DBS initiates "Buy" rating on Pop Mart with a target price of HKD 312.

The DBS research report indicates that Pop Mart (09992.HK) is driven by strong demand for its proprietary IPs such as Labubu and Molly, with expectations for revenue and profit to rise by over 1.4 times and 1.8 times, respectively, this year. Although potential short-term headwinds include revenue concentration, regulatory risks, and operational challenges, the stock price trend may depend on the company's ability to transform its core IP into a sustainable cultural icon. However, the bank believes that the company’s diversified product portfolio, scalability, and innovative business model can build a robust mid-term outlook to offset short-term risks. Based on the company’s growing influence in popular culture and its solid mid-term outlook, the bank has initiated a "buy" rating with a target price of HKD 312, expecting a compound annual growth rate of 81% and 99% for revenue and profit, respectively, from 2024 to 2026.