So torn! Stocks soar with performance, but prices plummet—how far can Pop Mart go relying on a single IP?

(Source: Feikan Finance)

On March 24, Pop Mart’s popularity soared, making it one of the most watched companies in Hong Kong stocks, as it presented a picture of serious divergence between performance and stock price.

That day, Pop Mart released a stunning 2025 financial report: full-year revenue of 37.12 billion yuan, a year-on-year increase of 184.7%; adjusted net profit of 13.08 billion yuan, a surge of 284.5%. In the consumer sector, given the current environment, such growth is truly rare.

However, the capital market responded very differently — after the earnings release, Pop Mart’s stock price plunged over 20% intraday, closing down 22.5%, marking the largest single-day drop since the company’s listing, with the stock price halving since the peak in August last year. This impressive report not only failed to boost the stock price but also triggered a capital exodus.

Bright Data, Hidden Concerns

On the surface, Pop Mart’s 2025 looks undoubtedly brilliant. But beneath the data, a dangerous signal is emerging: the company’s dependence on a single IP has significantly deepened.

The financial report shows that the company’s flagship IP LABUBU achieved full-year revenue of 14.16 billion yuan, a year-on-year increase of 365.7%. This means that one IP, LABUBU, accounts for 38.1% of the company’s total revenue, nearly four-fifths, up from just 23.3% in 2024.

This change warrants caution, indicating that for an IP-driven company, its risk resistance capability is also becoming more fragile.

Even more concerning is that this dependence is creating a “siphon effect.” According to a recent survey by Citibank, nearly half of consumers first encountered Pop Mart because of LABUBU, while the company’s recent efforts to promote new IPs like Supertutu have received lukewarm market responses, failing to capitalize on this traffic dividend. This means LABUBU not only contributes the majority of revenue but also bears most of the customer acquisition functions.

The market’s valuation logic is forward-looking. From a lifecycle perspective, any IP cannot sustain rapid growth indefinitely. Even foreign investment banks that have traditionally been optimistic about Pop Mart have issued cautious signals. Morgan Stanley, in its latest research report, predicts that LABUBU’s growth rate will slow significantly to low double digits in 2026. When the core engine is about to decelerate and the second growth curve is not yet formed, market anxiety inevitably erupts.

In fact, from Molly in the early days to LABUBU today, Pop Mart has experienced multiple core IP replacements. But the question is, are these transitions smooth? After LABUBU, where will the next billion-level IP come from? The market’s high valuation is based on the company’s systematic ability to continuously create hit products. If this ability is disproved or degenerates into reliance on occasional breakthroughs, the valuation logic will inevitably need to be reconstructed.

Who Will Take Over After LABUBU?

The sharp fluctuations in stock price, besides concerns about fundamentals, are also closely related to capital behavior.

According to data disclosed by the Hong Kong Stock Exchange, in the days leading up to Pop Mart’s earnings release, foreign institutional investors, represented by Citibank and J.P. Morgan, showed significant net selling. Some institutions that profited from the previous rally chose to “jump the gun” and exit after the good news was realized.

“The good news is all out, then it’s bad news” is not uncommon in the Hong Kong stock market. But the extent of this plunge clearly exceeds mere profit-taking. It reflects a fundamental doubt among institutional investors about the company’s future growth logic — when a company’s growth increasingly depends on a single IP, its growth certainty and sustainability are called into question.

During LABUBU’s peak dividend period, Pop Mart still had some valuable buffer time. But the market has already cast a “vote of no confidence” with this plunge: if a truly diversified IP matrix is not built before the next hit product appears, when the tide recedes, the market will no longer give a second chance.

Currently, Twinkle Twinkle is the most promising “dark horse” IP. Its sales reached only 390 million yuan in the first half of 2025 but exceeded 2 billion yuan for the full year, with an extremely steep growth curve. Its recent collaboration with Heytea triggered a rush to buy, with obvious premiums in the secondary market.

Additionally, CRYBABY achieved revenue of 2.93 billion yuan in 2025, up 151.4% year-on-year, nearing 3 billion, making it one of the most stable growth poles outside LABUBU. SKULLPANDA’s 2025 revenue was 3.54 billion yuan, up 170.6%, making it currently the largest IP in Pop Mart besides LABUBU. If content operation continues to break through, its ceiling could further expand.

However, the real challenge for Pop Mart is that the success rate of incubating new IPs is not 100%. KeyA’s cooling-off is a case in point. Therefore, whether the company can successfully “pass the baton” before LABUBU’s decline remains a key variable in its valuation logic.

Feikan Finance

Piercing through the business fog, interpreting company value