Damo: The target price for Bubble Mart (09992) “gain” rating was raised to HK$69

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Bubble Mart (09992) is expected to have strong sales in the third quarter and continued growth in overseas markets. As a result, the forecast and target price were raised for the fifth time this year, raising the company's target price from HK$55 to HK$69, with a rating of “increase in holdings.”

Damo expects Bubble Mart's third-quarter revenue to increase by 70% to 75%, Chinese revenue to rise 30% to 40%, while overseas revenue will increase by more than 200%, mainly driven by store openings, IP popularity in the market, and new product launches. As for the fourth quarter, sales are expected to increase by 55% to 60% to reflect the LABUBU (LABUBU) boom or decline, but if the boom continues, sales growth in the fourth quarter may reach about 70%, bringing an additional 2 to 3% upward space for the full year's revenue forecast.

The report raised Bubble Mart's sales forecast for 2024 to 2026 by 1 to 7%. Growth is expected to be 63%, 28%, and 21% for these three years, respectively. Sales forecasts for China remain largely unchanged, with growth of 32%, 15%, and 11% from 2024 to 2026, respectively, as there will be a significant improvement in consumer sentiment without taking into account the significant improvement in consumer sentiment. Damo also raised Bubble Mart's adjusted profit forecast by 2 to 12%, and is expected to increase by 84%, 32% and 20% respectively over the past three years.