POPMART's First Quarter Revenue Surges by 40%

Consumer Staples Author: EqualOcean News, Jiahui Liao Editor: Yiru Qian Apr 23, 2024 06:28 PM (GMT+8)

POPMART's overseas business experiences rapid growth.

Pop Mart products

On April 22, POPMART (09992:HK) disclosed its performance for the first quarter of 2024. The financial report indicates that the company's overall revenue for the first quarter of 2024 increased by 40% to 45% year-on-year. Specifically, revenue from mainland China saw a 20% to 25% year-on-year growth, while the performance in Hong Kong, Macau, Taiwan, and overseas markets continued to shine with a 245% to 250% year-on-year increase.

The outstanding performance has driven the company's stock price to reach a new phase of highs. Since hitting a low of CNY 16.9 on February 5th this year, the company's stock has nearly doubled in a little over two months, accumulating an increase of nearly 98%.

In detail, concerning offline channels, in the first quarter, POPMART's retail stores saw a 20% to 25% year-on-year growth, robot stores experienced a 15% to 20% year-on-year increase, and wholesale and other channels grew by 50% to 55% year-on-year. According to the company's previously released financial reports, in 2023, POPMART opened 55 new offline stores in mainland China, increasing the total number of stores to 363. Additionally, 123 new robot stores were established, bringing the total number of robot stores to 2190. Furthermore, POPMART continues to explore the potential for realizing IP value through offline avenues. In September 2023, POPMART's urban theme park landed in Beijing Chaoyang Park, becoming the first immersive IP-themed park in the trendy toy industry.

Regarding online channels, in the first quarter, POPMART's blind box vending machine mini-program saw a 0% to 5% year-on-year growth, showing a slight recovery compared to a 40% to 45% year-on-year decline in the same period last year. E-commerce platforms and other online platforms experienced a 20% to 25% year-on-year growth. Specifically, the Tmall flagship store saw a 0% to 5% year-on-year growth, marking a significant rebound from a 40% to 45% year-on-year decline in the same period last year. Additionally, in the first quarter, POPMART's Douyin flagship store saw a 95% to 100% year-on-year growth, maintaining its rapid growth momentum.

POPMART's Chairman, Wang Ning, previously expressed the company's desire to "replicate another POPMART overseas" in 2024, a goal that now seems closer. In 2023, the company's revenue from business in Greater China, Hong Kong, Macau, Taiwan, and overseas markets surpassed the 1 billion yuan mark for the first time, reaching CNY 1.066 billion, a 134.9% year-on-year increase. In the first quarter of this year, the company's performance in these regions continued to shine, with a year-on-year growth of 245% to 250%.

Reporters noted that Wen Deyi, Vice President and President of International Business at POPMART, revealed that the East Asian market, including Greater China, South Korea, and Japan, as the longest-standing overseas market, had already accounted for about half of the company's overseas business performance by the end of 2023, with the number of offline stores reaching 43. However, Southeast Asia is the fastest-growing market, and by the end of 2023, the number of offline stores had reached 15. Wen Deyi revealed that in 2024, POPMART will further expand into countries such as Indonesia, the Philippines, and Vietnam.

However, improving operational efficiency and localizing operations remain significant challenges for the international expansion of trendy toys. To expand its global supply system, in January of this year, POPMART announced that it had completed the initial production of its overseas factory in Vietnam to optimize overall procurement costs. Su De, Chief Operating Officer of POPMART, revealed that it is expected that over 10% of products will be produced from overseas factories in 2024. Nevertheless, the company still needs to provide a more distinct "international expansion methodology" to the market, tailored to the different aesthetic preferences and cultural differences between Eastern and Western markets.

At the time of publication, POPMART's Hong Kong stock was trading at HKD 34.55 per share, with a total market value of HKD 46.399 billion.