Summary
- POP MART’s stock slumped after a JPMorgan downgrade, erasing billions in value
- This is linked to a narrowing premium for Labubu dolls in secondary markets
- The company plans a new animation and toys to sustain long-term growth
POP MART, the Chinese toy giant, has recently experienced a significant slump in its stock price, raising questions about the future of its most iconic character, Labubu. The dip, which erased billions from the company’s value, has been attributed by some analysts to waning demand and a cooling of the “Labubu frenzy.” But a closer look at the company’s performance suggests the story is far more complex than a simple decline.
This shift in sentiment has brought POP MART International Group’s massive stock rally to a halt, erasing billions of dollars from the company’s value. The Chinese toymaker’s stock recently slumped nearly 9% in Hong Kong, its steepest decline since April, after a downgrade from JPMorgan Chase & Co. In the first half of 2025, the “Monsters” series, which includes Labubu, generated a staggering $677 million USD in revenue, a year-on-year increase of over 600%. POP MART’s overall revenue has more than doubled, demonstrating that while investor sentiment may be fragile, consumer demand remains incredibly strong.
The recent decline in secondary-market prices, which has concerned some analysts, is in fact a sign of the company’s own strategy at work. Pop Mart has actively increased production to curb the power of scalpers and make the toys more accessible to genuine fans. This deliberate move to “prick the resale bubble” has lowered resale values, which in turn has dampened investor sentiment. JPMorgan’s analysts noted that POP MART’s valuation was “priced for perfection.” They warned that any fundamental miss or negative media reports, such as a drop in resale prices, could trigger an underperformance. This downgrade comes amid growing signs that the premium once commanded by Labubu dolls in China’s secondary markets is narrowing. The stock has now lost almost a quarter of its value, or about $13 billion USD, since reaching a record high in late August.
The company’s long-term vision is not of decline, but of evolution. With plans for a Labubu animated series and continued global expansion, Pop Mart is working to transition the character from a viral, niche collectible to a sustainable, long-term intellectual property with a diverse fan base. POP MART’s stock is still up over 180% year-to-date and remains the top performer on the Hang Seng Index. However, JPMorgan analysts expressed caution, noting that the visibility of these catalysts remains low. This volatility suggests that while Labubu’s popularity is not necessarily gone, the era of a rapid, speculative boom may be.
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