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2026-10-15 14:04:29 Citi released a report on China's consumer sector, noting that under a high base in 3Q, investors' focus on POP MART (09992.HK) is whether the company can achieve QoQ improvement after the base reset. However, the broker expects low visibility for QoQ improvement in 3Q, while 4Q may see QoQ improvement driven by seasonality and the effectiveness of organizational capability measures. For BLOKS (00325.HK), new product launches accelerated in 3Q, and the broker expects the company to remain on track toward its 2026 growth target, with early results emerging from overseas expansion, new categories and IP diversification initiatives. For MNSO (09896.HK), despite better-than-expected GMV growth in China during 3Q, slowing overseas operations leave uncertainty for 4Q, while the profit model for overseas and TOP TOY businesses still requires time to optimize. Within the sector, the broker prefers companies with strong proprietary IP operating capabilities that can create sustainable value. Its preference ranking is POP MART (Buy) > BLOKS (Buy) > MNSO (Neutral), with target prices of HKD198, HKD82 and HKD22.2 respectively. Regarding POP MART (09992.HK), the broker expects 3Q revenue to decline about 35% YoY, with the YoY decline narrowing to 17% in 4Q. During the period, the company opened multiple flagship stores, including in Hangzhou, Chengdu, Changsha and Paris, supporting its focus on offline experiences. Citi expects offline channels to remain relatively resilient. The ramp-up of non-LABUBU IPs such as TWINKLE TWINKLE and Zsiga demonstrates the company's multi-IP incubation and operational capabilities, though this is still insufficient to offset the impact of the high base in the short term. As recent challenges have largely been reflected in the share price, market debate is mainly focused on the recovery trajectory after the base reset. The broker expects a recovery may emerge in 2027, while emerging IPs pave the way for growth. For MNSO (09896.HK), the broker expects 3Q revenue to grow 11% YoY, while adjusted net profit may fall 10% YoY. Mainland China GMV accelerated to 25%-30% YoY growth, with same-store sales growth in the high single digits, while overseas operations are expected to slow to low single-digit YoY growth. Large-format stores and the proprietary IP strategy have begun to show results, though they may weigh on profitability in the short term. MNSO's US GMV improved to more than 30% YoY growth in September, with about 20% YoY growth in 3Q, while same-store sales turned positive driven by new products. However, uncertainty remains for 4Q, which is traditionally the peak season for overseas markets and accounts for about 31% of full-year sales, while the China market also faces pressure from a high base. (da/ad)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |