POP MART: no longer a playground for hedge funds, but interesting for long money?
with proprietary data
Seasoned Baiguan subscribers will remember that we have been covering the story of POP MART from the very early on.
As early as August 2024, right before POP MART’s shares really took off, we first commented on its stellar growth based on our own data.
In June 2025, Amber Zhang took a deep dive into the consumer psychology around this company, including her own personal conversion as a consumer.
The stock price of POP MART recently had a major setback. After its annual earnings announcement, the stock has tanked by more than 30% over five sessions, wiping out around HK$100 billion in market value.
Three main reasons explained this market’s sudden lack of confidence. First, the market is concerned that the overseas business performed worse than expected. Second, there are concerns that POP MART relies too much on a single IP, namely Labubu (The Monsters). Third, Wang Ning, the founder and CEO, gave an ultra-conservative guidance of “no less than 20% growth” during the earnings release.
In the first half of 2025, overseas revenue skyrocketed 440% year over year. However, in the second half of the year, the overseas revenue growth rate “slowed down” to 243% year over year.
240%+ growth is certainly slower than 440%+ growth, but we can’t help but feel that calling this a “deceleration” runs the risk of nitpicking.
POP MART’s phenomenally explosive global growth story was a huge surprise for everyone in 2025. The market was naive to build a linear extrapolation of future growth rates from this level in the first place, and it is only natural to expect that, after such triple-digit hyper-growth, the company is bound to see some deceleration.
On the other hand, it’s important to note that China's sales have been remarkably robust and resilient. In the first half of 2025, Greater China revenue grew 135% year over year. In the second half, the growth rate remained virtually unchanged at 134% year-over-year. This demonstrates that China remains the main growth engine for POP MART, with strong and stable growth momentum that has not lost steam.
Our own proprietary data, tracking in-store transactions in China, also shows the growth rate in Q1 will be substantially higher than “no less than 20%”. (You can find the exact data behind the paywall.)
As for over-reliance on IP. It’s true that Labubu now accounts for 38.1% of total revenue, in 2025, up from 23.3% in 2024. However, the growth picture is more nuanced than it first appears. Labubu grew by 365.7% year-over-year, which is indeed the fastest growth rate among POP MART’s established IPs. Yet the company’s portfolio is diversifying rapidly. DIMOO grew at 205.3%, SKULLPANDA at 170.6%, and CRYBABY at 151.4%. More significantly, Twinkle Twinkle, positioned as the next major IP, grew at an extraordinary 1,601.6% year-over-year, from just 120.8 million yuan in 2024 to 2.06 billion yuan in 2025, now capturing 5.5% of total revenue.
If Labubu had not existed, you would still consider this company a high-growth one, if only with these IPs. An investor simply should not blame something for growing even faster than its fast peers.
We believe the real trigger for the big share price slump is the highly conservative “guidance” that Wang gave to the market.
Overall, POP MART grew 185% in 2025, reaching 37 billion yuan in total revenue. But now the management slapped a mere “20%” on the market’s face. A violent re-rating is only natural afterward.
According to Wang Ning’s explanation. It was a voluntary decision to decelerate and regroup internally after a “F-1-style” helluva ride. But the market is usually skeptical of such a statement. Is it a genuine choice to decelerate and regroup, or a just cover-up for a company that’s losing steam?
Regardless of the reason, it is certain that the company won’t pursue rapid growth in the near future. In a hot stock that has been dominated by long-short hedge funds, this is enough to scare many investors away.
At the same time, we start to see signs of super-long money coming into the scene. Duan Yongping, often dubbed as “Buffet of China” and a mentor of PDD’s Colin Huang, very publicly retracted his previous comment that he would not invest in POP MART, and praised POP MART as “right business, right people, and right price” and a “real precursor of the internalization of Chinese brands”.
It seems a rotation of investor types is underway right now.
Is POP MART valued correctly?
POP MART inspires many analogies. Back when it was a hot name, analysts often imagined POP MART would become the future Disney of China. While a closer analogy might be Japan’s Sanrio (8136.JP), creator of the Hello Kitty franchise.
We don’t believe POP MART is Disney or Sanrio, yet.
The crucial difference is that POP MART is still too young. By simple definition, when someone is young, they can’t prove that they are evergreen.
If you're looking for an analogy to understand POP MART, we think it's more like a video game company right now.
The situation is similar to Tencent Games back in 2017, when one super franchise, Honor of Kings, accounted for ~50% of its mobile game revenue. At the time, investors were also concerned about the sustainability of the situation.
Just like Tencent Games in 2017, POP MART has not yet demonstrated the longevity of the super franchise. On the other hand, the success and runway of each franchise are far from predictable. Even their own management cannot predict them. They also don’t have a long enough track record to prove that they can keep producing hit after hit.
Adding to the problem is that, so far, POP MART’s IPs lack narrative power. This is a key difference between POP Mart and Disney at this moment. Disney’s IPs have narratives and stories, while Labubus are storyless, making it even harder for investors to look ahead.
All of these mean that the current valuation of POP MART, at a low double-digit TTM P/E and even single-digit forward PE, is exactly where it should be.
Investors love linear extrapolation. Investors hate it when there is too much uncertainty, and they can’t perform linear extrapolation due to low visibility. POP MART is thus rapidly, violently gearing down from a high-growth, high-multiple story to a stable-growth, low-multiple value play that many institutional investors would not want to participate in.
Looking ahead over the next few years, we should focus only on whether the share price can be driven by actual EPS growth, and assume that re-rating will occur only after years, and even decades, of solid, healthy growth.
Even if you are a POP MART bull, this is the reality you have to be clear about.
So, should we expect POP MART to sustain long-term growth?
We think we should.
In fact, we believe if there is any company that is able to deliver a long-lasting enterprise value capitalizing on China’s (and the world’s) growing demand for high-emotional-value consumption, it’s got to be POP MART.
There are at least three reasons to support our conviction: people, platform, and attitude towards investors.
First, let’s look at it from a first-principle perspective: for a business as ephemeral and as unpredictable as that of POP MART, what’s the single most important factor to consider? Technology? Marketing capability? Cash?
None of that.
The single most important factor is people and culture.
This is not the first time that POP MART has faced a crisis. In fact, the “crisis” of today is far less significant than previous ones.
When POP MART IPOed in 2020, investors questioned whether the company relied too much on its main IP, Molly. There was the same debate over whether the business model worked and if the company could keep delivering long-standing IPs. Following that, the share price fell by more than 80% from its IPO price by 2023, before rising 30-fold over the next two years.
And even further back, POP MART had been building this unique and lesser-known business for more than a decade before its IPO. There weren’t many overseas models to copy. Many people do not understand the model. It’s not a red-hot sector with an existing roadmap to show them the way. They have always been lonely.
It’s also when Wang Ning developed the core tenet in his management culture: “Respect time, respect operations” (尊重时间, 尊重经营), which sounds very much like benfen of Duan Yongping and Pinduoduo.
Over the last 16 years, the company has proven it can survive cycles, find its own audience, and keep innovating on its own timeline and pace. They seem able to consistently make the right choices and are unafraid of being alone or singled out, which is a remarkable characteristic in Chinese business culture and society.
This is why we believe this current voluntary deceleration of growth in exchange for operational improvement is real, and not a cover-up for slow growth. It’s yet another sign that this company does not care about short-term performance but is squarely focused on the long term.
It’s also important to understand that “no less than 20%” is not “guidance” in traditional Wall Street speak. The “20%” number is the least Wang Ning thinks they can deliver with 100% certainty. Anything above is not planned for and will not be the focus of this year. It’s the equivalent of saying there is no quantifiable business target for this year at all.
It’s healthy that they are sober about where they are, despite the immense market expectations. This is the right way to do it, especially in a business that nurtures and manages intangible assets. Focusing too much on short-term financial metrics would only kill its soul.
The second reason for our confidence is that we should not forget that POP MART has already achieved incredible success, leaving it with a formidable moat that won’t be easily surpassed by copycats in the short term.
The most formidable asset is its brand. POP MART now has significant branding power, not just at the individual IP level but also at the company level, both in China and, very uniquely, worldwide.
This immense brand equity gives them a significant edge over copycats and competitors in their dealings with all stakeholders, not just consumers. For example, they have moved into prime real estate locations across China and in many parts of the world, ensuring that each of its new product lines and IPs will be the first for their consumers to encounter. They have also built a great reputation with designers and a strong connection with their core community, which gives them a real edge in continuing to produce new product lines.
Last but not least, despite POP MART’s long-term mindset, they also care about shareholder interests.
This is unlike PDD, which is also a very long-term-focused company but has never shown a commitment to boosting shareholder returns, the main factor driving PDD’s extremely low valuation now. Most people do not doubt that Pinduoduo is a superbly run company. But investors are concerned that if a company never cares about minority shareholders' interests, the very foundation of any financial modeling based on distributable discounted cash flows will be pointless.
POP MART is different: it has also proven itself to be an investor-friendly company. Whenever the share price dropped dramatically, it bought back shares aggressively. In the several trading sessions since its share price tanked, the company has already repurchased close to 1% of its total capital. An aggressive share buyback will also be part of POP MART’s path toward stronger EPS growth, alongside sheer profit growth.
The latest data
Behind the paywall, you will see the latest data from BigOne Lab, our parent company, about POP MART’s latest performance in China.
The data below are currently accessible to all paid subscribers. But in the next few months or quarters, we will provide regular updates of this data (and similar data) for Baiguan Pro subscribers. One of the many key differences between a paid subscription and a Pro subscription is that Pro subscribers will receive much more ongoing data updates.
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