Pop Mart: 1Q26 revenue in line; cut PO and reiterate Neutral

Research evidence excerpt

Pop Mart: 1Q26 revenue in line; cut PO and reiterate Neutral

iQprofile SM Pop Mart

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(CNY Millions) Toys

Sales 13,038 37,120 42,417 49,872 57,909

Gross Profit 8,708 26,765 29,725 35,172 41,194

Sell General & Admin Expense (4,598) (9,853) (11,453) (13,465) (15,636) Company Description Operating Profit 4,154 16,890 17,685 21,228 25,208

Net Interest & Other Income 163 76 27 57 77 Pop Mart is China's No.1 pop toy company, in terms of retail

Associates 48 70 50 50 50 sales value. The company mainly conducts IP production

Pretax Income 4,366 17,037 17,762 21,335 25,335 and pop toy retail business through DTC channel, with 571

Tax (expense) / Benefit (1,057) (4,025) (4,263) (5,120) (6,080) retail stores in 18 countries globally as of 1H25

Net Income (Adjusted) 3,362 13,155 13,599 16,294 19,315

Average Fully Diluted Shares Outstanding 1,332 1,333 1,333 1,333 1,333

Key Cash Flow Statement Data Investment Rationale

Net Income 3,125 12,776 13,229 15,890 18,870 We rate Pop Mart as Neutral. Despite strong 2025, we

Depreciation & Amortization 863 923 2,247 2,463 2,785

believe in three key concerns in 2026: 1) potential

Change in Working Capital 246 (3,311) 1,541 (3,046) 1,732

Deferred Taxation Charge NA NA NA NA NA slowdown in US and EU market. 2) need a pause to address

Other Adjustments, Net 720 331 393 447 508 issues in channels, supply chain, and local operations. 3)

Cash Flow from Operations 4,954 10,718 17,411 15,754 23,895 margin pressure from both overseas mix and raw material

Capital Expenditure (517) (2,264) (2,587) (3,042) (3,532) price. We see 2026 as a transitional year for Pop Mart, with

(Acquisition) / Disposal of Investments 34 0 0 0 0

further operational consolidation and foundation-building