Stock market crash! Pop Mart share price drops over 20%

Suddenly, Pop Mart opened in the afternoon and plummeted straight down. As of the time of writing, its stock price has fallen over 20%, with a market value evaporating by more than 58 billion Hong Kong dollars in one day.

In terms of news, the company released its full-year financial report at noon. Revenue for 2025 increased by 185% year-on-year to 37.12 billion RMB, slightly below the market expectation of 38 billion; net profit grew by 309% to 12.8 billion RMB, slightly above the expected 12.6 billion; adjusted net profit was 13.08 billion RMB, up 284.5% year-on-year.

Why did the stock price plunge despite such strong financials? Today, Pop Mart’s stock experienced its largest intraday drop since April 2025.

Market analysts pointed out that the company’s full-year revenue growth still largely depends on LABUBU sales, disappointing investors who had hoped for growth driven by other IPs.

DZT Research analyst Ke Yan said, “Dependence on LABUBU sales in the second half of the year even exceeds that of the first half.”

The financial report shows that the LABUBU family achieved revenue of 14.16 billion RMB, with all four major regions worldwide experiencing triple-digit growth, surpassing the market expectation of 12.5 billion. This character contributed about 40% of total revenue, up from 23% in 2024.

Although the heavily promoted Skullpanda performed well, with revenue reaching 3.5 billion RMB and exceeding expectations, other popular IPs like Crybaby and Molly underperformed. Notably, Molly, an early flagship IP of the company, generated only 2.9 billion RMB, far below the market expectation of 4.6 billion, highlighting the difficulty of sustaining growth for older IPs.

Some analysts pointed out, “Whether Pop Mart can continue its growth this year depends critically on expansion into overseas markets (especially Asia-Pacific and North America), diversification beyond LABUBU, and continuous new product launches.”

Previously, Morgan Stanley predicted that due to highly polarized market views, Pop Mart’s stock would remain volatile after the March 25 earnings release. Analysts Dustin Wei, Jenny Yu, and others stated in their report that over the past two and a half months, Pop Mart’s stock has experienced significant fluctuations, but there has been no substantial change in bullish or bearish earnings expectations. Optimists expect profits to reach 16.5 to 17 billion RMB in 2026, while pessimists anticipate weak growth and a decline starting in the second half of 2026. This divergence is because both sides may interpret the same information differently. Southbound funds remain the main source of bullish positions, while foreign hedge funds are the primary source of bearish positions.

(Source: China Fund News)