Pop Mart: From Trendy Toys to the 'New Species' of Emotional Economy

On August 7, the stock price of Pop Mart (09992.HK) reached a new historical high, approaching the 300 HKD mark during the trading session. This is not just a temporary market frenzy but a profound transformation in China's new consumption sector. With 286 funds heavily invested, Morgan Stanley setting a target price of 365 HKD, and preliminary data showing a 200% increase in revenue and a 350% surge in net profit for the first half of the year, what we are witnessing is not just the success of a toy company but the rise of a new business paradigm—a super platform centered on emotional value, fortified by an IP ecosystem, and driven by a global vision.

1. The Business Logic Behind Heavy Capital Investment: From Toy Manufacturer to Emotional Value Platform

By the end of Q2, 286 funds had included Pop Mart in their heavy holdings, a 104-fund increase from the previous quarter. Dongfanghong Qihang and Qidong Three-Year Holding Funds made significant new investments, while GF Industry Selection, managed by Liu Gesong, listed it as its second-largest holding. The capital's vote of confidence reflects a deep understanding of Pop Mart's fundamental business model transformation.

Morgan Stanley's report hit the nail on the head: "Pop Mart's intrinsic value far exceeds its IP holdings, a point underestimated by the market." Traditional valuation models focus on tangible assets and short-term profits but struggle to quantify the value of emotional connections. When consumers rush to buy not just dolls but cultural identity and emotional projection at the Twinkle Twinkle exhibition, Pop Mart has quietly built a new economic platform centered on "emotional consumption." The sold-out scenes at the Beijing International Toy Fair's Twinkle Twinkle exhibition vividly demonstrate the power of this emotional economy.

On a deeper level, Pop Mart is rewriting the value equation of the consumer industry:

From functional to meaningful consumption: Consumers buy not just the physical attributes of toys but the cultural symbols and emotional value they carry. A Molly doll might represent childhood memories or a declaration of individuality.

From single-product logic to ecosystem synergy: Through exhibitions, online communities, retail spaces, and other touchpoints, Pop Mart has built a complete IP experience loop. After purchasing a doll, users can participate in new product launches, artist meetups, and second-hand trading communities, forming a self-reinforcing emotional ecosystem.

From passive consumption to co-creation: Users deeply engage in IP ecosystem building through blind box collections, community sharing, and exhibition interactions, further strengthening emotional connections and brand loyalty. Data shows that Pop Mart's member repurchase rate is as high as 58%, far exceeding the traditional retail average.

2. The Essence of Soaring Performance: A Data-Driven IP Industrialization System

With preliminary revenue growth of no less than 200% (over 13.7 billion CNY) and net profit growth of no less than 350% (4.5 billion CNY) in the first half of 2025, and a net profit margin rising to 30%, Pop Mart's "IP industrialization" system is now delivering economies of scale.

Three core pillars of this system have matured:

[1] Industrialized IP incubation: From Molly and Dimoo to the emerging Twinkle Twinkle, Pop Mart has standardized the process from artist discovery, character design, market testing to mass production. Its global design team collaborates with over 300 artists, ensuring a steady stream of fresh content. Morgan Stanley's emphasis on tapping global artistic resources recognizes the scalability of this system.

[2] Intelligent supply chain: Through digital management, Pop Mart achieves efficient coordination from demand forecasting to flexible production and precise distribution. Its Dongguan smart factory boasts over 80% automation, reducing new product launch cycles to one-third of the industry average, supporting high-frequency, multi-series product iterations.

[3] Omnichannel integration: Online mini-programs, e-commerce platforms, offline robot stores, and flagship stores form a comprehensive network. 2024 financials show online revenue accounting for 42%, with over 400 offline stores and 2,000 robot stores, creating strong omnichannel reach. Notably, online channels' gross margin of 65% far exceeds the 58% of offline channels, highlighting the growing profit advantage of digital channels.

This industrialization capability brings not just efficiency but staggering economies of scale:

In 2024, Pop Mart sold over 180 million trendy toys, averaging 5.7 products per second. Top IP Molly's cumulative sales exceeded 6 billion CNY, with a single IP's value rivaling a mid-sized listed company. The projected 4.5 billion CNY net profit for the first half of 2025 means Pop Mart has already surpassed its 2022 full-year revenue in just six months.

3. Globalization and Platformization: Dual Engines" for Future Growth

Morgan Stanley's report accurately notes that the core of Pop Mart's undervalued platform potential lies in its global reach—"significant potential to tap into the rich artistic resources of the U.S., Europe, Japan, and Southeast Asia." This is not empty talk but based on its demonstrated international capabilities.

Upgraded international strategy: Pop Mart has evolved from simple product exports to a dual-track model of "localized IP operations + global artistic resource integration." Flagship stores in Seoul and Tokyo sparked long queues; themed exhibitions were held in London and New York; collaborations with Disney, Universal, and other IP giants produced co-branded series. Overseas revenue rose from 12.5% in 2023 to 18.7% in 2024, growing much faster than domestic business.

Platform ecosystem expansion: The success of the Twinkle Twinkle exhibition signals Pop Mart's leap from "trendy toy brand" to "pan-entertainment platform." The hot sales of figurines, artwork, bags, and accessories demonstrate the extensibility of its IP derivative ecosystem. Morgan Stanley expects this series to drive significant sales growth post-2025, just the beginning of platform value release. Future directions could include IP-based games, animations, films, and even themed entertainment experiences.

4. Revelations: The Era-Defining Significance of Pop Mart's Model

Pop Mart's rise illuminates a replicable path for China's new consumption industry:

"Depth + warmth" replaces "traffic + subsidies": In an era of dwindling traffic dividends, only brands that cultivate user emotions and build cultural identity can endure. Pop Mart proves that genuine emotional connections outlast brute-force marketing wars.

"Hard tech + soft value" dual-drive: Combining "hard strengths" like supply chain efficiency and data algorithms with "soft strengths" like IP creativity and emotional resonance creates true barriers. Pop Mart's smart factories and artist ecosystem exemplify this fusion.

From "Made in China" to "Created with a Chinese Heart": Pop Mart's global expansion is essentially the joint export of Eastern aesthetics and modern commerce. When Molly's Forbidden City collaboration sells out in London, or Chinese designers' works grace Tokyo collectors' shelves, a new paradigm of cultural export emerges.

As Pop Mart's stock price soars, it breaks not just capital market ceilings but the boundaries of business imagination—emotions can be quantified, culture can circulate, and dolls can embody an era's sentiments. This is not just one company's victory but the first cry of a new business civilization where "human hearts" are the ultimate battleground. In an age of digital and material excess, products that offer solace to the soul will ultimately earn the market's heartfelt rewards. Pop Mart's story may have only just begun.$POP MART(09992.HK)