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<Research>CMSI Expects POP MART 2H Sales to Slacken to YoY Flat or Decline; Reiterates Sell
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After POP MART (09992.HK) announced its 1Q results, CMSI's discussions with investors indicated that the buy side broadly set full-year growth expectations at 0-15%, below management's 20% guidance, CMSI said in its report. The broker believed there is downside risk to the latter, in wake of weaker-than-expected sales in the Asia-Pacific region, dented by a high base in Thailand. In the US, management admitted new headwinds in e-commerce but remained optimistic about offline performance, targeting the addition of more than 40 new stores. Overall, CMSI forecast the total number of overseas stores in 2026 to be below 250, lower than market expectations of 250-280. Although 1Q sales soared 75-80% YoY and appeared strong on the surface, growth was estimated to decelerate radically going forward. Growth in 2Q will plummet to low double-digit percentages, while 2H26 (3Q/ 4Q26) was expected to turn flat or negative under a high base effect. The broker forecast 2026 sales of RMB41 billion, implying YoY growth of 1.6%, with very limited visibility for 2027. CMSI lowered its revenue forecasts for POP MART for 2026-28 by an average of 10%, cut its gross margin and operating margin forecasts for 2026 by 0.7 ppts and 1.2 ppts respectively, and reduced its net profit forecasts for each year in the period by 11.6%, 10.7% and 9.5% respectively. It maintained a Sell rating on POP MART with a TP of HKD127. AASTOCKS Financial News |
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