Consumer Staples Author：Yiru Qian Editor：Tao Ni Mar 29, 2022 11:47 PM (GMT+8)

Small blind boxes, big business

Pop Mart products

Pop Mart (0002:HK) (Chinese: 泡泡玛特) reported a revenue of CNY 4.49 billion (USD 704.8 million) for the year ended December 31, 2021, up 78.7% year-on-year.

According to the financial report filed on March 28, Pop Mart posted a gross profit of CNY 2.76 billion in 2021, surging by 73.05% compared with the last year.

The company also reported an adjusted net income of CNY 1.002 billion last year, registering a year-on-year increase of 69.6%.

As of December 31, 2021, Pop Mart accumulated 19.58 million registered members, who contributed 92.2% of the company's sales with a repurchase rate of 56.5%; in other words, over a half of the members made a second purchase.

In terms of channels, revenue from online sales took the lead, which spiked 97.4% year-on-year from CNY 951.9 million in 2020 to CNY 1.88 million in 2021. Sales from retail stores and roboshops increased by 67.0% and 42.9%, respectively, compared with last year.

The company’s distribution and selling expenses also witnessed a huge leap, up 75.5% from CNY 630.1 million in 2020 to CNY 1.1 billion in 2021. Among them, the advertising and marketing outlay for online channels and events accounted for a higher proportion.

One of the company’s core competitiveness is the intellectual property (IP). According to its annual report of 2021, revenue from those propriety products contributed 88.6% of the total revenue. Its top IP MOLLY series hit a revenue of CNY 705 million in the reported period, representing a jump of 97.6% year-on-year.

In 2021, Pop Mart launched 106 new bricks-and-mortar stores and 510 new roboshops in mainland China. As of the end of 2021, it also opened 7 stores and 9 roboshops in Hong Kong SAR, Macau SAR, Taiwan and overseas, which generated CNY 137.4 million in revenue.

A bunch of art toy brands has received a fair share of attention for their roles in helping to fulfil people’s gambling psychology and emotional value. They include IP Station, ToyCity, Xinghui Creations, IPSTAR, Alpha Group (002292:SZ), 52Toys, to name but a few, and Pop Mart is one of the best examples and the face of the industry.

As of press time, Pop Mart’s stock price closed 7.58% higher at HKD 33.35 (USD 4.26) with a market capitalization of HKD 46.75 billion.