Profit doubles, but stock prices plummet: the boom and fragility of Pop Mart

(Source: Another Mirror)

■ 2025 Revenue Reaches RMB 37.12 Billion

■ Facing a “Divergence Between Performance and Stock Price” Situation

■ The capital market’s reaction reflects deep-seated concerns about the industry’s high-growth sustainability

Author | Shao Yang

Editor | Chen Qiu

Another Mirror ID: DMS-012

When a publicly listed company’s gross margin can match that of premium baijiu, and its annual net profit growth rate nearly approaches 300%, then in any industry, the capital market’s reaction should rightfully be cheers and pursuit. But on March 25, Bubble Mart—the absolute leader in China’s collectible toy (潮玩) track—encountered an utterly baffling “divergence between performance and stock price” situation. This set of results, arguably the industry’s ceiling, failed to win market applause and instead triggered a sharp contraction in market capitalization.

In 2025, Bubble Mart achieved full-year revenue of RMB 37.12 billion, a year-over-year surge of 184.7%; adjusted net profit reached RMB 13.08 billion, soaring 284.5% year over year; and gross margin climbed further to 72.1%. Multiple core metrics reached historical highs since the company went public. However, despite such standout performance—impressive enough to stun the industry—it still did not earn capital’s approval. On the day the financial report was released, the company’s stock price plunged directly by 22.51%, and fell again by more than 10% the next day.

From a “top student” whose performance doubled, to a “disappointed one” whose stock price collapsed overnight—behind the market voting with its feet is, in fact, a deep concern that its growth logic harbors hidden risks. Single-IP dependency continues to intensify; the second growth curve has not gained enough momentum; and the certainty of the company’s future development strategy remains in doubt. The capital market’s reaction has never been only a scrutiny of Bubble Mart itself—it is a deep-seated concern about the industry’s ability to sustain high growth.

“Pride” in performance meets “disappointment” in stock price

Judging purely from the financial data, Bubble Mart’s 2025 core financial indicators surged across the board. Compared with 2024, revenue rose from RMB 13.04 billion to RMB 37.12 billion, an increase of 184.7% year over year. Adjusted net profit jumped from around RMB 3.4 billion to RMB 13.08 billion, an increase of nearly 285%. Gross margin rose from 66.8% to 72.1%, adding 5.3 percentage points, with operating efficiency continuing to improve.

Overseas markets became the core engine of this growth. Full-year revenue reached RMB 16.268 billion, up 292.0% year over year, accounting for 43.8% of total revenue for the first time, coming close to half of the company’s business. By region, revenue in the Americas was RMB 6.81 billion, up 748.4% year over year; revenue in Europe and other regions was RMB 1.45 billion, up 506.3%.

At the same time, Bubble Mart’s global store network and robot store network continued to improve. The company added 109 stores net for the year to reach 630 stores, and added 165 robot stores net to reach 2,637 robot stores, further strengthening its offline coverage.

However, shortly after the financial report release, the performance guidance for 2026 provided by management during the earnings call—growth no less than 20%—created a huge gap compared with 2025’s explosive 184.7% growth rate. Management set 2026 as a “rest and consolidation year.” To the capital market, this suggests that the story of Bubble Mart’s rapid growth may be coming to an end, and that the narrative logic of high growth has undergone a fundamental shift.

Facing hidden concerns in future development, the capital market quickly delivered feedback that was sharply opposite to the performance. After the financial report was released, Bubble Mart’s stock price staged a “divergence between performance and stock price” drama. The stock price rapidly retreated from around the company’s intra-year peak of over HKD 270 per share, and the low point fell to around HKD 150 per share. Valuation levels were also compressed significantly: the P/E ratio dropped quickly from about 80 times to around 14 times.

To stabilize market confidence, the company urgently launched a share repurchase plan in an attempt to reverse the stock price slump, but the measure still could not stop the decline. Panic sentiment continued to spread, and it was very clear that institutions were taking advantage of good news to distribute shares.

Industry insiders believe that the earnings season is precisely a period when Hong Kong stocks typically have relatively active liquidity. Some institutions that were positioned early and had substantial profits chose to exit by realizing gains on earnings catalysts, creating a short-term stampede effect.

Single IP accounts for nearly 40% of revenue

It is worth noting that Bubble Mart’s performance growth is highly dependent on a single IP and hit products, which naturally raises concerns in the capital market about the sustainability of its earnings. Although the company’s full-year IP matrix achieved a historic breakthrough and demonstrated some scalability in competition, beneath the appearance of prosperity, risks such as an imbalanced IP structure and gaps in the IP “ladder” have become increasingly prominent—turning into the core stumbling block constraining its long-term development.

From the overall performance of its IPs, Bubble Mart’s full-year IP matrix achieved remarkable results, setting the best performance in history. Overall, 17 IPs generated revenue of more than RMB 100 million each, including 6 IPs with revenue exceeding RMB 2.0 billion. This further highlights its scalable competitive strength. Behind this achievement is the strong lead of a phenomenon-level super IP, La Bu Bu. The THE MONSTERS series it belongs to delivered RMB 14.16 billion in full-year revenue, up 365.7% year over year, accounting for as much as 38.1% of the company’s total revenue. This means that a single IP directly supports nearly 40% of the company’s revenue.

Meanwhile, in Bubble Mart’s core IP tier, both the top-tier and up-and-coming IPs also showed impressive growth momentum, jointly forming the “backbone force” of the IP matrix. Among them, SKULLPANDA generated RMB 3.54 billion; DIMOO generated RMB 2.78 billion; and the up-and-coming IP Xing Xing Ren (星星人) even achieved a stunning breakthrough, with revenue reaching RMB 2.06 billion, becoming the fastest-growing new-generation force within the IP matrix. In addition, CRYBABY generated RMB 2.93 billion, and HIRONO Xiao Ye (小野) generated RMB 1.74 billion, further enriching the growth vitality of the core IPs.

However, the performance of the core IP tier is not uniformly positive—instead, it shows a clear pattern of divergence, with the gap between strong and weak widening over time. As the company’s foundational IP and the once “first-generation” top star MOLLY, its growth in 2025 has been notably sluggish. Full-year revenue was RMB 2.9 billion, up only 38.4% year over year—far below the company’s overall revenue growth rate of 184.7%, creating a stark contrast with the momentum of leading IPs.

Even more alarming is that the “top-heavy effect” of the IP matrix is overly extreme and already beyond the industry’s safety range. The THE MONSTERS series featuring La Bu Bu accounts for as high as 38.1% of revenue, meaning the company’s earnings are highly dependent on this single IP. If La Bu Bu’s market hype cools down, if users experience aesthetic fatigue, or if there are mistakes in IP operations, the company’s performance would face a huge risk of a cliff-like decline.

At the same time, the gap in the IP tiers is also very prominent, further weakening the matrix’s ability to withstand risks. Currently, the company has only one “hundreds of millions-level” IP—La Bu Bu. In the RMB 2–4 billion revenue range, there are only four IPs. The transition IPs worth RMB 5–10 billion are missing, so the company cannot form an effective relay for growth. This uneven IP structure makes it difficult for the company to resist shocks caused by fluctuations in a single IP, and also plants risks for stable long-term growth.

Institutional views are clearly split

In the face of impressive performance alongside a plunge in the stock price, Bubble Mart is advancing a diversification strategy to try to resolve the dilemmas of growth and structure.

In 2026, the company has also clearly outlined series-based strategic directions, including deepening the IP-content layout, accelerating global expansion, expanding offline scenarios, and exploring deep integration between AI and collectible toys. For example, at the 2025 earnings release meeting, Bubble Mart’s Chief Operating Officer Si De (司德) introduced that the company’s home appliance products will officially meet everyone next month.

Earlier, in December 2025, Bubble Mart officially announced that Wu Yue (吴越), President of LVMH Greater China Group, had been appointed as a non-executive director of the company, effective from that date. Wu Yue will receive a generous annual package of HKD 3.0 million, including a fixed cash remuneration of HKD 1.2 million and a share-based remuneration of HKD 1.8 million. This has naturally made the market curious: what kind of surprises will Bubble Mart bring to consumers in its later stages?

Regarding Bubble Mart’s transformation initiatives, institutional views show a clear divergence. Cautious institutions are concerned about the company’s growth slowdown and the concentration risk of its IPs. For instance, Jiyin International Securities emphasized that “management’s outlook for 2026 is somewhat cautious, and the guidance implies growth is below expectations.” Meanwhile, optimistic institutions—such as China Yuan Securities, GF Securities, Guohai Securities, and CICC—have all issued “buy” ratings, believing that the company’s IP operations and global capabilities have already been validated by the market, so they are bullish on Bubble Mart’s medium-to-long-term development.

Interestingly, Duan Yongping—who previously publicly said “he couldn’t understand why people would need this”—has recently changed his wording. On March 30, Duan Yongping posted on Xueqiu stating: “I spent these two days looking at Bubble Mart again and decided to retract the statement that I don’t invest in Bubble Mart that Duan Fang Sanwen (方三文) said.”

From a high-growth collectible-toy track to a mature consumer category leader, perhaps Bubble Mart is undergoing a key transformation in its growth model. In the short term, whether La Bu Bu’s hype can sustain, whether overseas growth can stabilize, and whether new IPs and new businesses can quickly take over will determine the stock price trend. In the long term, only by balancing IP diversification and expanding new businesses can Bubble Mart truly transition from a collectible toy manufacturer into a leading global IP ecosystem group, and address the “troubles of growth.”

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