Pop Mart was shorted, with its market value evaporating over 200 billion yuan, marking a temporary end to the 'going global' dividend

The story of the capital market continues to unfold in cycles, with leading companies at the forefront completing their transformations within just a few years.

When the hype fades, the once-envisioned future turns into a bubble, and performance becomes the ultimate destination.

Entering the second half of 2024, Pop Mart and Lao Pu Gold became the new darlings of the Hong Kong stock market. With market support, Pop Mart hit a historic high. At its peak, its helmsman Wang Ning surpassed Qin Yinglin, founder of Muyuan Foods, with a net worth of over $28 billion, becoming the "new richest person in Henan."

As the new "social currency" for young consumers worldwide, most young people consider owning a Labubu as a new social tool, successfully breaking Pop Mart's blind box dilemma. This also signals that the company has smoothly moved past its wild growth phase and officially become a globally influential IP company.

In Europe and the U.S., Labubu has gained favor among many international celebrities, quickly becoming a global hit. Some limited or collaborative editions have even sold for sky-high prices in the tens of thousands.

Against this backdrop, Pop Mart's helmsman Wang Ning not only successfully "broke the circle" but also gained fame and fortune.

The success of overseas expansion, coupled with the favor of the global youth market, has redefined Pop Mart in the capital market. As a result, Pop Mart's stock price broke through HK$100, HK$200, and HK$300 in succession. At its peak, Pop Mart's market cap once exceeded HK$450 billion.

The 疯狂的 market pricing made Pop Mart's core investor Tu Zheng also very restless. By May this year, Tu Zheng had almost completely divested his holdings in Pop Mart. Notably, his 减持 had actually started as early as May last year, when Pop Mart's stock price was still only at the "mid-mountain" level.

After completing the 减持， Tu Zheng stated: "From the first investment at the angel stage to the final sale, I have accompanied the company for a full 14 years—First in, Last out. The journey has been full of ups and downs, grand and magnificent. Holding on until now, I am deeply reluctant to part and filled with gratitude."

Famous investor Duan Yongping also expressed high praise when evaluating Pop Mart. He said that although he doesn’t understand Pop Mart and wouldn’t invest in or buy its stock, Pop Mart's ability to turn emotional value into such a product is not just a random success and cannot be attributed to luck.

Looking back, a company's popularity cannot last forever. When the tide recedes, young people's discussions about Labubu have already decreased, and Pop Mart's stock price has fallen more than 40% from its peak, with its market cap evaporating HK$200 billion. Institutions that were bullish on Pop Mart just a few months ago have collectively "gone silent." The real test for Pop Mart has only just begun.

"Going Global" Is Not a Panacea

In 2020, Pop Mart, under the 光环 of being the "first stock in 潮玩，" successfully listed on the Hong Kong Stock Exchange. The 加持 of the blind box economy and 超高的业绩增速 propelled Pop Mart's market cap to 突破 HK$140 billion.

The scarcity of hidden editions fully 调动了 young consumers' psychology. With scalpers 推波助澜， some of the more famous hidden editions even saw prices multiply by dozens of times, earning Pop Mart the nickname "the 茅台 of the post-90s generation."

But what Wang Ning and Pop Mart didn’t expect was that the 疯狂 blind box economy would eventually attract regulatory attention.

Under the "red line" of operations, the bubble of the blind box economy was quickly "punctured." By mid-2022, Pop Mart's performance had already stalled, with its stock price dropping below HK$9 at its lowest.

At that time, most investors had lost confidence in Pop Mart.

Under the "double whammy" of performance and stock price, Wang Ning also tried to pitch new stories to 重新 attract investors, including overseas expansion and investments.

In 2023, the 爆发 of overseas markets gave Wang Ning a new direction. At the earnings briefing that year, Wang Ning stated that overseas revenue was expected to exceed the group's pre-IPO income, effectively recreating a Pop Mart.

The success of the overseas strategy saved Pop Mart and helped Wang Ning find the company's second growth curve. But for Pop Mart, going global is not irreplicable—contemporaries like Miniso also achieved great results overseas. This means that Pop Mart's second success was more about choice than effort.

By 2025, the 爆火 of Labubu made young people worldwide remember Pop Mart and this young Chinese IP. But it must be noted that as the complexity of overseas markets intensifies, the strategy of going global is no longer a panacea.

Kan Jian Finance believes that because any IP has a cycle, the sustainability of a 爆款 product still needs further market validation. Therefore, it is 预计 that as the explosive growth of overseas markets stabilizes, Pop Mart's 业绩增速 will also decline.

Notably, the 炒作的股价 has already 提前透支了 Pop Mart's future performance expectations, and many institutions have already chosen to cash out.

Data shows that the number of funds heavily invested in Pop Mart dropped from 286 at the end of Q2 to 180 at the end of Q3, with the number of shares held decreasing from 63.33 million to 43.82 million, a drop of about 31%.

Entering the Performance Realization Stage

The realization of valuation ultimately depends on performance.

In Q3 this year, Pop Mart continued its high-growth momentum from the first half, with overall revenue 同比增长 245%-250%. Among them, revenue from the Chinese market grew 185%-190% year-on-year, while overseas market revenue surged 365%-370%.

By region, Pop Mart's 亚太 market grew 170%-175%; the Americas market grew 1265%-1270%; and Europe and other markets grew 735%-740%.

Despite the 暴增 in overseas performance in Q3, Pop Mart's stock price showed no significant improvement and instead accelerated its decline.

Previously, the launch of Pop Mart's new Labubu products saw 明显下降 in 热度， with secondary market premiums 显著回落. The 溢价幅度 for hidden editions 缩水 over 50%, while the 常规款 3.0 and 4.0 editions were already selling below 官方 retail prices on 二手 platforms.

Some analysts noted that investors are concerned that Pop Mart's revenue growth may peak this year, with growth momentum likely to slow from next year onward.

Bernstein's Asia consumer analyst in Hong Kong, Hu Meilin, pointed out that Pop Mart's 股价走弱 is "largely due to the weakening offline sales trend in North America throughout November." She estimates that Pop Mart's U.S. sales growth this quarter has already slowed to below 500%.

Morgan Stanley released a research report stating that Pop Mart is transitioning from the "explosive growth" phase of the past two years to a "sustainable growth" phase in the future.

The institution 预计 that Labubu's sales in 2025 will reach RMB15.5 billion, a 41-fold increase from 2023. However, due to the high base, Pop Mart's revenue growth for Labubu in 2026 will significantly slow, as some trend-following consumers may not return. Given the lower advertising and promotion expense ratio, lower price cuts, higher proportion of online direct sales, and lower rental ratios, Morgan Stanley believes Pop Mart can maintain a net profit margin growth of about 30%. As a result, the institution lowered its target price for Pop Mart.

Deutsche Bank, meanwhile, released a report stating that to meet surging demand, Labubu's production capacity increased from 10 million units in the first half of the year to an average of 50 million units per month by year-end. For trendy toys that rely on "cool" and "scarce" attributes, popularity is often a precursor to 衰退. The report noted that since August this year, the market 溢价 for Labubu and other 热门 IPs has begun to 消退. Among them, the 溢价幅度 for Labubu hidden editions has 缩水 by over 50%, while the 常规款 3.0 and 4.0 editions are already selling below 官方 retail prices on 二手 platforms.

Deutsche Bank also warned that Pop Mart is facing an "availability paradox," where the market is accustomed to linearly projecting the future based on the explosive growth of 2025. However, the current strong growth driven by Labubu 掩盖了 the significant risk of 供需反转 for Pop Mart.

Kan Jian Finance believes that as Labubu's 热度 gradually declines, the 海外 market's slowing growth will become a major concern. Once overseas growth slows, the market will revalue Pop Mart's valuation, and the company could face a "double whammy" of performance and stock price.

Additionally, it’s worth noting that the 估值泡沫 has already 严重透支了 Pop Mart's future stock price growth potential. From this perspective, as performance slows, the 危机 Pop Mart faces may be even more 剧烈 than last time. We believe that as the stock price falls, a more cautious approach should be taken toward Pop Mart to 随时关注业绩 changes and make adjustments accordingly.$POP MART(09992.HK)