• 3Q26 adj. PATMI exceeding our expectations while revenue missed slightly, reflecting weaker-than-expected Subscription Solutions revenue. 9M26 revenue/adj.PATMI was at 71% and 81% of our FY26e forecasts.
• Revenue grew 32% YoY, supported by growth in subscription solutions (+20% YoY) and merchant solutions (+36% YoY, with higher Shopify Payments penetration). Margins fell 130 bps YoY, due to a mix shift toward lower-margin Merchant Solutions revenue and higher AI-related costs in Subscription Solutions.
• We maintain our ACCUMULATE recommendation with an unchanged target price of US$170. We increase our FY26e revenue by 1% to account for the strong growth in merchant solution. We decrease Subscription Solutions gross margin from 82% to 80% to account for the higher AI cost. SHOP continued to benefit from resilient e-commerce spending, strong adoption of its software solutions and growing uptake of AI-powered analytics tools. It is also well positioned to capitalize on the shift towards AI-driven shopping.

Overview BLOKS is a leader in China’s assembly character toys market. The company holds over 500 patents, possesses original IP capabilities, and has non-exclusive licenses for approximately 50 well-known IPs. Its product positioning is “high quality at a reasonable price.” Leveraging its product strength and supply chain advantages, BLOKS maintains cost competitiveness while continuously expanding its product categories. The company has established a multi-channel sales network, and since 2022, has primarily focused on offline channels centered on distributors. According to...
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Overview POP MART is primarily engaged in the design and development of trendy toys. It operates a comprehensive platform covering the entire industry chain of intellectual property (IP) for trendy toys, with businesses including IP incubation and operation, trendy toys and retail, theme park and experiences, and digital entertainment. The company’s products include blind boxes, figurines, ball-jointed dolls (BJD), MEGA, plush toys, and derivatives, among others. Its self-developed products primarily feature artist-owned IPs such as THE MONSTERS, MOLLY, SKULLPANDA, and...
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