Pop Mart's 2H26 product pipeline strengthens, with peak-season demand expected to carry through

Overview

This report is Morgan Stanley's company research meeting notes on Pop Mart International Group (9992.HK), focusing on Pop Mart's new product pipeline, IP extensions, and sales cadence ahead of the peak season in 2H26. The report believes that new products such as Labubu Hair Salon, Dimoo x PIXAR, Skullpanda, and Twinkle Twinkle will enhance consumer attention and, together with store openings and upgrades, are expected to drive sequential sales improvement in 2H26.

Core views

The core views are: first, Labubu remains Pop Mart's biggest sales-contributing IP this year. Although Labubu Hair Salon lacks sufficient buzz on overseas social media and may find it difficult to surpass Big Into Energy (3.0), its higher ASP can partially offset the impact of potentially lower sales volume and help drive foot traffic in the China market. Second, aside from Labubu and Molly, other major IPs are still growing this year. Third, the decline in overseas online sales can be partially offset by strong growth in offline sales. Fourth, business seasonality has normalized this year; sales in 2Q26 may be weaker than in 1Q26, but 2H26 should see sequential growth as products and demand improve.

Analysis framework

The report mainly assesses Pop Mart's 2H26 demand and revenue trends from the perspectives of new product launch cadence, IP life cycle, product pricing, regional sales mix, channel mix, and seasonal changes; for valuation, it uses the Morgan Stanley ModelWare framework, supported by the target 2026e P/E and the PEG corresponding to 2025-27e EPS CAGR.

Methodology notes

• Valuation methodsMorgan Stanley ModelWare

  Target P/E and PEG valuation

  The report uses a target 2026e P/E of 23x as the base-case valuation and notes that this valuation implies about 2.5x PEG, corresponding to 2025-27e EPS CAGR.

• Rating systemMorgan Stanley Fundamental Equity Research Rating

  Overweight

  Overweight indicates that the stock's risk-adjusted total return over the next 12-18 months is expected to exceed the average total return of the analyst's industry coverage universe.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Pop Mart International Group (9992.HK)

  Research target, directly affected by the new product pipeline, IP popularity, channel expansion, and regional sales cadence.

  Strengths

  Labubu remains the largest sales-contributing IP, momentum in the China market is strong, the 2H26 product pipeline is richer, and offline sales growth is solid.

  Weaknesses

  Labubu Hair Salon lacks buzz on overseas social media, sales in China and overseas in 2Q26 may be lower than in 1Q26, and some online sales are facing a pullback.

  Comparison

  Labubu Hair Salon is priced higher than the previous generation, but the report believes its overseas performance may find it difficult to surpass Big Into Energy (3.0).

  Risks

  Uncertainty in new product and IP performance, weak macro environment, unsuccessful overseas expansion, trade tensions, and insufficient ability to continuously create attractive products.

Key data

• Stock ratingOverweightMorgan Stanley's rating on 9992.HK.
• Industry viewIn-LineThe covered industry is expected to perform broadly in line with the relevant market benchmark over the next 12-18 months.
• Target priceHK$247.00Target price shown in the report.
• Closing priceHK$158.10As of June 24, 2026.
• Target price upside56%Relative to the closing price shown in the report.
• Labubu Hair Salon China priceRmb159The previous generation was Rmb99; the price increase reflects design upgrades.
• Labubu Hair Salon U.S. priceUS$39.9The previous generation was US$27.9, and the U.S. premium versus China narrowed to about 70%.
• 2026e EPSRmb9.97Morgan Stanley estimate shown in the table.
• 2026e revenueRmb41,893 mnNet revenue forecast shown in the table.
• 2026e P/E13.9xValuation metric shown in the table.

Impact & implications

If the 2H26 new product pipeline is launched as planned and offline channels continue to expand, Pop Mart may maintain strong momentum in the China market and help overseas sales gradually stabilize or recover sequentially after social media hype fades. New products with higher ASP can cushion the pressure from unit sales underperforming the previous generation, but insufficient overseas online traction and uncertainty around new products will still affect the realization of earnings growth.

Risks

• A weak macro environment may suppress discretionary consumer demand.
• There is uncertainty around the performance of new products and IPs.
• If the company cannot continue to create attractive products, growth momentum may slow.
• Unsuccessful overseas expansion may affect valuation re-rating.
• Trade tensions may affect overseas business and the supply chain.

What to watch

• Sales, ASP, and social media feedback for Labubu Hair Salon after its launch in China and the U.S.
• The launch timing and market response of the Dimoo x PIXAR collaboration products.
• The official launch cadence of Skullpanda's next-generation plush product and Twinkle Twinkle's plush product with a vinyl face.
• Whether 2Q26 sales are lower than 1Q26, and whether 2H26 achieves a sequential recovery.
• Whether the decline in overseas online sales can continue to be offset by growth in offline sales.
• The contribution of store openings and upgrades in the China market to foot traffic and sales conversion.