In today’s briefing:
- Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?
- Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26
- ABC Mart Extends Lead in Japan’s Footwear Market as Competitors Contract
- CaoCao IPO: The Bear Case
- Walmart Raises Alarm on Tariffs: What Shoppers Need to Brace For!
Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?
- Pop Mart International Group (9992 HK) opened its first dedicated jewellery concept store, POPOP, in Shanghai last Friday, featuring accessories based on its best-selling characters like Labubu, Molly, and Skullpanda.
- The jewellery line represents a natural, high-return extension of Pop Mart’s brand. If scaled successfully, it could support overall revenue growth, enhance group margins, and contribute to higher returns.
- Expect high margin, high return casual jewellery business to support growth and uplift margins going forward and lead to analyst upgrades to future revenues/earnings.
Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26
- Resilient FY25 Margins: Despite a 17.5% revenue drop, Chow Tai Fook Jewellery (1929 HK) expanded operating margins by 400bps through cost control and premium product mix.
- Brand-Led Recovery in FY26: Signature launches, digital sales, and store optimization to drive Same Store Sales Growth (SSSG) recovery and sustain high operating leverage.
- Valuation Supported by Fundamentals: Valuation at 20.8x P/E (TTM) valuation justified by strong ROE (>20%), margin leadership, and stable dividend payout (~88%) versus regional jewellery peers.
ABC Mart Extends Lead in Japan’s Footwear Market as Competitors Contract
- The footwear retail sector is a one horse race, with that horse being ABC Mart.
- It continues to grow at a respectable rate while increasingly diminutive rivals contract.
- ABC Mart is expanding further into the apparel category too, providing more room for future growth.
CaoCao IPO: The Bear Case
- CaoCao Inc (1646553D CH) is the second-largest ride-hailing player in China. It has filed its PHIP to raise US$200-300 million.
- In CaoCao IPO: The Bull Case, I highlighted the key elements of the bull case. In this note, I outline the bear case.
- The bear case rests on low net take rates, unfavourable trends of key cost items, expected losses in the current year and a stretched balance sheet.
Walmart Raises Alarm on Tariffs: What Shoppers Need to Brace For!
- Walmart reported a solid first quarter for fiscal 2026, with results exceeding analysts’ expectations and reflecting resilience amid a volatile economic environment.
- The company posted adjusted earnings of 61 cents per share, surpassing the 58-cent consensus estimate, and saw revenue grow 2.5% year over year to $165.6 billion.
- U.S. same-store sales rose 4.5%, outpacing the projected 3.9% increase.
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