Pop Mart (泡泡玛特) stuns with peak 2025 numbers — yet shares plunge as growth story frays

Blowout results, brutal market reaction

Pop Mart (泡泡玛特) delivered an eye‑popping 2025: revenue jumped 185% to RMB 37.12 billion and net profit rose 309% to RMB 12.8 billion, with adjusted net profit of RMB 13.08 billion (up 284.5%). Short and sharp. So why did the stock waterfall — a one‑day fall of 22.51% wiping roughly HK$65.6 billion of market value, followed by another >10% decline? Investors say the answer is not the headline numbers but the narrative: signs of concentration risk, a normalization of growth guidance for 2026, and an unpopular move into licensed small‑appliances that some see as shrinking Pop Mart’s “sex appeal.”

Who sold, who bought — and the short‑term story

Trading data show active buyers marginally outweighed sellers (active buy‑sell ratio ~52:48) with a net active buy of about HK$494 million, indicating buyers stepped in to absorb most selling. But the heaviest sellers on the day were foreign banks and institutions — names such as Citigroup, Standard Chartered and Morgan Stanley — while buyers included mainland southbound flows and brokers like Futu and CICC. It has been reported that many of those foreign houses had issued very bullish price targets in the months before results; some market participants therefore privately speculate about tactical repositioning by hedge funds once reality failed to meet sky‑high expectations. There is no hard evidence of collusion, however, and such allegations remain unverified.

The business beneath the volatility

The underlying business is more nuanced than headlines suggest. Pop Mart’s IP engine remains strong: six characters passed RMB 200m in 2025 sales (SKULLPANDA RMB 3.54b, CRYBABY RMB 2.93b, MOLLY RMB 2.90b, DIMOO RMB 2.78b, and “Starry”/星星人 RMB 2.06b), and new‑and‑fast growers saw triple‑ and quadruple‑digit rises (Starry +1,602%). LABUBU’s meteoric rise increased its share of sales from ~23% to ~38% and accounted for roughly 45% of last year’s incremental growth. But investors worry: is this a sustainable multi‑IP ecosystem or a single‑hit cycle? Inventory days rose from 102 to 123, overseas logistics costs jumped 280% to RMB 1.78 billion, and Q4 supply timing issues exposed execution risks as Pop Mart pushed farther overseas.

Strategy, geopolitics and the path forward

Some shareholders disliked Pop Mart’s pivot into small appliances — kettles, coffee machines and the like — even though the company is pursuing an OEM licensing model similar to Disney or Sanrio, not entering manufacturing. Why the backlash? Licensing signals a change in the growth narrative: from pure high‑margin collectible IP to brand extensions with different unit economics, which compresses the “imagination space” investors buy into. Overseas expansion (Americas and Europe grew fastest but from a small base) and planned U.S./EU store rollouts are the next lever for 2026, yet they come amid higher logistics costs and broader US‑China trade frictions that add execution risk. Bottom line: the stock is repricing from expected hypergrowth to a more linear scenario — the question for investors is whether Pop Mart’s IP pipeline and store/upgrading strategy can reliably deliver that next chapter.