Pop Mart, what kind of game are they really playing?

Source: CITIC Publishing House

The first stock in the collectible toy sector, Pop Mart, is mired in the eye of a storm.

On March 30, after Pop Mart’s share price saw a consecutive two-day plunge of more than 30%, the stock finally rallied intraday and turned red again. At the same time, an investment titan who rarely “changed his tune” made a rare reversal of his earlier judgment—Zeng Yongping posted on Xueqiu: “I’ve decided to take back my statement to Brother Zhang that I wouldn’t invest in Pop Mart.”

This value-investing benchmark figure, who had once bluntly said, “I can’t make sense of Pop Mart,” nonetheless, when Pop Mart’s share price underwent a major adjustment, chose to re-examine the company.

Just a few days earlier, Pop Mart had turned in a “strongest annual report ever” that all consumer brands could only envy: full-year revenue of 37.12 billion yuan, up 184.7%; and adjusted net profit of 13.08 billion yuan, up 284.5%. That LABUBU, with rabbit ears and buck teeth, singlehandedly contributed 14.16 billion yuan, up 365.7%, for the first time pushing the collectible toy IP into the “billion-yuan club.”

However, the capital market’s reaction left people truly dumbfounded.

On the day the financial report was released, the share price fell 22.51%, and the next day it dropped more than 10% again. Over the two days combined, the total decline exceeded 30%, and the market cap evaporated by more than 250 billion HKD compared with its peak.

The market’s “voting” logic is simple and brutal: Pop Mart is far too dependent on LABUBU. And in 2026, it only promises “no less than 20%” growth?

Faced with questions about “growth stalling,” Pop Mart’s founder Wang Ning threw out a classic analogy during the earnings call: “In 2025, we were like a new race car driver who suddenly got pulled onto the F1 track. In 2026, we hope to get into the pit lane—to top up the fuel, change the tires.”

On one side, blistering performance was met with a market value wipeout driven by “voting with your feet.” On the other, a top investor’s attitude reversed. So what exactly happened to Pop Mart behind the scenes?

Blistering performance, yet the stock is cut in half—what is capital afraid of?

First, let’s revisit this bizarre “divergence.”

In 2025, Pop Mart not only broke through 30 billion yuan in revenue, but its gross margin rose from 66.8% to 72.1%, and its net profit margin increased from 25.4% to 35.1%—a profit margin that can rival that of premium liquor brands.

But market panic was also clearly visible, mainly in two areas.

First, “LABUBU dependency” is intensifying.

In 2024, the THE MONSTERS family, where LABUBU resides, accounted for 23.3% of revenue. By 2025, that figure surged to 38.1%. Citibank’s research shows that 47% of respondents first came into contact with Pop Mart because of LABUBU.

This means that a large number of new users are “coming for LABUBU.” When capital sees a super hit taking up nearly 40% of revenue, while new IPs like Supertutu respond blandly and the prices in the secondhand market are nearly cut in half, fear naturally arises.

Second, the “hard braking” of growth guidance.

During the earnings call, Wang Ning gave guidance for 2026: strive to achieve a growth rate of “no less than 20%.” Compared with the past when growth was often in the three-digit range, this seems like “slowing down.”

One industry commentator said bluntly: performance is the past, stock prices are the future. Super performance brought by a single super hit is not enough to support the market’s imagination for 2026, and the likelihood of repeatedly hitting super hits is also unknown.

It is eerily similar to the doubts Pop Mart faced back when it got Molly listed.

Just as the market was mired in pessimism, Zeng Yongping’s attitude reversal became a signal that is currently worth pondering.

On March 30, Zeng Yongping posted on Xueqiu: “In economics, ‘speed’ is actually ‘acceleration’ in physics. What you buy in investing is the future total amount—total length equals ‘speed’ multiplied by ‘time’ in physics. Of course, some ‘acceleration’ allows you to go farther within a unit of time. I’ve spent the last two days looking again at Pop Mart and decided to take back my statement to Brother Zhang that I wouldn’t invest in Pop Mart.”

As early as last December, in an interview with Wang Shi, Zeng Yongping had said: “I highly recognize the ability to turn emotional-value products into something like this—not just random success, and it can’t be attributed to luck.” Although at the time he said, “I can’t make sense of Pop Mart, so I won’t invest in or buy its stock,” he already looked at the company differently.

This year in January, when facing questions from netizens, Zeng Yongping remained cautious: “I’ve roughly looked at Pop Mart and think they’re indeed quite impressive. However, I still don’t understand why people would need this kind of thing—what if in two years everyone doesn’t want it anymore?” But he also added: “If you can believe that people will keep needing it and their business will keep growing, then that is obviously a pretty decent investment for you.”

From “can’t make sense of it” to “taking back the statement,” Zeng Yongping’s shift is, to a certain extent, the continuous evolution of his investment mindset. What prompted him to re-examine Pop Mart is precisely the stance the company showed when its share price plunged: proactively slowing down to pursue steady growth.

Pop Mart’s ambition goes beyond just a ‘blind box factory’

If you only look at the financials, you might think Pop Mart is a “hit-making machine.” But in reality, its ambitions go far beyond that.

In the book The Unique: Wang Ning’s Journey from a Grocery Store to the IP World, written by the well-known business journalist Li Xiang, Wang Ning repeatedly emphasizes a point: Pop Mart is an IP operation company, not a blind box company.

The book reveals an overlooked detail: back in 2015–2016, when Pop Mart was still just a brick-and-mortar grocery store, Wang Ning discovered that Japanese toy Sonny Angel accounted for a very high share of sales, and its repeat purchase rate was noticeably higher than other categories.

It was this discovery that made him decide to cut down—eliminating all other categories and going all in on collectible toy IP.

The core of The Unique is precisely to reveal the balance Pop Mart has found between “the unique” and “the mainstream.” The book summarizes Wang Ning’s take on Pop Mart’s business model:

Industrializing art production (turning previously niche artists’ toys into standardized consumer goods), building ready-made distribution channels (bringing collectible toys from niche circles into the mainstream view), and converting the consumer market (transforming collectible toys from a male-dominated “hobby” into a female-dominated “consumer good”).

These “basic skills,” mentioned almost in passing in the book, became the soil that enables Pop Mart to incubate LABUBU.

In CCTV’s Dialogue, Wang Ning further elaborated on the company’s barriers: “hard barriers” are the accumulated fine-grained operations over 16 years, while “soft barriers” are the early identification of top industry artists.

He still remembers the line Wang Zhiming (the artist behind Molly) said to him when they met in 2016: “I hope Molly sells 1 million units a year.” At the time, he thought it was out of this world; now, it already exceeds 10 million units a year.

So, when the capital market anxiously asks, “Where is the next LABUBU?”, Wang Ning’s calmness actually comes from expectations—at CCTV’s Dialogue, he said: “Any small category can give birth to a great company. It’s not easy to do one thing well.”

When Zeng Yongping re-evaluated the company, what he saw was also precisely this kind of accumulation built “little by little.”

As Zeng Yongping put it, what investment buys is “the total amount of the future”—and this total amount is not built by stacking a single hit, but by long-term operational accumulation.

One key concept emphasized again and again in The Unique is: the vitality of an IP lies in whether it can be integrated into consumers’ everyday lives. Today, Pop Mart has already kicked off a series of strategic layouts, attempting to further break the stereotype of a “blind box factory.”

First, move into small home appliances to occupy physical space.

In April, Pop Mart will launch derivative small home appliances with IP at the core, from electric kettles and coffee machines to hair dryers. This is not a traditional “cross-industry” move—its core is expanding the boundaries of IP expression. When LABUBU appears on your dining table or in your bathroom, it is no longer just a toy—it becomes a “life companion.”

Second, lay out content to build a spiritual universe.

In CCTV’s Dialogue, Wang Ning said: “Movies can deepen the thickness of an IP—their settings and stories can also be applied to theme parks and product development, building a comprehensive IP commercial framework.” In the second half of 2026, LABUBU will launch the 4.0 series; picture books and live-action animated films in cooperation with Sony Pictures are also in the works. If selling figures used to be “selling looks,” then making movies is “selling the soul.”

Third, iterate the theme park to strengthen immersive experiences.

Pop Mart COO Si De disclosed during the earnings call that City Parks Phase 1.5 are expected to debut in summer 2026, and Phase 2 is expected to start construction in 2027. It will add themed scenes featuring SKULLPANDA and Star Star people. This combination of moves is remarkably similar to Disney’s path from back then.

But all of this takes time.

In The Unique, Pop Mart’s founder Wang Ning emphasized more than once that it should—“respect time, respect operations.” IP cultivation can’t be rushed. It needs time to settle into stories, and it needs to use real-life scenarios to reinforce memory.

He believes that “we belong to long-termism. We think that what should be accomplished over a decade should not be rushed—don’t expect it to be done in just one or two years.” In his view, slow is fast, and less is more. Focus on one thing and do it gradually—only by doing it to the best degree can you achieve competitiveness.

This also explains why, in his best years for performance, he chose the most conservative growth guidance.

Over the past few years, Pop Mart really has looked like a race car sprinting wildly on the F1 track. In 2025, overseas business revenue surged year over year by 291.9%, and the Americas market grew by 748.4% (about 7.5x).

Such high growth rates consume enormous resources from the organization.

“Hope that 2026 will be the year of getting into the pit stop.” Behind this line from Wang Ning is the idea that this company, having experienced the pains of rapid expansion, chooses to proactively slow down—to make organizational adjustments and refine the fine-tuning of global operations.

In The Unique, multiple investors describe Wang Ning as “steady in temperament, not very talkative, able to keep emotions in check, and possessing many excellent qualities typical of entrepreneurs in the consumer sector.” And unlike many internet entrepreneurs, Wang Ning rarely talks about “disruption”—he emphasizes “operations” instead.

As the book says, Pop Mart is the result of “respecting time and respecting operations.”

Proactively slowing down to build a thicker ‘moat’

In the final part of The Unique, Wang Ning attributes Pop Mart’s success to two broader backdrops: “the strength of Made in China” and “the size of the Chinese market.”

In an interview, he said: “China has entered the Dividend 2.0 phase. Reform and opening up have given us two weapons: one is Made in China, and the other is the Chinese market. Made in China has already been trained by the global market and is mature. It can manufacture products of world-class quality.”

This is one point that many people discussing Pop Mart tend to ignore.

LABUBU becoming a world-class IP is not only because of design, but because China’s supply chain turns wild ideas from artists into tangible, high-performance, high-value-for-money products.

In a CCTV interview, Wang Ning proposed the concept of “From the world To the world”—coming from the world, then going toward the world. He believes there’s no need to rely on traditional elements to go global. “World-class design language combined with China-level manufacturing capability” is what enables broad acceptance.

Now, when Pop Mart sells LABUBU in front of the Egyptian pyramids and under the Eiffel Tower in Paris, what it exports isn’t just collectible toys—it’s also a “emotional consumption” model defined by Chinese companies.

Finally, we return to that question that terrifies the capital market: if there were no LABUBU, what would Pop Mart do?

In fact, the most valuable part of Pop Mart’s story is not how it manufactures hits, but how after producing hits, it continues to hold a sense of reverence for “operations.”

At the latest earnings call, Wang Ning also answered this question with data.

He said that Pop Mart is an IP commercialization platform. Even if you remove all of LABUBU’s performance, the company can still grow rapidly. In 2025, besides LABUBU, 6 major IPs—including SKULLPANDA, CRYBABY, MOLLY, DIMOO, and Star Star people—saw revenue each surpass 2 billion yuan, and 17 IPs had annual revenue exceeding 100 million yuan.

At this stage, one thing can be confirmed: choosing to steer proactively into the “pit stop” is not about quitting the race, but about checking the engine, changing the tires, and preparing for the next longer stretch of track.

The Unique: Wang Ning’s Journey from a Grocery Store to the IP World

Li Xiang / Author

CITIC Publishing House