Morgan Stanley lowered the target price for Bubble Mart from HK$247 to HK$214, saying that the company faced high base pressure in the second half of the year, and overseas sales slowed sharply. Analyst Dustin Wei and others said in the report that due to lack of incremental information and high-frequency data showing a sharp slowdown in overseas sales, investors were generally bearish because they anchored the most favorable data before the results were announced. Excessive expectations from retail investors are still a major downside risk, as they account for a large share of the shareholder structure; forecast a 29% increase in sales in the first half of the year and an 18% increase in net profit to RMB 5.4 billion; expect management to guide sales in the second half of the year over the first half of the year while remaining cautious about the year-on-year outlook; maintain an “increase” rating because it is estimated that 2026-2028 will reach a compound annual growth rate of 13%, mainly driven by a renewed acceleration in sales in overseas markets; and total sales are expected to resume growth in 2027. Note: Bubble Mart will release results this Thursday.

Morgan Stanley lowered the target price for Bubble Mart from HK$247 to HK$214, saying that the company faced high base pressure in the second half of the year, and overseas sales slowed sharply. Analyst Dustin Wei and others said in the report that due to lack of incremental information and high-frequency data showing a sharp slowdown in overseas sales, investors were generally bearish because they anchored the most favorable data before the results were announced. Excessive expectations from retail investors are still a major downside risk, as they account for a large share of the shareholder structure; forecast a 29% increase in sales in the first half of the year and an 18% increase in net profit to RMB 5.4 billion; expect management to guide sales in the second half of the year over the first half of the year while remaining cautious about the year-on-year outlook; maintain an “increase” rating because it is estimated that 2026-2028 will reach a compound annual growth rate of 13%, mainly driven by a renewed acceleration in sales in overseas markets; and total sales are expected to resume growth in 2027. Note: Bubble Mart will release results this Thursday.