Haitong International: Raises target price for Babytree Group to HK$316.7, with high assurance of sustainable performance.

Haitong International released a research report stating that the performance forecast of Pop Mart in the first half of this year exceeded expectations. The main reason for the significant year-on-year growth in the company's performance is that Pop Mart's global recognition of its IP has increased, diversified product categories have promoted high-speed growth in revenue in various regions; the proportion of overseas revenue continues to increase, the change in revenue structure has a positive impact on gross profit margin and net profit margin, and scale effect has been enhanced; product costs continue to be optimized, expense control has been strengthened, and profitability has been improved. Looking ahead, Pop Mart has transitioned from early dependence on the MOLLY single IP product to the rise of PUCKY, DIMOO, and SKULLPANDA, followed by the recent success of THE MONSTERS and CRYBABY. The global recognition of Pop Mart's IP continues to rise, and there is a supply shortage in multiple countries. The company's long-term operational capability of IP has been fully verified, the risk of relying on a few IPs continues to decrease, and the sustainability of performance is highly guaranteed. The target price has been raised by 60% to HK$316.7, and the rating of "outperform the market" is maintained.