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POP MART Sags 2%+ as Citi and CLSA Cut TPs
Recommend 14 Positive 15 Negative 13 |
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POP MART (09992.HK) opened flat today (14th) before edging lower in early trading, hitting a trough of HKD155.7. It last stood at HKD156.9, down 2.49%, with 5.7967 million shares traded, involving HKD910 million in turnover. Citi said in a research report that, in view of slowing growth in overseas markets and margin pressure from operational deleveraging, it lowered its earnings forecasts for POP MART by 16-19% for 2026-28. The broker expected the group's full-year 2026 revenue to grow 10% YoY, below the company's target of over 20%, in wake of an expected 7% YoY decline in overseas revenue, while China market revenue was projected to grow 24% YoY. Citi cut its TP on POP MART from HKD350 to HKD263 and reiterated its Buy rating. The broker expected the group's gross margin to narrow by 1-2 ppts YoY in 2026, owing to rising raw material and logistics costs, changes in regional mix and tariffs, while net profit margin will also come under pressure amid lower gross margin and higher labor and rental expenses. *********************************************************************************************** CLSA noted in a research report that the market is likely to reflect POP MART's short-term pressures, including soaring raw material costs, surging oil prices and margin contraction due to changes in overseas sales mix. The broker projected that in FY2026, the group's gross margin and adjusted net profit margin will sink by 2 ppts and 2.3 ppts YoY, respectively. For overseas operations, CLSA expected the group to focus on a standardized global store model, membership system, logistics and inventory management to enhance operational efficiency and support long-term growth. In the long run, the broker was upbeat on its exclusive IP platform, featuring a diversified IP portfolio and broader IP content to deepen emotional connections and expand consumption scenarios through IP-related products. In the short run, the broker believed the market is assessing management's ability to drive sustainable growth and the extent of gross margin pressure over the coming quarters amid a high base effect. The TP was cut from HKD303 to HKD206, and an Outperform rating was kept. Auto-translated by AI This article was automatically translated by AI, the original language 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. More Details
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