Pop Mart International continues to capture attention in the world of intellectual property (IP) merchandising. The company is experiencing a surge in demand for its toys, particularly those based on China's blockbuster film, Ne Zha 2. As of late Thursday, Ne Zha 2 surpassed The Battle at Lake Changjin in all-time ticket sales, collecting more than 6.5 billion yuan (US$892 million). This success has fueled Pop Mart's market performance and expansion efforts.
Pop Mart has been strategically expanding its presence, operating 85 stores and 143 vending machines across Hong Kong, Macau, Taiwan, and other overseas markets. This represents more than double the number of locations compared to a year earlier. Despite this growth, revenue from third-party IPs like Ne Zha accounts for only 15 to 20 percent of Pop Mart's total revenue.
The company's shares took a slight dip, falling 2.1 percent to HK$99.40 on Thursday. However, Pop Mart's market value remains robust at HK$133.5 billion. The company's sales outside China have seen a remarkable increase of 260 percent, reaching 13.5 billion yuan. Revenue from international markets constitutes almost 30 percent of Pop Mart's total earnings.
In the first half of 2024, Pop Mart reported a 70 percent surge in earnings, totaling 3 billion yuan. Bolstered by the success of Ne Zha 2, the company plans to release the film in additional countries, including the United States, Canada, Australia, and Singapore later this month. This move is expected to further enhance Pop Mart's global footprint and drive revenue growth.
Pop Mart has increased production to improve brand accessibility and enhance the fan experience. The company's strategy aligns with the expectations of analysts at Morgan Stanley.
"We expect Pop Mart to become one of the go-to partners for global major IP owners that intend to monetise and extend IP popularity through IP toys," – Morgan Stanley analysts including Dustin Wei and Carol Xia
Morgan Stanley also noted the continued popularity of Labubu’s plush toys, even amidst Pop Mart's diverse offerings.
"We see Labubu’s plush is still selling very well, with restocked products gone fast," – Morgan Stanley
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