After Hong Kong market close yesterday, POP MART released its interim results, which slightly exceeded expectations compared to the performance guidance issued on July 15. Revenue surged 204.4% year-over-year, above the guidance of no less than 200%. Net profit growth was projected to be no less than 350% excluding fair value changes of incomplete financial instruments, with actual net profit growth reaching 385.6% (including fair value changes).

Despite the stellar performance, POP MART shares opened 2% lower today and fell more than 3% at one point: POP MART

During the earnings call, POP MART founder Wang Ning stated that at the beginning of this year, management was confident about achieving 50% overall growth. Last year's revenue was 10 billion yuan, and this year they hoped to reach 20 billion yuan, but now it feels like 30 billion yuan should be easily achievable this year. Management also expects the company's net profit margin to continue improving in the second half, with full-year net profit margin reaching around 35%.

Following these comments, POP MART shares surged straight up, ultimately closing 12% higher at a new record high, with market capitalization breaking through HK$420 billion!

This financial report from POP MART is truly exceptional. Specifically, first-half revenue reached 13.876 billion yuan, up 204.4% year-over-year:

The reason for the explosive growth is well-known - LABUBU's global popularity, with queues and buying frenzies appearing everywhere. However, looking at IP revenue, it's not just LABUBU that's on fire. Legacy IP Molly generated 1.357 billion yuan in first-half revenue, surging 73.5% year-over-year; CRYBABY revenue reached 1.218 billion yuan, exploding 249% year-over-year; HACIPUPU revenue hit 330 million yuan, skyrocketing 249.5% year-over-year; Dimoo revenue reached 1.1 billion yuan, surging 192% year-over-year; SKULLPANDA revenue totaled 1.22 billion yuan, jumping 112% year-over-year; the newly launched Star Man generated 389 million yuan in first-half revenue, quite impressive!

Even non-exclusive IP revenue exceeded 1.5 billion yuan in the first half, growing 119% year-over-year:

POP MART's comprehensive success is truly remarkable. By region, overseas revenue growth far exceeded domestic growth, with Americas revenue reaching 2.26 billion yuan, exploding 1142% year-over-year:

High growth is no longer surprising for POP MART, but what's more shocking in the interim report is its profitability. In the first half, POP MART's gross margin exceeded 70%, with net margin reaching 33%:

This profitability has already surpassed luxury giant Hermes International SA:

Based on management's guidance of annual revenue exceeding 30 billion yuan with 35% net margin, POP MART's net profit this year should exceed at least 10.5 billion yuan! Based on this calculation, POP MART's P/E ratio this year is only about 37x:

At the beginning of 2024, during POP MART's performance trough and Hong Kong stocks' bear market year, POP MART's P/E ratio was still 20x. Now, with POP MART flourishing globally, a dynamic P/E of 37x is not expensive at all.

This is exactly what drives investors crazy. After hitting record highs, POP MART will likely continue its wild run!

Many investors worry that the LABUBU craze will be short-lived like other IP products, but looking at Molly, this IP has been selling well for 10 years and revenue is still growing rapidly. Even if LABUBU's growth slows due to a high base, POP MART can still launch new IPs, like Star Man introduced in the first half of this year, which generated nearly 400 million yuan in revenue right after launch, higher than some IPs that have been around for years, demonstrating POP MART's IP operation capabilities.

POP MART, having become a profit machine, will likely continue to surprise investors!