remains resilient. Goldman Sachs' US team pointed out that consumers are increasingly prioritizing novelty and fashion, and are willing to pay full price for must-have items, which is a positive signal for IP-related companies.

Specific data: MINISO US credit card sales grew by 97%, slightly slowing from 98% in Q2. Top Toy opened its first Japanese store in Tokyo Sunshine City, achieving first-day sales of JPY 11 million (about RMB 500,000). Pop Mart’s Google Index and secondary market prices in the US market continue to slow down.

 

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