Daily Brief Equity Bottom-Up: Pop Mart International – Valuation Using Peter Lynch’s PEGY Ratio and more

• In this insight, we discuss Pop Mart (9992 HK)’s valuation using Peter Lynch’s PEGY ratio.
• If Pop Mart misses current consensus estimates in 2026 and 2027 by 5%, this would result in PEGY ratio of 1.4x in 2026 which would make current valuations unattractive.
• WE EXPECT A HIGHER PROBABILITY OF POP MART’S VALUATION DECLINING BY 50% TO ABOUT US$25 BILLION, RATHER THAN INCREASING BY $75 BILLION FROM CURRENT LEVELS OVER THE NEXT 1-2 YEARS.

• China TCM is still in the adjustment period due to CTCMG VBP and goodwill impairment loss. However, the new management is pushing for internal reforms, which is a good phenomenon.
• Rebound will come after China TCM fully digest the impact of VBP. Looking forward, annual profit of RMB1bn is still expected. Reasonable valuation is RMB10-15bn, which is just conservative estimate.
• As CNPGC still commits to resolving the horizontal competition issue, investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, which is a catalyst.

• Q1 FY25 revenue fell 20% YoY, but enterprise SSD strength kept EBITDA positive and margins above trough levels.
• Management guides for a strong sequential rebound in Q2–Q3 on AI-driven enterprise demand and normalized PC/smartphone inventories.
• Kioxia trades at ~3–4× EV/EBITDA vs peers on 9–12×, despite higher NAND margins, with the gap driven by cyclicality, tech lag, and shareholder overhang.

• Mahindra & Mahindra (MM IN) pre-announces GST benefits, signaling consumer-first patriotism but raising questions on intent.
• Dealer checks reveal heavy discounting despite festive demand hopes coupled with weak dispatches.
• Possible margin risks emerge as MM tries to flush out inventory ahead of GST 2.0 and festive season.

• Copper Output Cuts: JX Advanced Metals will reduce electrolytic copper production by ~30kt (~5–8% of capacity) in FY25, with further smelting downscaling by March 2026.
• Margins have collapsed as TC/RCs plunged into negative territory (~–$45/t vs $80/t in 2023), amid concentrate shortages and Chinese overcapacity.
• Smelting will be retained mainly for rare-metal recovery (tantalum, indium, rhenium), while JX doubles down on semiconductor materials and upstream mineral projects.

• Laopu Gold (6181 HK)  is down nearly 20% since June’s lock-up expiry, despite strong 1H2025 results and subsequent analyst earnings upgrades.
• The stock trades at 22x FY26E, the low end of its YTD P/E range, with a PEG below 0.8x.
• China’s retail gold demand in 2Q2025 has shifted toward investment products – a trend that could support Laopu’s mostly investment-driven sales.

• Performance Running momentum intact: ~10% global market share, outgrowing Nike, with scope for further share gains.
• Adjacent categories underpenetrated globally; restructuring complete, positioning for accelerated US/Asia expansion.
• Lifestyle brands (SportStyle, Onitsuka Tiger) compounding fast (+40%+ YoY), higher margins, could be the real long-term profit driver.

• Daniel Wu of BristolMoon Capital discusses Mercado Libre, a company that has evolved from being the “eBay of Latam” to a major e-commerce and fintech player in Latin America.
• Mercado Libre is described as an amalgamation of Amazon Retail and Alipay, with a dominant market share in e-commerce in countries like Brazil, Mexico, and Argentina.
• Founded in 1999 in Buenos Aires by Marcos Galperin and co-founders, Mercado Libre differentiated itself by focusing on sustainable growth strategies instead of chasing rapid user acquisition, allowing it to thrive through economic downturns and emerge as a major player in the region.

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• Amber Group’s electronics arm, ILJIN Electronics, has raised Rs 1,200 crore in its first-ever institutional fundraise, led by private equity firm ChrysCapital and supported by InCred Growth Partners.
• This capital infusion accelerates ILJIN’s organic expansion & supports its strategic inorganic growth ambitions, positioning the company as key beneficiary of India’s push for self-reliance under PLI and ECMS schemes.
• The fundraise is a powerful validation of Amber’s strategic pivot towards high-growth EMS sector, paving the way for sustained, multi-year growth and a potential re-rating of the consolidated entity.

• Urban Company is India’s largest organized online home-services platform, with ~60% of revenues from Beauty & Wellness and dominant market share across categories.
• IPO proceeds (~₹4,720 mn fresh issue) will be used to strengthen technology, expand professional training, enhance branding, and fund working capital.
• The platform connects customers with vetted professionals for beauty, cleaning, repairs, and home improvement, differentiated by its supply-controlled model (training, kits, quality standards).