Performance soars, stock price plummets! Pop Mart's market value evaporates by over 86 billion in less than two days

(Source: First Wind)

On March 25, Pop Mart (09992.HK) staged a shocking “performance reversal”: plunging nearly 24% intraday and closing down 22.51%, with over HKD 65.6 billion in market value evaporating in a single day, bringing the closing market cap to HKD 225.7 billion.

By midday on March 26, Pop Mart’s stock continued to face heavy pressure, trading at HKD 152.6, down another 9.33% from the previous day’s close. The intraday low was HKD 150.2, with a half-day trading volume of HKD 9.919 billion, and the total market cap further shrank to HKD 204.637 billion. Since its peak of HKD 339.8 in August 2023, the stock has fallen over 54%.

However, this financial report that the capital market “voted with its feet” is actually Pop Mart’s strongest performance in history: full-year revenue of RMB 37.12 billion, a surge of 184.7% year-over-year; net profit of RMB 12.78 billion, up 308.8%; and gross profit margin reaching a record high of 72.1%. Overseas revenue exceeded RMB 16 billion, and the super IP LABUBU’s annual sales surpassed RMB 10 billion, with ample cash flow.

From “doubling performance” to “market value evaporation,” this stark contrast directly reflects market fears that the high-growth myth is ending. Why did a stellar earnings report become the trigger for a stock price collapse?

Net profit tripled

Market value lost HKD 65.6 billion in one day

2025 is expected to be Pop Mart’s year of explosive growth. The full-year revenue reached RMB 37.12 billion, up 184.7%; net profit attributable to shareholders RMB 12.776 billion, up 308.8%; adjusted net profit RMB 13.08 billion, with an adjusted net profit margin of 35.2%. Gross profit margin hit a record high of 72.1%. Overseas markets became the core engine, generating RMB 16.27 billion, a 291.9% increase, accounting for 43.8% of total revenue, with growth rates in the Americas and Europe exceeding 7 times and 5 times respectively. Customer repurchase rate increased to 55.7%, global stores reached 630, and the IP matrix continued to expand, with six IPs earning over RMB 2 billion annually and 17 IPs exceeding RMB 100 million.

Notably, its super IP LABUBU supported half of the business, with THE MONSTERS family (including LABUBU) revenue at RMB 14.16 billion, up 365.7%, nearly 40% of total revenue, comparable to the combined scale of SKULLPANDA, CRYBABY, MOLLY, DIMOO, and Star People. Among new IPs, Star People performed remarkably, with annual revenue of RMB 2.06 billion, a 1602% increase, ranking in the company’s top 5 IPs. Plush toys became the largest business segment, with RMB 18.71 billion in revenue, over half of total, driving growth. In 2025, Pop Mart’s cash flow remained healthy, with cash and cash equivalents rising from RMB 6.109 billion to RMB 13.775 billion, and annual dividends of about RMB 3.194 billion.

Pop Mart founder and chairman Wang Ning clearly defined 2026 as a “rest year” during the March 25 earnings release, setting a growth target of no less than 20%. He admitted, “We have proactively shifted from high-speed racing mode to a ‘service station refueling and tire change’ phase. In 2026, we won’t focus on speed but on consolidating our foundation.”

However, on the day of the earnings release, March 25, Pop Mart’s stock opened at HKD 223.4, with a maximum intraday drop of nearly 24%, closing at HKD 168.3, a 22.51% plunge, with a market value evaporating HKD 65.6 billion, closing at HKD 2,257 billion, with a trading volume of HKD 24.46 billion and a turnover rate exceeding 10%. On March 26, the decline continued.

By midday on March 26, the stock traded at HKD 152.6, down another 9.33%, with an intraday low of HKD 150.2, and a market cap further reduced to HKD 204.637 billion. Notably, since its peak, Pop Mart’s stock has fallen over 54%, and its high-growth valuation logic has collapsed.

Industry insiders say that the market’s sharp decline in response to the earnings is mainly due to three expectation gaps. First, revenue of RMB 37.12 billion slightly below the consensus estimate of RMB 38 billion, making the Hong Kong market highly sensitive to performance gaps. Second, management explicitly defined 2026 as a “service station refueling and tire change” phase, with a minimum 20% growth target, a stark contrast to the nearly 185% growth in 2025, shattering high-growth expectations. Third, the cautious dividend policy, with no interim dividends, further weakened investor appetite. Pop Mart’s shift from “high-speed racing” to a slower pace led to valuation cuts, transitioning from a growth stock valuation to a consumer goods valuation framework.

Pop Mart Faces IP Dependency and Transformation Challenges

Behind the stock plunge lies market concern over the sustainability of Pop Mart’s long-term growth. The core issues are over-reliance on a single IP and insufficient new blockbusters. The dominance of LABUBU highlights structural risks—once its popularity wanes, Pop Mart’s performance could face a direct hit. “The popularity of LABUBU has cooled compared to earlier,” some netizens commented. Although Pop Mart plans to launch Series 4.0, collaborations with the World Cup, global tours, and live-action animations to continue exploring IP value, market worries about a lifecycle peak persist.

Compared to LABUBU, other second-tier IPs still cannot match its revenue. Classic IPs like SKULLPANDA, CRYBABY, MOLLY, and DIMOO each earned RMB 20–40 million in 2025, significantly lower than LABUBU, making it difficult to form a balanced support system.

According to incomplete statistics, over the past four months, new IPs like Hats Hatti and Supertutu have received tepid market responses, with e-commerce sales only in the thousands, failing to form a new growth curve. The biggest question hanging over Pop Mart is: “Where is the next LABUBU?”

Industry experts also point out that channel and user growth are hitting ceilings. On one hand, core retail locations in China are nearing saturation; on the other hand, after rapid overseas expansion, growth has slowed, with North American Q4 growth retreating from high levels. Additionally, the collectible nature of trendy toys limits single-purchase and repurchase potential, constraining membership growth and average spending.

High inventory levels also reflect growth issues: according to the 2025 annual report, as of December 31, 2025, Pop Mart’s inventory was valued at RMB 5.473 billion, a 259% increase from RMB 1.525 billion at the end of 2024 (about 260%), with inventory turnover days extending from 102 to 123 days. Although management acknowledged inventory expansion as a “phase of supply chain adjustment” during the March 25 earnings call and emphasized that current turnover days remain healthy, several brokerages (such as CITIC Securities and CICC) list inventory risk as a key factor affecting the stock price.

To break the growth bottleneck, Pop Mart is accelerating diversification into sectors like theme parks, film and television, jewelry, and desserts, and will launch IP-related small appliances in April.

However, investors remain cautious about these cross-industry moves, questioning whether they divert resources from core trendy toy business. Currently, Pop Mart’s PE (TTM) has fallen to around 27x, a significant compression from previous highs, shifting valuation from a “market dream” to a mature consumer goods valuation range.

For Pop Mart, 2026 marks a transition from rapid expansion to steady operation. Whether it can develop new super IPs, balance its IP portfolio, resolve inventory risks, and deliver at least 20% growth will determine if its stock can stabilize and rebound, and will also reshape the valuation logic and competitive landscape of the trendy toy industry.

Editor / Fengkou Finance Editor Tian Liang