PopMart expands overseas markets despite the poor business conditions.
China’s pop culture and art toy company Pop Mart (9992:HK) share price opened low and continued to plunge on July 18, once falling more than 16% during the day. By the end of the day, PopMart shares fell 12.89% to close at HKD 22.3 apiece, hitting a new record low price since IPO.
According to Wind, PopMart's share price fell by over 40% from July 11 to July 18, coupled with nearly HKD21 billion market value evaporating; this was to some extent in accordance with the general downward economic conditions.
Pop Mart pointed out that due to the recurrence of Covid-19 in the first half of the year, not only were some of its offline stores and robot stores suspended, but delivery delays also exerted a negative impact on online orders, which, coupled with lower consumer spending intentions and foot traffic, led to a decline in performance growth.
It is noteworthy that Pop Mart seems to be looking for a "new story" although the first half of the year saw its poor performance results.
In early July this year, Pop Mart opened its first overseas flagship store in Seoul, South Korea, and on July 16, the first store in Japan landed in Shibuya, Tokyo. Previously, Pop Mart has made its presence in Europe, Oceania, and the United States. The company's management revealed as of July 17, Pop Mart has operated 26 overseas stores, including 12 long-term contracted ones and 14 pop-up stores.
However, an anonymous analyst said that the first-day results of overseas stores were related to the company's local placement and marketing strategy in the early stage, and did not reflect the real situation of the overseas market. “Blind overseas expansion will probably affect the profitability of the company.”
A bunch of art toy brands has received a fair share of attention for their roles in helping to fulfil people’s gambling psychology and emotional value. They include TOPTPY, Suplay, and MINISO (9896:HK), IP Station, ToyCity, Xinghui Creations, IPSTAR, Alpha Group (002292:SZ), 52Toys, to name but a few.
As of press time, Pop Mart closed at HKD 22.350 apiece, with a total market value of HKD 31.24 billion.