Has POP MART trapped Duan Yongping?

Duan Yongping, one of the most prominent value investors in China with a massive fortune of hundreds of billions, is currently caught in an awkward situation verging on being trapped in an investment position.

According to the disclosure from the Hong Kong Stock Exchange on July 10, renowned investor Duan Yongping has recently increased his holdings in Pop Mart once again, raising his total number of shares to 102 million.

Calculated based on Pop Mart's latest price of HKD 157 per share, the market value of Duan Yongping's position has exceeded HKD 16 billion, equivalent to approximately RMB 13.8 billion.

However, this multi-billion-scale investment is now potentially on the verge of a temporary "trapped" situation. Recently, Pop Mart's stock price has been hovering around HKD 155 per share, which is extremely close to the estimated cost of Duan Yongping's holdings speculated by the public.

This real-time, publicly visible "investment story of a legendary figure" is highly anticipated for its future developments.

01 Duan Yongping Makes a Massive "Bottom-Fishing" Move on Pop Mart

Relevant information indicates that Duan Yongping likely purchased Pop Mart shares through his overseas investment entity, H&H International Investment.

H&H currently holds 101.86 million shares of Pop Mart, accounting for 7.65% of the total share capital, making the total investment scale exceed RMB 13.8 billion.

The public speculates that the majority of H&H's over RMB 1000 billion investment portfolio consists of assets belonging to Duan Yongping and his associates. Based on clues such as shareholding ratios and the investment platform, Pop Mart has become the most significant new position that Duan Yongping has built in recent years.

02 An Investment Style That Bears Striking Resemblance to Warren Buffett

Over his more than 20-year investment career, Duan Yongping has delivered exceptionally outstanding returns. Moreover, the assets he acquired are not "exclusive varieties" inaccessible to ordinary investors — such as strategic allocation of new shares alongside other tycoons, or pre-IPO stakes in popular stocks.

Duan Yongping's major investments have all been made publicly, where he allocated heavy positions in common stocks of listed companies and subsequently reaped substantial gains. Examples include Apple, NetEase, Moutai, China Shenhua, and many others.

As a result, Duan Yongping is widely regarded by the public as the investor in China who most closely resembles Warren Buffett: a legendary investment guru who earns profits through genuine capabilities in the secondary market.

03 Acquiring Pop Mart's Shares Through a Distinctive Approach

What is quite interesting is that Duan Yongping's latest move also shows remarkable similarity to Buffett's style.

First and foremost, he selected a widely discussed yet highly controversial target: Pop Mart.

Secondly, he adopted a Buffett-style buying strategy: establishing his position by selling put options.

Selling put options means that Duan Yongping provided a form of "insurance" to all option buyers, granting them the right to sell Pop Mart shares to him at a pre-determined price.

Correspondingly, Duan Yongping received substantial option premiums as compensation for providing this insurance. In the context of his position-building strategy, this effectively gave him the opportunity to acquire Pop Mart shares at a price even lower than the pre-set strike price.

Buffett has also employed a similar position-building strategy in the past.

04 Astonishingly Rapid Position Accumulation

Theoretically, building a position through selling options typically extends the entire accumulation period over a longer timeframe. But Duan Yongping did not follow this pattern this time.

The reason was that Pop Mart's stock price plummeted at an extraordinarily fast pace.

Due to the rapid decline in share price, a large number of put options were exercised, enabling Duan Yongping to build his position at an exceptionally fast speed.

Documents show that in April, Duan Yongping sold a large volume of put options with strike prices ranging from HKD 145 to HKD 150. However, after May, the options he sold began to be exercised in massive numbers, forcing him to purchase large quantities of Pop Mart shares.

Likely to raise liquidity, Duan Yongping even fully liquidated his long-held position in China Shenhua Energy — a domestic coal enterprise with the most stable operational performance, top-tier technical capabilities, and the most complete coal chemical industry chain.

To fund his acquisition of Pop Mart shares, Duan Yongping has completely sold off all his holdings in China Shenhua.

05 Why Did He Choose to Invest in Pop Mart?

Judging from his decision to sell existing holdings to purchase Pop Mart, at least in Duan Yongping's current perspective, Pop Mart's value surpasses that of Shenhua.

However, just a year ago, Duan Yongping did not hold this view. His attitude towards Pop Mart underwent a complete 180-degree transformation within the past year.

Around August 2025, when Pop Mart achieved explosive global popularity — with limited-edition Labubu toys selling out instantly, second-hand exclusive products being resold at multiple times their original price, and long queues forming outside offline stores — Duan Yongping's evaluation of Pop Mart was not nearly as positive as it is now.

At that time, acting like a seasoned veteran of value investing, he remarked: "Pop Mart's products are genuinely interesting, and its founder is highly capable, but I cannot fathom what the company will look like 10 years down the line."

In January 2026, his stance softened slightly but still retained skepticism: "I have briefly reviewed the business, and it is indeed quite impressive. Nevertheless, I still cannot understand why people would desire these products. What if consumers lose interest in them in a couple of years?"

This attitude definitively shifted on March 30, 2026. At that time, Pop Mart just released its 2025 annual financial report, and its stock price plummeted immediately after the company issued a relatively conservative profit growth guidance.

However, in March of this year, Duan Yongping posted on an investment social media platform, stating that he was retracting his previous statement that he would not invest in Pop Mart.

He explained that he believed Wang Ning (founder of Pop Mart) shared the same level of understanding and relentless pursuit of product excellence as Steve Jobs (former chairman of Apple), or at least would reach that level in the future.

He even praised Wang Ning, claiming that his comprehension of business operations seemed to be marginally superior to Steve Jobs'.

After that, he accelerated his buying spree, and within less than four months, he became Pop Mart's second-largest shareholder, second only to the founder Wang Ning.

06 What Triggered This Transformation?

From this year's perspective, Pop Mart's stock price movement can seemingly be explained by its fundamental performance.

First of all, for the full year 2025, Pop Mart recorded total revenue of RMB 37.12 billion, representing a year-on-year increase of 184.7%; its adjusted net profit reached RMB 13.08 billion, up 284.5% year-on-year, with an impressive gross profit margin of 72.1%.

However, the annual report provided a guidance for the following year's performance growth of around 20%.

Although the release of Pop Mart's first-quarter operational data showed that its revenue increased by 75% to 80% year-on-year, the deliberate omission of specific profit figures still easily led investors to form unfavorable assumptions.

Nevertheless, Duan Yongping, who focuses on long-term value, seemingly did not concern himself with these short-term details. Over the past few months, he has expressed increasingly positive affirmations towards Pop Mart.

In April, he detailed the entire process of his cognitive transformation, stating:

"It was only after reviewing this latest financial report that I conducted a thorough in-depth analysis of Pop Mart. Previously, I only came across scattered snippets of Wang Ning's remarks and some short video content. I already had a favorable impression of Wang Ning in the past, but I always felt that this business was too distant from my usual investment scope, difficult to fully understand, and uncertain about its long-term sustainability. I have witnessed many faddish toys that were once wildly popular, such as Tamagotchi, the Hula Hoop, and the Rubik's Cube. Initially, my instinct told me that Pop Mart might be similar to those fleeting trends, and its price-to-earnings ratio was extremely high in the previous two years. I am genuinely curious whether my proven understanding of the gaming industry will yield similar returns in the case of Pop Mart. In short, my 'Pop Mart Insurance Company' has officially commenced operations."

Based on this account, Duan Yongping's transformation in his perception of Pop Mart primarily stems from two key points:

First, he has fully grasped Pop Mart's business model and intuitively connected this enterprise to the gaming industry, a sector he is highly experienced in analyzing.

Second, he holds an extremely high opinion of Wang Ning, which strongly underpins his decision to invest in Pop Mart.

07 What Will the Final Outcome Be?

In the short term, the market has clearly not recognized Duan Yongping's investment. After Duan Yongping "announced" that his holdings in Pop Mart exceeded RMB 10 billion on July 10, the stock price closed at HKD 150.7, representing a 55.7% decline from its peak, and it also fell below Duan Yongping's average cost per share.

However, for an investor of Duan Yongping's caliber, holding a company is certainly not driven by short-term speculative trading cycles spanning one or two years. It is highly probable that he intends to hold the position for the long term.

As such, the short-term trapped position is unlikely to have any meaningful impact on Duan Yongping — he may not even feel the slightest disturbance about it.

The factor that truly matters to Duan Yongping is Pop Mart's revenue and operational performance over the next 5 to 10 years, which will ultimately determine the success or failure of his multi-billion investment.

This critical determinant can be further broken down into three core prerequisites:

1. The industry that Pop Mart operates in will maintain a long-term growth rate significantly higher than the global GDP growth rate in the coming years;

2. Pop Mart's market position within its industry will remain highly secure and unshakable over the next 5 to 10 years;

3. Pop Mart maintains excellent corporate governance, ensuring that Duan Yongping and other secondary market investors can fully share in the company's growth returns.

In this regard, the author believes that the most challenging of the three prerequisites is the first one — the long-term growth rate of the industry itself.

The judgment on this future prospect will ultimately decide whether Duan Yongping's investment this time is a success or failure.

08 Even Warren Buffett Once Failed to Fully "Understand" Disney

In reality, a challenge similar to what Duan Yongping is facing was once encountered by Warren Buffett decades ago.

This case was Disney in the 1960s.

In 1966, Disney's total market capitalization was merely USD 90 million, with abundant cash reserves on its balance sheet. The 36-year-old Buffett invested USD 4 million to acquire approximately 5% of the company's shares.

At that time, he valued Disney purely as a film production company and sold his stake for USD 6.2 million one year later. However, if he had held that investment until the 1990s, its value would have exceeded USD 1 billion.

Nearly 30 years later, in 1995, when Disney acquired the American Broadcasting Company (ABC), Buffett re-acquired roughly 3.6% of Disney's shares through share swaps and additional purchases. This time, he held the position for a longer period but fully liquidated his stake in early 2001, once again missing out on the stock's massive surge over the subsequent 20 years.

The Disney of that era was more like a content empire with multiple revenue monetization channels. Valuing it solely based on the metrics of a traditional film company would undoubtedly underestimate its enormous growth potential.

Nevertheless, even the greatest IP empires can face periods of stagnation. Disney's current stock price hovers around USD 96, having declined by approximately 20% over the past 12 months.

Perhaps, determining the true value of a company built on intellectual property and emotional connections with consumers is a question that even Warren Buffett himself could not easily provide a perfect answer to.

This article originates from the WeChat Official Account "Capital Matters", written by Shi An, edited by Yuan Chang, and published with authorization from 36Kr.