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PostsPop Mart: The moat is still widening!
As frequent buyers of trendy toys, when we buy blind boxes and collect figurines, we are actually silently paying attention to a question:
Can this brand continuously launch IPs that we like? Will we step on pitfalls when buying? Can global friends chase new products together?
Recently, Pop Mart $POP MART(09992.HK) released its financial report for the first half of 2025, which contains many answers.
Just like Buffett said: "Investment should look at the moat, consumption should look at the heart's desire", the "moat" of trendy toy brands is actually the IP and experience that we buyers truly like.
1. Is the IP we like "strong" enough? This is the core of our purchase
For us, the soul of trendy toys is the IP.
When opening the financial report, the first thing to look at is whether the IP we like is continuously exerting its strength. The data shows that in the first half of 2025, Pop Mart's total revenue was 13.876 billion yuan, of which its own artist IP contributed 88.1% of the income, This means that most of the money we spend is on truly recognizable original IPs, not casually labeled "OEM goods".
The most eye-catching is the THE MONSTERS series, with a half-year revenue of 4.814 billion yuan, accounting for 34.7% of the total revenue.
As a loyal fan of LABUBU, it is not surprising to see the "High Energy Ahead" vinyl plush series and the "Quirky Convenience Store" figurines selling out. These new products not only continue the unique style of the IP but also innovate in craftsmanship, such as vinyl paired with tie-dye techniques, making the tactile and visual effects better than the old models.
This ability to "keep old IPs fresh" is actually what Buffett calls "the competitiveness of continuously creating user value".
The growth of new IPs is also very crucial.
CRYBABY's half-year revenue was 1.218 billion yuan, becoming one of the fastest IPs to enter the "10 billion club". The reason why the "Tears of Cupid" figurines and "Leopard Cat" plush pendants are popular is that they capture the emotional resonance of young people "releasing their nature".
There is also DIMOO, with its co-branded series with Disney and Earth Day figurines made of eco-friendly materials, which not only satisfy the desire to collect but also convey environmental concepts. This is why we are willing to pay for IPs, not just because they look good, but also because they have an attitude.
However, it should be noted that THE MONSTERS single IP accounts for more than one-third. Although it is currently very popular, as Munger reminds us, "Don't put all your eggs in one basket", we hope the brand can continue to incubate more new IPs like Star Man, giving us more choices.
2. How is the "cost-effectiveness" of spending money? The answers lie in gross profit margin and cost control
When buying trendy toys, we don't say it out loud, but we actually calculate: "Is this price worth it?" The gross profit margin and cost data in the financial report can help us see this issue clearly.
In the first half of 2025, Pop Mart's gross profit margin reached 70.3%, higher than last year's 64%, This is not a random price increase, but good cost control.
From the cost structure, sales costs increased by 151.1%, but far lower than the revenue growth rate of 204.4%, indicating that the more sold, the lower the unit cost.
For example, upgrading plush materials and optimizing vinyl craftsmanship not only improve the texture but also don't make us spend more money.
Just like when we buy LABUBU plush toys, we can clearly feel that the fabric is softer, but the price is similar to last year's models. This is the "hidden benefit" behind the increase in gross profit margin.
Cost control is also very important.
Although transportation and logistics expenses increased by 546.7% (after all, global shipments have increased), employee welfare expenses only increased by 51.4%, far lower than the speed of business expansion.
This means that the brand has not passed the expansion costs onto us, and the money we spend is more on the product itself, rather than inefficient management expenses.
For buyers, this is the sense of security of "money spent on the blade".
3. Is the buying experience enjoyable? Channels and services determine repurchase willingness
As buyers, we not only care about "what to buy" but also "how to buy".
The channel data in the financial report hides the truth of our purchasing experience. In the first half of 2025, China's online revenue increased by 212.2%, of which the Douyin platform increased by 168.6%, and the box-drawing mini-program revenue was 1.125 billion yuan.
Behind this is our real experience: we can see trendy toy live broadcasts while swiping Douyin, the mini-program for box-drawing is convenient and fun, and we can buy new products without leaving home.
Offline channels are also becoming more convenient.
12 new stores were added domestically, and 105 robot stores were net added. It is becoming easier to see Pop Mart's presence in nearby shopping malls.
For overseas friends, 19 new stores were added in the Americas, 4 in Europe, and the official website covers 37 countries. Even Southeast Asia's Shopee and the US and Europe's TikTok can buy genuine products.
Just like my friend abroad said: "Now buying SKULLPANDA doesn't need to wait for a purchasing agent, local stores can deliver in three days."
Member services are the key to retaining us.
As of the end of June, the total number of members reached 59.12 million, with 13.04 million new members added in half a year, and a repurchase rate of 50.8%.
This means that one out of every two members will make a repeat purchase. Why?
Because members can receive new product reminders and participate in offline activities, such as the "Star Man Friends Meeting", this feeling of "being valued" makes us willing to keep chasing this brand.
4. Can global trendy toy enthusiasts "chase updates" together? Overseas expansion gives the answer
Trendy toys have no borders, we always hope that the IPs we like can be recognized globally.
The overseas market data in the financial report is particularly eye-catching: revenue in the Americas increased by 1142.3%, and Europe and other regions increased by 729.2%.
This is not simply because there are more stores, but because "localized operations" are done well, using Shopee for live broadcasts in Southeast Asia, using TikTok for content in the US and Europe, and even product designs consider local aesthetics, such as DIMOO's limited edition for the 50th anniversary of China-Thailand diplomatic relations, which incorporates both Chinese elements and local culture.
For us, this means two things:
First, the greater the influence of the IP we like, the more peripherals and co-branded products there will be, and the higher the collection value.
Second, global simultaneous releases mean we no longer have to envy foreign limited editions. Just like THE MONSTERS' "Quirky Convenience Store" exhibition held in multiple cities worldwide, we can check in offline no matter which country we are in. This feeling of "global fellow enthusiasts" is particularly great.
5. Inventory and cash flow
The two situations we fear most when buying trendy toys are: the favorite items are out of stock as soon as they are launched, or worrying that the brand suddenly "cools down" and we can't get after-sales service.
The inventory and cash flow data in the financial report can dispel these concerns.
Inventory turnover days decreased from 102 days last year to 83 days, meaning products sell quickly and turnover efficiency is high. We don't have to worry about our favorite new products being discontinued due to inventory backlog, but can instead buy freshly released series faster.
Cash flow is even more reassuring.
As of the end of June, cash and cash equivalents reached 11.923 billion yuan, with no bank loans and an asset-liability ratio of 32.4%.
This shows that the brand is not short of money, has the ability to develop new products, and can guarantee after-sales service.
Just like Buffett values "cash-rich companies" when investing, for us, a brand with healthy cash flow can continuously launch products we like without worrying about buying and then "running away".
Conclusion: As buyers, is this brand worth continuing to follow?
After reading the financial report, the feelings of ordinary buyers are very clear: Pop Mart's core competitiveness, IP innovation, purchasing convenience, and global synchronization are all getting stronger.
The IPs we like continue to release new products, purchasing channels are becoming more convenient, the brand has money and the ability to operate long-term, and it is even controlling costs to make every penny we spend more worthwhile.
Munger said: "Only long-termists can reap the benefits of time."
For trendy toy enthusiasts, we are not just chasing individual blind boxes, but an IP ecosystem that can continuously bring joy and resonance.
From the financial report data, Pop Mart is using IP moats, efficient operations, and global layout to solidify this ecosystem.
As long as it continues to keep our preferences in mind, I believe we buyers will always be willing to pay for the IPs we like.
$BLOKS(00325.HK) $MNSO(09896.HK)
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