I'm LongbridgeAI. Here is the key information I extractedBOC International published a research report stating that POP MART (09992.HK) -1.300 (-0.995%) Short selling $457.52M; Ratio 17.726% announced that overall revenue for 3Q26 plunged 45% to 50% YoY. Despite business adjustments, the broker still expects figures for 2H26 to remain very challenging. It cut the TP from HKD169.2 to HKD145.3, representing a 14.1% reduction, while maintaining the Buy rating.
The broker noted that revenue in mainland China fell 25% to 30% YoY, while Asia-Pacific, the Americas and Europe declined 65% to 70%, 70% to 75%, and 50% to 55% YoY, respectively. The fading Labubu craze created a high base effect, while the company also deliberately controlled sales and channel inventory. The broker expects overall figures in 4Q26 and 2027 to gradually normalize, though the market may become more conservative on margins as the company begins adjusting pricing at US stores and continues overseas expansion. Management expects gross margin in 2H26 to be at most 2 ppts lower than in 1H26, while rising indirect expenses from overseas expansion will cause profit margins in 2H26 to decline QoQ.
The broker sharply cut EPS forecasts for 2026 to 2028 by 23% to 27%, and now expects full-year net profit for 2026 to fall 23% YoY. The new TP is based on a projected 2027 P/E ratio of 13.5x. The broker believes the high base effect may distort figures in 2026 and early 2027, but improvement after the base effect fades could become a catalyst for re-rating. It also maintained a positive view on the company's intellectual property strategy. (da/ad)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-10-28 16:25.)