Pop Mart IP Empowerment & Southeast Asian E-commerce Surge: Will Stock Hit HK$120?

Recently, Pop Mart has once again captured the spotlight and gained widespread popularity. Chinese investors have begun to focus on the IP derivative economy, leading to increased attention on Pop Mart (HKG: 9992). The company, which has built its business on intellectual property, has witnessed its stock price skyrocket by over 348% this year.

Reflecting on a significant incident, Pop Mart made its debut on the Hong Kong Stock Exchange at the end of 2020. On the first day of listing, it experienced an astonishing increase of more than 100%, pushing its market value beyond 100 billion Hong Kong dollars.

 

At that time, I was working at a private equity fund company where both my superiors and colleagues were closely monitoring this stock. However, being from an older generation, they were perplexed by how a company dealing in dolls and toys could achieve such a high market value.

 

One afternoon, I took the opportunity to explain in detail to them about Pop Mart's unique self-produced and self-marketed industrial chain process. I likened it to a card-drawing mechanism in games, highlighting its engaging blind box economy and the diverse intellectual properties it has created, each breathing life into their respective dolls.

 

This day provided the older investors with a glimpse of the unique perspectives and insights that the younger generation can offer in the investment landscape.

 

Alright, now let's get back to the main topic and continue our discussion about this remarkable company, Pop Mart.

 

 

The surge in popularity of trendy toys is evident not just from macro market data but also from the increasing presence of Pop Mart stores and products in shopping malls.

 

 

This naturally raises the question of what factors have contributed to Pop Mart's exceptional growth in Southeast Asia.

 

 

Pop Mart's expansion into Southeast Asia capitalizes on the region's vast youth population and booming e-commerce sector, particularly evident in markets like Indonesia.

 

In May 2023, TikTok's leading cross-border agency, JoYoo, joined forces with Pop Mart and commenced the official operation of Pop Mart's TikTok e-commerce business across Southeast Asia.

 

Under the proficient operation of JoYoo, Pop Mart has ascended to the top position in the trendy toy category on TikTok within Southeast Asia.

 

In August 2024, Pop Mart's sales on TikTok's Thailand Station amounted to 165,300 US dollars.

 

Furthermore, Pop Mart has also demonstrated outstanding performance in Malaysia, the Philippines, and other regions, particularly achieving remarkable results during the mid-year promotion of TikTok Shop.

 

Evidently, the growth of Pop Mart in Southeast Asia is closely intertwined with the rapid expansion of TikTok Shop in that region.

 

According to the data released by TikTok for Business, Southeast Asia is the fastest-growing region among all.

 

It is projected that by 2025, the scale of the Southeast Asian e-commerce market will reach a whopping 234 billion US dollars, maintaining a robust compound annual growth rate of 18%.

 

 

It can be observed that the rapid growth of Pop Mart in Southeast Asia can be attributed, on the one hand, to the continuous flourishing of the trendy toy market and the emergence of young people's personalized consumption demands.

 

On the other hand, it also serves as a vivid illustration of Chinese enterprises venturing overseas to seek business opportunities and riding the wave of live-streaming e-commerce.

 

The current stock price indicates that Pop Mart's price-to-earnings ratio for 2025 is merely 22.7 times.

 

 

As a leading enterprise in China's trendy toy industry, Pop Mart's IP operation capabilities have been gradually validated.