Pop Mart: Gross margin expected to decline in the second half compared to the first half

On October 27, during today's Q3 earnings conference call for Pop Mart (09992.HK), company management stated that the group's gross margin for the second half of the year is expected to decline compared to the first half, with a drop of no more than two percentage points. The primary reasons for the decline in gross margin are twofold: first, the share of overseas revenue is projected to decline compared to the first half; second, to strengthen competitiveness in overseas markets, the company proactively adjusted prices for certain products in select overseas markets. As for expenses, the group plans to open a significant number of new stores in its core overseas markets in the second half of the year, resulting in increased fixed costs such as labor, rent, property fees, and renovation amortization. The overall expense ratio is therefore expected to exceed that of the first half. (Jin10)