Shares of Pop Mart tumbled more than 22% on Wednesday, as investors grew increasingly concerned about the sustainability of growth driven by the company’s blockbuster collectible doll, Labubu.
The sharp sell-off came despite strong annual results from the Beijing-based toymaker. Pop Mart reported 2025 revenue of 37.1 billion yuan ($5.4 billion), representing a 185% year-on-year increase, though slightly below expectations of 38 billion yuan.
Net profit surged more than fourfold to 12.8 billion yuan, exceeding forecasts of 12.6 billion yuan.
Despite the robust headline figures, analysts pointed to signs of slowing momentum.
Jeff Zhang, equity analyst at Morningstar, said a noticeable slowdown in the fourth quarter has intensified investor concerns about the longevity of the company’s key intellectual properties.
He added that the company’s decision to cut its dividend payout ratio to 25% in 2025, down from 35% the previous year, further weighed on sentiment.
The global success of Labubu, known for its distinctive sharp-toothed design, has been the primary driver of Pop Mart’s growth. However, investors are increasingly questioning whether the company can replicate that success with newer characters.
While newer franchises such as Skullpanda and Twinkle Twinkle have shown growth, they remain significantly behind Labubu in revenue contribution.
Sales of Skullpanda more than doubled to 3.54 billion yuan, while other lines like Crybaby and Dimoo nearly tripled.
Still, the “Monsters” series, home to Labubu, accounted for 38% of total annual revenue, up from 23% in 2024, generating 14.2 billion yuan alone.
By comparison, newer characters such as Hirono and Twinkle Twinkle posted revenues of 1.74 billion yuan and 2.06 billion yuan, respectively.
Billy Leung, analyst at Global X ETFs, said investor sentiment remains split.
“Optimists are focused on continued monetization of intellectual property and international expansion, while skeptics question the sustainability of growth and cyclical risks,” he noted, adding that the latest earnings failed to bridge that gap.
CEO Wang Ning attempted to calm investor concerns during the earnings call, emphasizing that the company’s future extends beyond Labubu.
“Pop Mart is more than Labubu,” he said, likening market expectations to “a rookie driver suddenly thrown into a Formula 1 race.”
The latest decline reflects a broader cooling in investor sentiment that has persisted since last year, according to Sean Rein, managing director at China Market Research Group.
He added that investors who had built short positions over the past six months, betting that Pop Mart’s appeal was temporary, began covering those positions on Tuesday, accelerating the stock’s decline.
After a massive rally, the stock has now lost roughly 50% from its peak in August, despite soaring more than 340% in 2024 and gaining around 110% over the past year.
Source: AFP
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