Financial Performance & Evaluation (DCF&P/E ratio included)

Revenue & Growth Rate

Revenue and growth trajectories are crucially important when we analyze a company. It showcases ups and downs the company has experienced, and more importantly, the potential it holds.

It is complicated to unbiasedly identify the trend due to the requirement of a standardized comparison. Thereon, we have to find another company whose industry is primarily based on toys. In this case, we will compare Pop Mart to another company, Hasbro. You may wonder, what is Hasbro?Hasbro is the toy& cartoon company which produced various famous characters, such as My Little Pony, Transformers, as well as saleable games such as Monopoly and Twister (Wikipedia).

While the majority of the revenue originates from consumer products, including plastic-based toy components, forming 61% of its total revenue. This graph serves as an evidence for the later comparison between Hasbro and Pop mart. Since these two are indeed comparable in the sense that they both are eminent companies inside the toy industry. Despite having a differentiating road to it’s success and growth. Pop Mart‘s revenue was 0.52 Billion USD in 2020 and steadily grew to 2.44 Billion USD in2024 which was approx 4 times higher. Hasbro’s revenue experienced growth in 2021 and then declined from  2022 to 2024. In 2024 Hasbro’s total revenue was  4.1 Billion USD, 17% decline compared with 2023. Hasbro reported that its consumer products segment (the company combines toys with other consumer-branded products under this section) declined 19% in 2023 and 12% in 2024.

As we can see from figure 3, Hasbro still have significantly more revenue than Pop Mart over the course of 4 years. This is inevitable in a sense since Hasbro started to be publicly traded in 1968 (hasbro.com), while Pop Mart has only been around since 2020. In addition, Hasbro is a much more mature company than the newly risen Pop Mart.

However, looking at the trendlines, we can still see that Pop Mart is growing rapidly, and uptrend, while Hasbro is yielding a downtrend.

Therefore, we characterize Hasbro as a stable and saturated market with constant high revenue; however, is currently suggesting signs of weakness due to the lack of innovation. While Pop Mart as a more volatile, energized, and surging.

Market Capitalization

Pop Mart has a market capitalization of 271.01 billion HKD, which is estimated to be 34.83 billion US dollars in the very end of 2025. This is already three times higher than Hasbro, who is at 11.45 billion USD market cap (at the same time). This suggests investors’ high hopes in Pop Mart’s future growth and its position in the toy industry as a newly joined competitor. According to figure 3’s trendlines, investors are investing in its future cashflow suggested by its recent expansions.

PE Ratio

PE ratio measures how much investors would like to pay on each dollar of this company’s profit.  Pop Mart’s P/E ratio in 2024 (last full fiscal year) is 72.97.

At first glance, this may seem absurdly high due to most companies usually only having a p/e ratio of 20-30. However, growth-oriented retail companies often trade with a higher ratio than those in more stable products if investors foresee a huge expansion in the immediate year after. In POP MART’s case, the elevated ratio is influenced by expectations of continued global growth and product success.

 

Further justifications for P/E ratio (click on the arrow to unfold)

1. Calculation method: P/E ratio was calculated by Pop Mart’s 2025’s stock price divided by its 2024 net income. However, in 2025, Pop Mart’s stock price has increased significantly following its global success of the Labubus, while in 2024 these affects weren’t taking into account since it hasn’t happened. This led to the magnification of the numerator and the shrinkage of the denominator, leading to a larger p/e ratio. Unfortunately, these are unavoidable while calculating p/e ratio, especially taking into account the last complete fiscal year is often preferred, making p/e ratio for rapid growth companies seem hyped up.

DCF (Discounted Cash Flow)

To evaluate the POPMART stock price using DCF, it is necessary to calculate the terminal value. Terminal value is the predicted value of the company’s all future cash flows beyond the explicit forecasted years (5 years), thus from 2031 onwards. Because it is impossible to forecast each year, the terminal value captures the long-term continuation in a simple form. The future cash flow is discounted back to today’s value. It takes into account of the time value of currency inflation, business risks which is reflected in the discount rate.

Terminal value formula:

For the growth rate of this company given it’s a relatively newly risen, growth oriented company we will give a terminal growth rate of 3.5%. For its discount rate we would use the calculated rate from an analysis website, 8.6%.

Terminal value:

Justification: The first fraction of this calculation is the total future cashflow discounted to the year 2030, however, due to the latest completed fiscal year being 2025, then we would have to discount the transferred 2030 value again back to 2025. This would therefore mean that we discount it by 1+0.0865^5 and therefore the second fraction is therefore justified. Meaning the total terminal value is 75243.12 USDmillion

Enterprise value: 2026-2030 discounted to 2025

Total company value: terminal + enterprise

Conclusion:

In the end we see that 87891.43 million USD is approximately 87.89billion USD; which suggests that the total worth of Pop Mart as a company and this is 2.5 times its given market capital (34.83billion USD). This suggests that Pop Mart (according to this specific DCF calculation variables, depreciation rate, growth rate etc.) is still worth buying in. In general, Pop Mart is a revolutionizing toy in today’s market, bring audience and consumers a new experience along with the emphasis of emotional value.

(See Work Cited on next page)

Pages: 1 2 3 4