The performance conference reviewed the extraordinary achievements of the past six months, including the best performance, successful globalization overseas, and the healthy development of the IP platform. It also discussed the internationalization of the Labubu brand, thanked all parties for their support, and looked towards the future. Colleagues were invited to report on the annual situation and prepare to answer questions.

In the first half of 2025, Pong Pong Group's revenue reached 13.876 billion Chinese yuan, a year-on-year increase of 204.4%; net profit was 4.682 billion Chinese yuan, an increase of 385.6%. The gross profit margin increased from 64% to 70.3%, and the net profit margin reached 33.7%. China contributed 59.7% of the revenue, with 99.1% coming from proprietary products. Various plush products became popular, accounting for 44.2% of the revenue.

Pao Mate takes IP as its core, and expands its business through the three major sections of consumer goods, services, and experiences. In the first half of the year, the revenue of the five major IPs exceeded ten billion, with Rabobu achieving a year-on-year growth of 668%, becoming a world-class super IP. The company continues to explore a global strategy, expand into diverse product categories, with theme parks and content creation becoming important operational tools. At the same time, the dessert and jewelry business are well-liked by fans, and brand recognition has increased globally, achieving excellent performance in both China and overseas regions, with rapid growth in the US and European markets.

In the first half of 2025, the business in China achieved a revenue of 8.28 billion, a year-on-year growth of 135%. Both offline and online channels saw triple-digit growth, with retail store revenue exceeding 4.4 billion. The robot store achieved growth through category expansion. Online platforms such as Douyin and Tmall achieved significant results, with a shipment increase of over 180% and a significant increase in membership registration to 59 million. The overseas business situation was then introduced.

In the first half of 2025, Pop Mart's overseas revenue in the process of globalization reached 5.59 billion RMB, a year-on-year increase of 439.6%. By adding 70 new overseas stores, the revenue per store increased by 99.3%, and the proportion of revenue from e-commerce channels increased to 45.8%. The brand upgrade includes enlarging store space, optimizing location and design, and strengthening the integration of online and offline channels. By using live interactions, marketing activities, and function upgrades to improve user experience, the brand's influence and consumer conversion are promoted. In the future, Pop Mart will explore emerging markets such as the Middle East and Central Europe, continue to expand flagship stores in core cities around the world, and expand new business lines such as desserts and food to meet diversified consumer demands.

The conversation revolves around capacity planning and automation transformation, significantly increasing capacity through lean production and automation technologies, such as the application of fuel injection coating lines and laser quality inspection, reducing reliance on skilled workers. Emphasis is placed on grasping demand and collaborative operations, including horizontal integration and vertical integration, to ensure rapid transmission of instructions to production lines and teams of workers, achieving agile manufacturing and maximum collaboration.

Shared the application of new materials and new processes such as multi-color co-molding injection and sand mold 3D printing technology in product innovation, emphasized the leading role of new standards in industry development, including collaborating with institutions such as Guangzhou Customs to release product standards, and engaging in joint research and development with well-known domestic and foreign universities and research institutes to jointly outline the grand blueprint for the future development of the industry.

The management emphasizes the company's performance growth while paying more attention to the health of the business, such as the platformization of IP and the growth of store quality rather than quantity. The globalization layout in the North American and Asia-Pacific markets has performed well, with sales in North America expected to be similar to domestic sales by the end of the year, despite having fewer stores. The company also has high expectations for the European market, believing that the globalization strategy has achieved good initial results. In the future, the company will continue to focus on balancing performance and health, and promote the balanced development of the IP family.

Discussed the enormous potential and purchasing power of the American market, as well as the strong demand for peripheral products of IP design. Emphasized product quality, leading technology, and the maturity of the retail market. By opening stores in core commercial real estate projects and leveraging social media to accelerate business growth. The United States, as a global trendsetter, helps brands gain good reputation in many countries. Plans to accelerate the expansion of offline stores in the future, leveraging the entertainment industry and talent resources in the United States to drive global development of the company.

The conversation revolves around the sustainability of IP sales ratio and the development limit of a single IP, exploring the importance of balanced development of IP matrix. At the same time, it discusses the possibility of accelerating the pace of opening stores in the context of globalization, as well as the optimistic assumptions of overseas markets and the analysis of the breakdown of long-term development space in various regions.

The dialogue focused on the balanced development of IPs and the vast prospects of overseas markets, emphasizing the importance of diverse IPs for the health of the platform. It also shared the enthusiastic response to opening stores in countries such as Germany and Thailand, and plans to accelerate global expansion, especially in untapped markets in the Middle East and South America. At the same time, there is a focus on improving the quality of stores in the United States rather than simply pursuing quantity.

The discussion revolves around the global influence of the IP "Labbu" and its future growth points, emphasizing its commercial value as a world-class IP. It mentioned maintaining the vitality of the IP through product development and cooperation, as well as sharing specific measures and effects of optimizing domestic store operations, and looking forward to the future space for store optimization.

The conversation introduced the optimization measures for domestic stores in the first half of the year, including location optimization, talent upgrading, and display upgrading, which increased customer traffic and sales per customer. Through system upgrades, waiting time for customers has been reduced, improving the shopping experience. Future planning involves more precise allocation of goods to meet the consumption habits of consumers in different regions.

The discussion on the convergence and differences of IP and product preferences in various regions under the background of globalization emphasized that the popularity of flagship IPs is similar, but different regions have prominent characteristic IPs. The product category structure tends to be balanced, with certain products initially having high popularity, but over time, it will tend to balance out. In terms of the supply chain, there are plans to increase capacity matching through the six global production bases, emphasizing the accuracy of demand forecasting and flexible supply chain management to improve response speed and data capabilities, achieving a dual enhancement of supply chain health and flexibility.

The conversation centered around the global organizational structure adjustment of the company and its effectiveness, emphasizing the importance of management flexibility and localization in the process of globalization. At the same time, the differences in profit margins in different regions were discussed, pointing out that the Americas and China regions have higher profit margins due to high commodity prices and operational efficiency, while the Asia-Pacific and Europe regions are increasing profit margins through economies of scale. It is expected that future profit margins will further increase with revenue growth and operating leverage, with a target net profit margin of around 35% in 25 years.

Membership operations data show that the quality of new customers is improving, with a significant increase in new customers in the plush category, and an increase in consumers' cross-channel purchasing behavior. Gum products are mainly purchased by existing customers, but the growth rate of new customers is higher than that of existing customers. The performance of the official overseas app download ranking is excellent, and there are regional differences in online platform consumption behavior.

The conversation discussed the high repeat purchase rate of new customers for the brand and its impact on the purchasing behavior of other categories and IP, emphasizing the non-deterministic correlation. It was mentioned that the overseas official website's app covers 37 countries, with apps launched in 34 countries, and the shopping category ranks first in Apple Store in the US, Australia, and Singapore. The next day retention rate is over 50%, with a high proportion of online platforms, especially in the US, which is close to 50%. Domestic operational experience such as WeChat channels, Douyin, Tmall, etc., are being replicated overseas, with TikTok's sales in the US ranking top three and Amazon being an important channel. Localized operations in the Asia-Pacific region such as AliExpress and Shop are growing rapidly on TikTok. Online volume in Europe is small, and there are plans to increase investment to increase the proportion of online revenue.

The conversation delved into investment plans for the supply chain in new materials, new processes, and automation transformation, as well as differentiated product and content operation strategies for diverse consumer groups. It emphasized the importance of building a unified channel ecosystem and improving efficiency across all channels.

The company reviewed its globalization strategy of the past five years, emphasizing that in the future, it will focus on driving group and diversified development around IP as the core, including the iterative optimization of theme parks, videos, building blocks, and other businesses. Although some businesses are facing challenges, overall, the company is confident in the extension of IP and looks forward to injecting new growth points for the company in the coming years.