Proactively slowing down, massive stock price fluctuations—has the narrative of Pop Mart come to an end?

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On March 25, Pop Mart delivered a track record worthy of envy: revenue of 37.12 billion yuan, up 184.7% year over year; net profit of 13.012 billion yuan, nearly tripling; and overseas revenue contributed more than 40%. However, when management said at the earnings call, “Our 2026 growth outlook will be no less than 20%,” the market instantly changed its tune. Compared with the nearly twofold growth in 2025, the 20% guidance—interpreted as a “going-off-the-rails” signal.

Panic spread quickly. The next day after the earnings call, the stock price plunged.

The market’s bull-bear tug-of-war is, at its core, a collision between two time dimensions. But the real key to this disagreement is not who is right or wrong; it’s that both sides are looking at different facets of the same company.

01 The bears aren’t aiminglessly wrong, but Wang Ning shows more foresight

Judging from the market’s reaction, the bears’ logic is actually defensible.

In the past few years, Pop Mart’s share price—calculated from its lows—has risen by more than 35 times, and its valuation was pushed to extremes at one point. The market’s pricing of the company has always been built on expectations of “high growth.”

Revenue surged from 4.5 billion yuan to 37.1 billion yuan, with a compound annual growth rate of 70%. At the same time, the gross margin rose by 10.7%. This kind of performance record, for any consumer goods company with annual revenue exceeding 1 billion yuan, is nothing short of a growth myth—naturally, it has stirred the most intense market sentiment.

But when management provided a 20% growth guidance at the earnings call, that expectation was instantly broken—cutting down abruptly from nearly 200% growth to 20%. Based on the math, the incremental outlook for 2026 might be only about 7.5 billion yuan, less than one-third of 2025. The halo of high growth suddenly faded.

For a market accustomed to “growth rate is righteousness,” this is undoubtedly a dangerous signal.

At the same time, the market believes that last year’s explosive growth was largely driven by the sudden emergence of super IPs. For investors who are good at financial calculations, a question is inevitable: Is this surge sustainable? How long can Labubu’s popularity last? Does actively slowing down mean the operational value of the IP has been overestimated?

These questions are not without basis. The toy-and-collectibles industry still has certain characteristics of “non-standard valuation.” Moreover, the lifecycle of an IP has long been hard to predict. Add to that the stock already trading at a high level and profit-taking positions being rich, and the market becomes “a frightened bird,” with capital voting with its feet—this is, in itself, a completely normal response.

From this perspective, the bears’ judgment is a rational extrapolation based on visible facts right now: growth rate shifting gears, reliance on hit products, and an elevated valuation.

What the bears see is the growth rate being revised downward, but in our view, the market’s panic is essentially a misreading of how the earnings call was communicated.

From the bulls’ logic, we can find two more objective direct pieces of evidence:

First, on March 26 and 27, Pop Mart repurchased about 5.92 million shares in two consecutive days. After the earnings call, Wang Ning used real money for buybacks to firmly signal a bullish view on Pop Mart’s long-term value, offering the most direct response: the market’s panic is essentially a misjudgment.

Second, based on Pop Mart’s financial reports, there is no obvious slowdown on the operational side. Single-store UE and operating costs are performing well. This indicates that the earnings call’s growth guidance revision downward was an active slowdown, intended for longer-term development.

In fact, if you look closely at the financial statements, it’s not hard to see that Pop Mart’s overall operating efficiency has not declined meaningfully. Taking the domestic market as an example, the annual single-store sales figure at retail stores has risen by more than a full 100%.

Moreover, Pop Mart has not encountered the issue of bloated costs brought about by scale expansion. In 2025, the sales expense ratio and the management expense ratio were recorded at 21.8% and 4.8% respectively, both down 499 bps and 250 bps compared with 2024. Expense growth can be considered relatively reasonable and healthy under scale expansion.

Therefore, Pop Mart’s fast growth in 2025 is essentially the release of what the company accumulated over the past decade—an集中体现 of operational capability. Globalization accelerating, LABUBU becoming a world-class IP, and growth in per-store productivity—these achievements are all built on the company’s early hit-product incubation capability and its advantages in offline channels.

And the moat advantages created by such operational accumulation must also be maintained over the long term. In economics, there is a concept called the “capability trap.”

This theory was proposed by Harvard Business School professor Clayton Christensen in his classic work The Innovator’s Dilemma: the successful paths a firm has followed in the past, the capabilities it has accumulated, and the inertia it has formed often become its biggest obstacles when facing challenges in a new stage.

This pattern has played out repeatedly in business history.

Starbucks, still growing rapidly in 2008, experienced a decline in same-store sales. Remember, in the past decade, Starbucks’ store count surged from 1,000 to 7,000, and the pace of revenue scale expansion was astonishing. But with long-term high growth, skill shortages emerged on the people side, product standards inevitably lowered, and it backfired on word of mouth.

After Schultz returned for a third time to rescue Starbucks, it actively slowed down and took a series of measures: reducing stores, laying off and re-hiring employees, retraining baristas, introducing semi-automatic coffee machines, improving the supply chain, and developing information technology systems. Although Wall Street analysts cut their ratings one after another after the growth guidance was lowered—believing Starbucks had “lost growth momentum”—looking back from a post hoc perspective, actively slowing down strengthened the brand, laid the groundwork for the concept of the third place, and established the moat for Starbucks’ next decade. In reality, it proved that Schultz was right.

Pop Mart in 2026 is going through a similar node. While Pop Mart has not yet shown an operational dilemma brought about by scale expansion, the phrase “patching the net in idle time and fixing the house on clear days” applies at any time.

As Wang Ning said at the earnings call, Pop Mart is like a novice race car driver being quickly brought to the F1 track—but during a process with extremely high speeds, both the driver and the car face enormous pressure.

The driver knows this speed cannot be sustained purely by short-term momentum from traffic dividends. If you keep accelerating without upgrading the organization, optimizing processes, and strengthening the middle/back office, sooner or later you will fall into a “capability trap.” What Wang Ning pursues is healthy development, not worthless development.

In today’s capital market where everyone is keen on chasing “high-growth narratives,” Pop Mart’s decision to actively lower expectations is a correct choice under a long-termism narrative, not a simple slowdown in growth. For value investors, the market’s frightened-bird reaction in itself has no real logic.

02 Actively adjusting the pace is a required lesson for long-lasting companies

“During turbulent times, the biggest danger is not the turbulence itself, but still doing things with the logic of the past” — Peter Drucker.

Actually, actively adjusting the growth rate and maintaining the company’s core value—this kind of approach is common among Western companies:

In 2016, Vox reported on a change right after Tim Cook took over Apple. Cook first slowed the pace of innovation across Apple’s product lines, and then explained to Wall Street that Apple might lower its growth rate. In response to Cook’s changes, public opinion at the time was overwhelmingly bearish. Forbes columnist Peter Coyen even wrote a piece specifically titled “Two Great Grubs Are Eating Apple’s Core,” mocking the idea that Apple’s innovation cadence was slowing in the Jobs era, and the capital market also voted with its feet. For a long time after Cook took office, Apple’s stock performance was rather flat.

But looking back ten years later, it was precisely this active slowdown that built Tim Cook’s supply chain empire. Apple’s market value rose from 300 billion dollars to 3 trillion dollars. Those who once mocked Cook as “only good at supply chain” later realized the deeper meaning.

In 2005, when Robert Iger became Disney’s CEO, the company was in the “number trap” of IP. To chase market hotspots, Disney rolled out a large number of sequels and spin-offs in just a few years—The Lion King 2, The Little Mermaid 2, The Hunchback of Notre Dame 2… each one could bring in short-term revenue, but each also consumed the IP’s brand value. Users began to experience aesthetic fatigue, and the media mocked Disney for “squeezing out its own legacy.”

Iger did something that looked “counterintuitive” at the time: he actively narrowed the IP development cadence, reducing the production of low-quality content. He cut the strategic planning department and focused resources on a small number of truly promising projects. At the same time, he launched a series of strategic acquisitions—Pixar, Marvel, Lucasfilm, and 21st Century Fox among others—injecting entirely new “IP blood” into Disney.

At the time, not everyone understood this decision. The capital market was used to Disney releasing a dozen animated films every year; the sudden “slowdown” sparked many questions. But looking back ten years later, it was precisely this active “contraction” that helped Disney avoid the trap of overextending IP. Later, the Frozen, Zootopia, and Avengers franchises became global cultural phenomena one by one.

The mark of corporate maturity may be learning to actively adjust the pace. And as of now, Pop Mart—after its surge—has also become more mature.

In 2025, LABUBU became a world-class super IP, contributing revenue of 14.1 billion yuan, up 366% year over year. There’s no doubt that this is the most dazzling “hit” since Pop Mart’s founding. But Pop Mart is clearly aware that a single-IP boom cannot support an ecosystem. In fact, over the past few years, Pop Mart has been working to solve this problem.

Wang Ning has also made a similar statement at the earnings call: “Pop Mart is not only about LABUBU. Even if we didn’t have LABUBU last year, we still achieved super fast growth.” Behind that is the company’s strategic shift—from relying on a single blockbuster to building a collaborative ecosystem across multiple IPs, multiple categories, and multiple channels.

The 2025 data already shows the effectiveness of this shift. The company has 6 IPs with revenue exceeding 2 billion yuan and 17 IPs with revenue exceeding 100 million yuan. SKULLPANDA contributed 3.54 billion yuan; CRYBABY, MOLLY, DIMOO, and Star People each exceeded 2 billion yuan. Among these IPs, besides the older IP Molly, the growth rates of the rest of the IPs are all above 100%. The newly launched IP Star People in 2024 even achieved more than 1,600% year-over-year growth. This means Pop Mart is moving from “single-point booms” to “matrix-driven” growth.

In other words, Pop Mart has accumulated enough capability to replicate IP hit products. It isn’t that there is no potential for booms; rather, if at this moment it blindly pursues scale expansion and ends up with uncontrollable product issues, it will inevitably drain the lifespan of the IP. The Millennium-era Disney and Starbucks’ disorderly expansion are the best counterexamples. Wang Ning sees this very clearly.

From Apple to Disney, from Jobs to Cook, from Iger to Wang Ning—no matter the company, the underlying logic of business has never changed: great products can build a company, but only an efficient organization can help it survive across cycles.

Building capabilities has never depended on sprinting; it relies on long-termism where “slow is fast.”

03 Don’t worry—Pop Mart understands the emotions of its era best

If you look at it from the long cycle of the cultural industry, what Pop Mart investors need to understand is to take Pop Mart out of the “growth narrative” and put it into the “emotion narrative.”

The cultural industry is one of the few “evergreen-cycle” industries in human commercial history. As British Leeds University professor David Hesmondhalgh discusses in The Cultural Industries, the biggest difference between the cultural industry and other industries is that it does not produce functional products consumed up once. Instead, it produces “texts and symbols that can be consumed repeatedly and continue to generate emotional resonance,” making it one of the best businesses for human society.

The value of cultural products lies in the meanings, emotions, and identity recognition attached to them—which gives the cultural industry natural resilience to “cross cycles.”

Whether it’s Disney’s Mickey Mouse, Marvel’s superheroes, Hello Kitty, or Gundam, the lifecycle of these IPs can easily span half a century or even longer. They can cross cycles precisely because they build ongoing emotional connections with users.

This emotional connection cannot be achieved through sprinting; it can only be built through time.

Japanese sociologist and economic scholar Kei Miura also used similar wording in the shaping of the “fifth consumption era”: after the sharing and simplicity of the fourth consumption era, people begin to search for “the self” again, seeking consumption that brings emotional resonance, spiritual fulfillment, and self-pleasure experiences. This kind of consumption is no longer for showing off, and no longer for belonging; it’s for “making yourself happy.” That is the symbol of this era.

Pop Mart is exactly at the intersection of this era. And from Molly to Labubu’s breakout success, the market has also been shown that Pop Mart is currently the consumer company that understands this era best.

At the earnings call, Wang Ning said: “The difference between us and many consumer goods companies is that even if the whole family comes into our stores—no matter what age—everyone gets a great experience.” This statement proves to the market that Pop Mart has a deep understanding of “self-pleasure consumption” and “introspection consumption.” Consumers of all ages can find emotional resonance at Pop Mart.

Pop Mart in 2026 is still practicing this: Phase 1.5 of the amusement park is about to be completed; official announcements for the THE MONSTERS movie series; global exhibitions rolling out across multiple cities; and dressed-up LABUBU appearing in Macy’s Thanksgiving Day parade and on the covers of fashion magazines. These efforts are all aimed at building deeper emotional connections between IP and users.

In summary, what the market bears see is a slowdown in speed. But what Wang Ning sees is the difference of the era. The growth logic of IP and consumer products has already changed when the cycle turned, so we must respect the market, understand the essence of self-pleasure, focus more on higher-quality experiences and emotional connection with consumers—only then can the story of IP last longer.

Rest assured, Pop Mart may not be good at catering to market expectations, but it truly understands the emotions of this era the most.

This article is written based on publicly available information, solely for information exchange purposes, and does not constitute any investment advice