The share price of Minor International rose 3.5% to THB 25.25 per share in the morning session on Thursday following the optimistic outlook from J.P.Morgan on the company’s hidden value in Pop Mart Thailand.
Pop Mart Thailand, the local distributor of collectible art toys from the globally popular brand Pop Mart, has quickly become a rising star in Thailand’s retail scene—and an unexpectedly valuable asset for Minor International PCL (SET: MINT). Since launching its first physical store in September 2023, Pop Mart Thailand has expanded to six locations and has plans to open more in key tourist areas by 2025.
J.P.Morgan wrote in its analytic paper that behind the eye-catching figurines and viral toy unboxings is a business model that’s delivering serious returns.
A Joint Venture Between Pop Mart and MINT
Pop Mart Thailand is a joint venture (JV) between the original Pop Mart company and MINT. Under this structure, Pop Mart holds a 58% stake, while MINT owns the remaining 42%. This setup allows MINT to tap into the fast-growing demand for lifestyle and collectible retail products without owning or developing the intellectual property (IP) itself.
Strong Financial Performance in 2024
The business has shown remarkable financial performance in 2024, generating 5.3 billion baht in revenue and 1.6 billion baht in net profit. Its success is not just a win for the joint venture but also a major contributor to both parent companies:
- According to J.P.Morgan’s calculation, Pop Mart Thailand accounted for 9% of Pop Mart’s global sales and 6% of its global net income, after adjusting for MINT’s ownership.
- For MINT, the venture contributed around 8% of its core profit in 2024, up from nearly zero in 2023.
- Even more striking, 40% of MINT’s core profit growth in 2024 came from Pop Mart Thailand alone.
Pop Mart Thailand: A “Hidden-Value” Asset
What makes this JV especially interesting for investors is its classification as a “hidden-value asset” in MINT’s portfolio. MINT owns 42% of the JV, but this stake is recorded on its balance sheet at under 1 billion baht. In contrast, market estimates suggest that MINT’s stake could be worth as much as 27 billion baht.
This significant gap is largely due to accounting practices—MINT uses book value to record the investment, which does not reflect the JV’s market value. Analysts arrive at the estimated 27-billion-baht valuation by applying a P/E (Price-to-Earnings) ratio of 40x to Pop Mart Thailand’s earnings—a conservative discount from Pop Mart’s own high P/E of 80x, recognizing the JV’s role as a retailer rather than an IP owner.
Implications for MINT’s Financial Position
This hidden value isn’t just a paper gain—it could have real-world financial implications for MINT. The estimated value of MINT’s stake in Pop Mart Thailand is equivalent to 28% of MINT’s total debt. Although MINT has made no indication of selling its stake, analysts suggest that if it did, and used the proceeds to repay debt, the company’s net gearing ratio could fall from 0.83x to 0.53x. Such a reduction would signal improved financial health and reduced reliance on borrowing.
Conclusion
Pop Mart Thailand is more than just a trendy toy retailer—it’s a fast-growing, highly profitable venture that’s quietly transforming MINT’s earnings landscape. With strong financials, strategic expansion plans, and a significant (yet underappreciated) contribution to MINT’s value, the JV stands out as a prime example of a hidden gem in a diversified conglomerate’s portfolio. Investors may want to keep a closer eye on how MINT continues to leverage this asset—or if it ever decides to unlock that hidden value.
