Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Pop Mart International Group L / Equity Bottom-Up

<ul>
<li>Markets expect Popmart to deliver fast growth for years to come, yet we are skeptical because the pop toy business, by definition, is a niche market.</li>
<li>Blaming COVID for Popmart’s weak results risks focusing too much on near-term cyclical recovery but overlooking structural bottlenecks to growth.</li>
<li>While we are cautious for long term, continued improvement in business and news flow leading to 1H results will likely result in share price rebound and provide tactical trading opportunity.</li>
</ul>


Markets expect Popmart to deliver fast growth for years to come, yet we are skeptical because the pop toy business, by definition, is a niche market.
Blaming COVID for Popmart’s weak results risks focusing too much on near-term cyclical recovery but overlooking structural bottlenecks to growth.
While we are cautious for long term, continued improvement in business and news flow leading to 1H results will likely result in share price rebound and provide tactical trading opportunity.


Popmart (9992 HK): Long Term Constraints Cloud Near Term Recovery

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 29th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Great Wall Motor (2333 HK), Aia (1299 HK), Pop Mart (9992 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 29th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Great Wall Motor (2333 HK), Aia (1299 HK), Pop Mart (9992 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).


Hong Kong Buybacks: Great Wall Motor, AIA, Pop Mart

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure of physical stores and robo shops.</li>
<li>The company also issued a profit warning last week for 1H2022 that was severely impacted by the spread of Covid-19 as well as business expansion related costs.</li>
<li>We expect the company’s aggressive overseas expansion strategy to continue to impact the company's profitability and there is further downside.</li>
</ul>


Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure of physical stores and robo shops.
The company also issued a profit warning last week for 1H2022 that was severely impacted by the spread of Covid-19 as well as business expansion related costs.
We expect the company’s aggressive overseas expansion strategy to continue to impact the company's profitability and there is further downside.


Pop Mart: Aggressive Overseas Expansion to Hurt Profitability

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight Tencent and BYD that dominated the inflows last week.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight Tencent and BYD that dominated the inflows last week.


Hong Kong Connect Flows: 11 Weeks of Inflows

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 22nd based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Pop Mart (9992 HK), Great Wall Motor (2333 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jul 22nd based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Aia (1299 HK), Pop Mart (9992 HK), Great Wall Motor (2333 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Aia (1299 HK), Great Wall Motor (2333 HK).


Hong Kong Buybacks: AIA, Pop Mart, Great Wall Motor

China

Pop Mart International Group Limited operates as a toys wholesales company. The Company provides trendy toys designing, production, marketing, and other services. Pop Mart International Group markets its products worldwide.

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Pop Mart International Group L (9992 HK)

Popmart (9992 HK): Long Term Constraints Cloud Near Term Recovery

Pop toy is a niche market which limits Popmart's growth potential, yet we see a short-term share price rebound leading to 1H23 results.

Eric Chen

Hong Kong Buybacks: Great Wall Motor, AIA, Pop Mart

We highlight the top 3 companies that repurchased the most shares from the HK market were Great Wall Motor (2333 HK), Aia (1299 HK), Pop Mart (9992...

Ke Yan, CFA, FRM

Pop Mart: Aggressive Overseas Expansion to Hurt Profitability

Pop Mart’s share price has lost more than 50% YTD as resurgence of Covid in China has severely impacted the company’s operations including closure...

Shifara Samsudeen, ACMA, CGMA

Hong Kong Connect Flows: 11 Weeks of Inflows

Southbound connect recorded 11 weeks of consecutive inflows. We highlight Tencent and BYD that dominated the inflows last week.

Ke Yan, CFA, FRM

Hong Kong Buybacks: AIA, Pop Mart, Great Wall Motor

We highlight the top 3 companies that repurchased the most shares from HK market in the past 7 days were Aia (1299 HK), Pop Mart (9992 HK), Great...

Ke Yan, CFA, FRM

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52-week Range

Market Cap (USDm)

P/E

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