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2026-10-30 14:46:33 Daiwa released a research report stating that POP MART (09992.HK) announced its third-quarter operating update and held an investor conference call. Overall sales fell 45% to 50% YoY, broadly in line with market expectations. China market sales declined 25% to 30% YoY, potentially outperforming expectations, with offline sales down 5% to 10% YoY and online sales down 45% to 50%. Sales in Asia-Pacific, the Americas, and Europe and other regions declined 65% to 70%, 70% to 75%, and 50% to 55% YoY, respectively. Daiwa noted that total sales still fell about 10% QoQ, but the worst quarter in terms of YoY decline may have passed. Comparison base for the fourth quarter will become easier, while seasonality may support a QoQ sales recovery. Even assuming fourth-quarter sales remain similar to the third quarter, YoY sales decline is expected to narrow to around 35%. China offline business remained resilient, with new members recording double-digit YoY growth and returning to positive QoQ growth. Management expects China sales to return to positive YoY growth in 2026, while the fourth quarter is expected to improve QoQ. Overseas markets are still digesting the high base created by last year's Labubu boom, although offline traffic has shown preliminary signs of stabilization, with some trends improving in October. Europe recorded positive QoQ sales growth in the third quarter. The broker said the company expects gross margin in 2H26 to decline by less than 2 ppts HoH, due to a lower contribution from high-margin overseas markets and price adjustments for certain local products. Operating expense ratio is also expected to rise HoH to support store expansion. Based on market consensus forecasts, the stock is currently trading at about 13x forward 12-month P/E, while market expectations for 2026 to 2027 may still face downward revision pressure. Investors may wait for a turning point featuring visible business growth recovery and more attractive valuation. Daiwa did not assign a rating or TP for POP MART (09992.HK). (da/j)~ 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. | |