$POP MART(09992.HK)

Pop Mart: Is the Labubu Fever Breaking?

According to The Straits Times (2 April), Pop Mart’s staggering $42 billion valuation wipeout signals a “Labubu-sized” identity crisis. Investors are pivoting away from treating the toy maker as a high-flying, tech-adjacent firm, focusing instead on the structural risks of it being a fleeting consumer trend.

🔹 Technical Snapshot: Catching a Falling Knife?

❤️ On the 4H chart, it shows a clear vertical selloff from HKD 220–230 zone down to 141.8.

❤️ Bollinger Band Exhaustion: The price is “hugging” the lower band (HKD 112.8). While technically overextended, the absence of a meaningful bounce suggests sustained selling pressure rather than an imminent reversal.

❤️ RSI Conditions: The RSI is deep in oversold territory at 25.39. Current momentum is so bearish that the RSI is simply “sliding” along the floor.

❤️ Resistance Levels: The 20-period SMA (blue line) at HKD 169.1 serves as the immediate ceiling.

🔹 Fundamentals Snapshot :

❤️ IP Over-Concentration: Labubu accounted for nearly 40% of 2025 revenue. This extreme reliance creates a “single point of failure”.

❤️Inventory Red Flags: Inventory turnover has spiked to 123 days. This suggests that while production remains high, the “sell-through” rate is decelerating.

❤️Valuation De-rating: Now trading at 10.3x forward earnings, the stock sits at a record-low valuation. However, the market is pricing in a “growth trap”.

❤️My Verdict: Patience Over Panic

Pop Mart is currently a high-risk contrarian play, with high rewards. While the valuation is objectively tempting and management is active with share buybacks, the technicals have yet to signal a definitive bottom.

Stay prudent, wait for a “basing” pattern. Look for the price to consolidate between HKD 140–150 for several sessions without posting new lows.

Not financial advice. Trade safety and stay vigilant at all times.