On March 30, the stock price of Bubble Mart, the "first trendy play stock" favored by young people, rose by more than 10%, closing at HK$21.7 as of the day. Just on March 29, Bubble Mart handed over the 2022 report card. With the impact of the epidemic on the general environment of the consumer industry and the industry factors of rising supply chain costs, Bubble Mart still achieved growth against the trend.
The financial report shows that in 2022, Bubble Mart will achieve revenue of 4.62 billion yuan, a year-on-year increase of 2.8%; adjusted net profit of 570 million yuan, and a total of 26 million registered members.
Despite the multiple challenges encountered in the past year, Pao Mart IP still continues to exert its strength, and the classic IP and new IP still maintain a strong growth trend. In 2022, the revenue of the seven major IPs will exceed 100 million yuan. It is worth noting that while the domestic market is developing steadily, Bubble Mart has accelerated the pace of globalization, and its overseas market revenue has increased by 147.1% year-on-year, helping the company's goal of "transforming from China's Bubble Mart to the world's Bubble" further.
"2022 is a big challenge for us, but we believe that the entire industry has entered a stage of healthier and long-term development from disorderly competition." In the financial report conference call, Wang Ning, chairman and CEO of Pao Mart, said frankly, Judging from the performance in the first quarter of 2023, the speed of business recovery is better than expected. It is expected that this year's revenue will increase by 30% to 40%. The growth rate of net profit margin this year will be much faster than the growth rate of revenue scale.
The relevant research report of Tianfeng Securities pointed out that in the short term, Bubble Mart is expected to benefit from the recovery of domestic consumption, superimposed on the overall acceleration of overseas layout, continuous acquisition of market share and improvement of profit margins, driving the company's performance to continue to improve and valuation restoration; mid-term The growth mainly comes from the enrichment of IP matrix, the expansion of IP monetization methods (paradise, games, derivatives, etc.) and the enhancement of brand power.
Revenue increased by 147.1% year-on-year, overseas markets boosted new growth
Although faced with multiple challenges in the past year, Bubble Mart's overseas business is still ushering in a period of rapid growth.
The financial report data shows that in 2022, Bubble Mart’s overseas business will grow significantly, and its overseas market revenue will increase by 147.1% year-on-year. Among them, overseas offline channel revenue reached 150 million yuan, a surge of 2799.4%; overseas online channel revenue was 90.22 million yuan, a year-on-year increase of 119.2%.
Overseas stores and cross-border e-commerce are the main ways of Bubble Mart's overseas business. During the reporting period, Pao Mart accelerated its overseas business DTC (Direct To Customer) strategy, increasing the number of overseas stores to 43, 120 robot stores, and 13 cross-border e-commerce platform sites. While continuing to expand the Asian regional market, Bubble Mart also opened the first local offline stores in the United Kingdom, New Zealand, the United States, Australia and other places.
Changes in sales figures and user portraits also confirm the rise of Bubble Mart’s overseas brand influence.
Statistics show that the average monthly sales of the flagship store in South Korea and the first store in the western United States have reached around 2 million to 3 million yuan. Among them, when the American store opened, the ratio of locals to Chinese was 2:8, but now the ratio is 4:6.
Wang Ning said that in recent years, overseas business has been the fastest growing channel of Bubble Mart, which objectively reflects the love of overseas consumers for brands and products. In the future, overseas business will continue to be a bright spot for growth, both in terms of financial performance and operational growth.
In recent years, with the accelerated pace of internationalization, Chinese companies are shifting from "going global with products" to "going global with brands". More and more Chinese brands have more say in the international market, and it is the general trend for brands to go global.
As a "pioneer" in the trendy play field, Bubble Mart took the lead in expanding overseas markets as early as 2018. In the past five years, Bubble Mart has established a brand moat in overseas markets with "long-termism", and has successively brought Chinese fashion games to 25 countries and regions.
Looking at the world, Chaowan still has a broad market space. According to third-party data, the total size of the global trendy game industry will exceed US$34 billion in 2022. The scale of the global trendy game market will continue to grow at a compound annual growth rate of about 14% from 2022 to 2024. In 2027, the global trendy game market will exceed US$65 billion.
Wen Deyi, President of Bubble Mart International, said that it is estimated that by the end of 2023, the number of Bubble Mart overseas stores will reach 80-90, and the number of robot stores will be close to 200, of which 70% are located in East Asia and Southeast Asia, and 30% are located in Europe and the United States. Australian region.
Seven major IP revenues exceeded 100 million high-end product lines reached new heights
As a leading trend culture and entertainment company in China, Pop Mart has completed the layout of the entire industry chain around global artist discovery, IP incubation and operation, and trendy play culture for more than ten years. In this huge and rich trend culture ecology, IP has always been the ballast stone of Bubble Mart.
The data shows that in 2022, the revenue of the seven major IPs of Pao Mart will exceed 100 million yuan, supporting half of Pao Mart's revenue. The seven major IPs are MOLLY, SKULLPANDA, DIMOO, Little Sweet Bean, HIRONO Ono, The Monsters, and PUCKY, among which 5 major IPs come from Pao Mate’s own IP.
Among them, SKULLPANDA has an annual revenue of 850 million yuan, a year-on-year increase of 43.1%. The fifth series of Night City launched in January 2022 has an annual revenue of 230 million yuan, becoming a new "top stream"; MOLLY, as a 16-year-old The classic IP has an annual revenue of 800 million yuan, a year-on-year increase of 13.8%; the popular head IP DIMOO has a revenue of 580 million yuan, maintaining a strong vitality, which also confirms that the operation methodology of Pao Mate IP has matured.
In addition, the IP sweet beans and HIRONO Ono launched by the Bubble Mart PDC team achieved revenues of 150 million yuan and 140 million yuan respectively, of which HIRONO Ono increased by 169.4% year-on-year, and the annual income of the small cheating series exceeded 70 million yuan. Potential for growth.
In addition to the seven major IPs that carry the banner of revenue, the development of high-end product lines has become a new highland for Bubble Mart to build. Relying on strong IP influence and advantages such as supply chain and channels, the MEGA series products exploded in the market quickly once they were launched. In 2022, the revenue of the MEGA series, a high-end brand of Bubble Mart, will be 470 million yuan; in addition to MOLLY, DIMOO, SKULLPANDA, and LABUBU have all launched the MEGA series, and the MEGA series has entered a new stage of serial development.
Specifically, on the product line, 1000% Bubble Mart will put more emphasis on its tonality and separate the product lines. There will be product lines that are slanted by major artists, and there will be differences such as trendy life or original design. product line; and 400%, it is hoped that it will cover more people; the expected income ratio of 400% and 1000% is roughly 6:4.
"MEGA is a product line that we reflected more on last year. In 2022, the company put forward relatively high expectations for MEGA, but in the process, we found that both the market environment and consumers' demand for high-end trendy art products have changed. "The chief operating officer of Bubble Mart, Si De, said frankly, "At the beginning of this year, the company re-planned the entire product line, hoping that it will be in a more healthy state of development, and also hope that MEGA will become an independent brand line. This is a mid-to-long-term plan. "