Morgan Stanley cuts Pop Mart’s target price by 13%, citing pressures including a high base effect.

Morgan Stanley cut Pop Mart’s target price from HK$247 to HK$214, citing high base pressure in the second half of the year and a sharp slowdown in overseas sales. Analysts noted in the report that amid a lack of incremental information and high-frequency data pointing to a sharp slowdown in overseas sales, investors are broadly bearish ahead of the earnings release, anchoring on the most negative metrics. Excessive expectations among retail investors remain a key downside risk, as they account for a large proportion of the shareholder base. The firm forecasts 29% year-on-year growth in first-half revenue and an 18% rise in net profit to RMB 5.4 billion. It expects management to guide for second-half revenue exceeding the first half, while remaining cautious on the year-on-year outlook. Morgan Stanley maintained an "Overweight" rating, projecting a 13% compound annual growth rate (CAGR) in earnings from 2026 to 2028, driven mainly by a reacceleration in overseas market sales, and forecasts total revenue will resume growth in 2027.