China IP retailers and toy companies Report Interpretation

Overview

This tracker reviews August operating indicators and 1H26 results for China IP retailers and toy companies. Goldman Sachs sees resilient underlying China demand but slowing growth against tough comparisons, with Bloks gaining momentum while Pop Mart and Miniso face more mixed sales and margin dynamics.

Core views

China online sales momentum diverged materially in August. Pop Mart's combined Tmall and Douyin flagship-store sales fell 35% year on year, versus 18% growth in July, taking 3Q-to-date growth to negative 16%. Goldman Sachs attributes the decline primarily to difficult comparisons with last year's Pin For Love launch and expects September comparisons to become still tougher because of larger prior-year supply of both Pin For Love and Big Into Energy. Product reception was mixed: Twinkle Twinkle Farm Tale sold more than 25,000 units on Douyin and more than 10,000 on Tmall in its first weekend, reached more than 55,000 and more than 30,000 cumulative units respectively by September 7, and sold out on both platforms. Its resale premium eased from about 25% in week one to about 15% by late August. In contrast, Crybaby × Care Bears traded at a median discount of about 30% in its first week, widening to about 40%, while Hirono After Dark showed a median resale discount of about 18%. Miniso's tracked Tmall, JD and Douyin sales declined about 3% year on year in August after about 3% growth in July, implying flat 3Q-to-date growth. Management nevertheless said overall China GMV growth remained about 20% year on year in July-to-date, with same-store sales growth in the mid-single digits. The new proprietary ChouChou IP exceeded management expectations initially, with about 5,000 blind-box sets selling out in a second; the report identifies the LISA collaboration launched September 12 as a key item to monitor. Bloks' tracked online growth accelerated in August, especially on Douyin, driven by the well-received RMB9.9 Transformers series. Its launches also extended into doll clothing and new licensed IP, with 3Q-to-date series and SKU launches ahead of the prior-year period, although below 2Q26's pace because of seasonality. The 1H26 and 2Q26 earnings picture was mixed. Pop Mart's adjusted net profit missed Goldman Sachs estimates by 13%, reflecting an approximately 10% revenue miss, largely from overseas and also some PRC weakness. Its 1H26 gross margin declined 0.6 percentage point year on year to 69.7% on logistics and procurement costs and an unfavorable geographic mix, while adjusted net margin declined 3.9 percentage points to 30.0%, reflecting foreign-exchange losses, weaker overseas profitability, operating deleverage and organizational and store-expansion spending. Miniso's adjusted net profit excluding FX missed estimates by about 7%; revenue modestly beat as stronger Mainland China sales offset weaker Top Toy and overseas distributor sales. Gross margin rose about 2 percentage points year on year to 45.3%, aided by US tariff refunds, but adjusted net margin fell about 4 percentage points to 9.7% because of operating deleverage and a lower contribution from high-margin distributor sales. Bloks' adjusted net profit beat estimates by 11%, with revenue 6% above estimates on stronger assembly vehicle-toy and overseas sales. Its gross margin, however, fell 4.1 percentage points year on year to 44.3% due to mold depreciation, new-product ramp-up costs and a larger RMB9.9 value-product mix. For 2H26, Goldman Sachs expects China IP and toy demand to remain resilient but growth to moderate on more demanding bases. Product innovation, category expansion, proprietary-IP development and channel upgrades are identified as share-gain levers. Overseas outcomes should diverge: Bloks has low penetration and white space in key accounts and distributor coverage, supporting continued triple-digit overseas growth in 2H26, albeit slower than in 1H; Pop Mart faces a high base and weak recent indicators; and Miniso is deliberately reducing distributor inventory and closing lower-productivity stores in favor of operational quality rather than near-term sell-in. Pop Mart's US credit-card sales decline narrowed only slightly to 58% year on year in August from 63% in July, and app MAU declined; Miniso's US credit-card sales growth accelerated to 24% from 11%; Five Below's strong 2Q26 results were viewed as evidence that Western demand for affordable collectibles and IP merchandise remains healthy, but as a mixed read-through because local US operating execution remains important for Pop Mart and Miniso. Margins remain the central debate. Goldman Sachs expects logistics, procurement, geographic mix and product mix to pressure gross margins across the group. For Pop Mart, slower overseas growth could reduce the benefit of higher-margin overseas sales, while logistics, procurement and regional pricing are headwinds. For Bloks, management expects gradual recovery from the 1H trough, but lower-margin RMB9.9 products, new-category ramp-up and overseas logistics should remain near-term drags. For Miniso, tariff refunds should provide a modest reported gross-margin benefit, but local sourcing in the US and lower high-margin overseas distributor revenue pressure underlying margins. Overseas DTC weakness could weigh on Pop Mart's and Miniso's operating-expense ratios, whereas Bloks could capture scale leverage, partly offset by overseas supply-chain, warehousing and fulfillment investment. Shareholder-return signals were also uneven. Pop Mart announced an RMB2-5 billion six-month buyback, equivalent to about 1.7%-2.7% of market capitalization. Miniso did not declare an interim dividend, prioritizing repurchases, but reiterated that FY26 dividends plus buybacks would exceed 50% of adjusted net profit excluding FX. Bloks declared its first interim dividend of HK$0.3247 per share, implying about an 18% payout ratio; Goldman Sachs sees this as a positive balance-sheet and cash-flow signal, while noting that payout sustainability remains to be established amid overseas, supply-chain and product investment. Expected 2026E total shareholder yields are about 3.0% for Pop Mart, 6.8% for Miniso and 1.3% for Bloks.

Analysis framework

Goldman Sachs combines third-party online-sales tracking, product-launch and resale-price observations, overseas consumer indicators, company results and management guidance. It compares year-on-year sales growth against prior-period launch bases, then assesses how product mix, geographic mix, costs, channel economics and overseas scale affect revenue, margins and shareholder returns.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Online sales, unit volumes, product pricing and secondary-market premiums or discounts are tracked by product and channel.

  The report uses sales volumes and resale pricing to judge product reception, demand momentum and the effect of difficult comparison bases.

• Industry AnalysisSupply-demand framework

  Launch supply, product mix, channel rollout and prior-year comparison bases are evaluated against observed demand.

  This framework supports the report's conclusion that sales growth can moderate even when underlying demand remains resilient, particularly after blockbuster prior-year launches.

• Other

  High-frequency third-party tracker analysis.

  The report uses third-party e-commerce, credit-card, app-MAU, search-interest and resale-market data as timely operating indicators.

Asset mapping & comparison

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

• Pop Mart (9992.HK)

  Covered China IP retailer facing tough China and overseas comparisons.

  Strengths

  Disciplined Farm Tale supply supported a sold-out launch; announced RMB2-5bn buyback.

  Weaknesses

  August China online sales fell 35% YoY; 1H26 adjusted net profit missed estimates by 13%; US indicators remained weak.

  Comparison

  Bloks has stronger near-term online acceleration and overseas visibility; Miniso showed stronger US credit-card-sales momentum.

  Risks

  Single-IP concentration, portfolio expansion, competition, cost control and overseas development are explicit risks.

• Miniso (MNSO; 9896.HK)

  Covered IP lifestyle retailer balancing resilient China operations with an overseas transition.

  Strengths

  China GMV remained about 20% YoY in July-to-date; ChouChou launch exceeded initial expectations; US credit-card sales rose 24% YoY in August.

  Weaknesses

  Tracked China online sales fell about 3% YoY in August; adjusted net profit excluding FX missed estimates by about 7%; overseas distributor sales were weak.

  Comparison

  Its overseas strategy prioritizes inventory health, store productivity and profitability, unlike Bloks' rapid overseas scaling.

  Risks

  Store productivity, global same-store sales and expansion, geopolitics, operating expenses and Yonghui earnings are explicit risks.

• Bloks Group Ltd. (0325.HK)

  Covered toy company with accelerating online sales and stronger overseas growth visibility.

  Strengths

  RMB9.9 Transformers drove August momentum; revenue beat estimates by 6%; adjusted net profit beat by 11%; first interim dividend declared.

  Weaknesses

  Gross margin fell 4.1pp YoY to 44.3%; new-product, mold and lower-priced-product costs weighed on profitability.

  Comparison

  Bloks has lower overseas penetration and more white space than Pop Mart and Miniso, supporting continued triple-digit overseas growth expectations.

  Risks

  IP longevity, channel and inventory management, brand awareness, customer-base expansion, competition, margins, returns and regulation are explicit risks.

Key data

• Pop Mart China online sales-35% YoY in August; +18% YoY in July; -16% YoY 3QTDCombined Tmall and Douyin flagship-store sales; August decline reflected a high base from prior-year launches.
• Miniso China online salesc.-3% YoY in August; c.+3% YoY in JulyTracked Tmall, JD and Douyin sales; implies flat year-on-year 3QTD growth.
• Miniso China GMVc.+20% YoY in July-to-dateManagement commentary; same-store sales growth was mid-single digit.
• Pop Mart 1H26 gross margin69.7%, down 0.6pp YoYHigher logistics and procurement costs and unfavorable geographic mix were key factors.
• Miniso 2Q26 gross margin45.3%, up c.2pp YoYUS tariff refunds supported margin, though adjusted net margin fell to 9.7%.
• Bloks 1H26 gross margin44.3%, down 4.1pp YoYMold depreciation, new-product ramp-up and the RMB9.9 product mix weighed on margin.
• Pop Mart US credit-card sales-58% YoY in AugustSlightly improved from -63% YoY in July but remained weak.
• Miniso US credit-card sales+24% YoY in AugustAccelerated from +11% YoY in July.
• Bloks interim dividendHK$0.3247 per shareFirst interim dividend; implied payout ratio of c.18%.

Impact & implications

The report argues that category demand remains intact but sales trajectories will increasingly depend on launch cadence, comparison bases, IP popularity and execution by channel and geography. It sees Bloks as having the clearest overseas growth runway, while Pop Mart's high base and Miniso's deliberate overseas operational reset make their near-term outcomes more constrained. Margin recovery is not assumed: cost, mix and overseas-investment pressures remain important.

Risks

• Pop Mart faces risks from single-IP dependence, inability to broaden its IP portfolio, stronger competition and cost or operating-expense control challenges.
• Miniso faces risks from lower China store productivity, weaker global same-store sales or expansion, geopolitics, higher operating expenses and additional investment, and Yonghui's earnings performance.
• Bloks faces risks around IP longevity, channel and inventory management, brand awareness, customer-base expansion, market growth, competition, margins, returns and regulation.

What to watch

• September sales comparisons for Pop Mart against last year's Pin For Love and Big Into Energy supply releases.
• The reception of Miniso's LISA collaboration and continued performance of its new ChouChou IP.
• Whether Bloks' RMB9.9 Transformers momentum, new-category launches and overseas rollout sustain sales acceleration.
• Overseas high-frequency indicators, particularly Pop Mart US sales and app engagement, and Miniso US sales growth.
• Gross-margin effects from logistics, procurement, regional and product mix, tariff refunds and overseas operating leverage.
• Execution of Pop Mart's buyback, Miniso's FY26 shareholder-return commitment and the sustainability of Bloks' dividend.