JPMorgan Downgrades Pop Mart to 'Underweight', Cuts Target Price to HK$120

On August 21, JPMorgan released a report stating that Pop Mart (09992.HK) saw a true turning point in the second quarter, with revenue expected to decline 11% year-over-year, marking the first quarterly drop since 2023 and clearly indicating a shift from hyper-growth to normalization. The rating was downgraded from "Neutral" to "Underweight." The target price was cut from HK$165 to HK$120.

The report noted that Pop Mart's first-half revenue reached 17.2 billion yuan, up 24% year-over-year, falling 11% short of the bank's expectations. As revenue growth slows, overseas operating margins fell 14 percentage points year-over-year to 30%, heightening concerns about the second half. The bank forecasts that Pop Mart's third-quarter revenue will decline more than 35% year-over-year, with the fourth-quarter decline narrowing to approximately 20%. In other words, the bank's previous pessimistic scenario has effectively become the new baseline, with weak demand and deleveraging beginning to show effects. (Golden Ten)

[TechFlow]