ZhiKe | Labubu Becomes a Hit, Pop Mart's Performance Soars, but Why Isn't the Market Buying It?
Author | Fan Liang
Editor | Ding Mao
On July 15th, Pop Mart released a strong performance forecast.
The performance forecast indicates that Pop Mart's revenue growth rate in the first half of 2025 increased by no less than 200% year - on - year, and the net profit (excluding the fair value change gains and losses of financial instruments not yet fully counted) may have increased by no less than 350% year - on - year. Based on this calculation, the company's revenue in the first half of the year will exceed 13.6 billion yuan, and the net profit will exceed 4 billion yuan, achieving the strongest performance since the company went public in 2020.
Although the performance forecast was eye - catching, the Hong Kong stock market behaved unusually this time. Pop Mart's stock price did not continue to rise. Instead, it fell by 4% on the day after the forecast was released and had a slight correction in the following trading days.
So, why isn't the market buying it? Does the company still have opportunities in the future?
Performance explosion but still needs long - term verification
There is a relatively obvious difference in the overall investment styles between the Hong Kong stock market and the A - share market: The Hong Kong stock market mainly conducts transactions around specific performance. The release of financial reports/performance forecasts is often the starting point of a market trend. In contrast, the A - share market mainly conducts transactions around expectations, and the release of financial reports/performance forecasts is often the end of a market trend.
Reviewing Pop Mart's market trend since 2024, the months when its stock price soared were often the months when the financial reports were released, such as March and August 2024, and March 2025, which is in line with the transmission trend of performance - stock price. However, this time Pop Mart released its strongest performance since going public, but the company's stock price started to correct, which is quite similar to the style of "good news exhausted" in the A - share market.
There are two reasons for this trend: First, the funds that had been lying in wait in the early stage began to leave. Second, the matching degree between performance and valuation fell into a divergence range, that is, the market has doubts about the sustainability of Pop Mart's performance growth.
Chart: Pop Mart's stock price trend after the release of annual financial reports. Source: Wind, compiled by 36Kr
Calculated based on a 350% year - on - year increase in Pop Mart's net profit in the first half of the year, the company's net profit in the first half of the year will exceed 4 billion yuan. Extrapolating linearly to the whole year, Pop Mart's annual net profit is likely to break through the 8 - billion - yuan mark. This profit level corresponds to a dynamic price - to - earnings ratio of about 40 times and a rolling price - to - earnings ratio of about 50 times for the company.
Looking at Pop Mart's historical valuation, its price - to - earnings ratio (TTM) from March 2022 to March 2025 was mostly below 50 times, and the dynamic price - to - earnings ratio was mostly below 40 times. For example, according to Wind data, the median PE (TTM) of Pop Mart since its listing is 49.32 times. Therefore, even considering Pop Mart's soaring performance, the company's price - to - earnings ratio is still above the historical central level.
Comparing the price - to - earnings ratio (TTM) levels of Pop Mart after the release of several financial reports from 2024 to the present, the PE (TTM) corresponding to the performance in March 2024 and August 2024 was 25 times and 35 times respectively, significantly lower than the historical valuation center. The subsequent rise of the company can be regarded as a process of valuation repair. After the release of the financial report in March 2025, Pop Mart's price - to - earnings ratio (TTM) was about 50 times, close to the historical center. Its stock price continued to rise subsequently, and the price - to - earnings ratio once exceeded 100 times, exceeding the 80th percentile of history. In other words, the previous high valuation could no longer be explained by the realized performance, which was more like a state of boosting the valuation to bet on expectations in the A - share market.
After the release of the performance forecast in July 2025, the soaring performance brought Pop Mart's price - to - earnings ratio (TTM) back to the level of 50 times, but the market is no longer willing to pay for the company's higher valuation. Why?
Theoretically, any current high valuation needs to be digested by real performance in the future. For Pop Mart, when valued according to the traditional PEG valuation method (PEG = 1), even if the current price - to - earnings ratio of 40 - 50 times remains unchanged, the company needs to achieve a compound profit growth rate of 40% - 50% in the next 3 - 5 years, which is not easy for Pop Mart, whose performance has soared and whose scale has reached a certain level. Or rather, the market believes that it is not easy for Pop Mart to maintain a compound profit growth rate of 40% - 50% in the future based on the current performance.
Perhaps the reason is that the soaring performance of Pop Mart in the first half of 2025 was largely driven by the popularity of Labubu. Whether Labubu can maintain its popularity in the future and whether the company has new IPs to continue the myth of Labubu are still highly uncertain, which leads the market to have doubts about the sustainability of Pop Mart's performance.
In 2024, Labubu's sales exceeded 3 billion yuan, accounting for more than 23% of the annual revenue. According to an interview with Wang Ning, the founder of Pop Mart, by People's Daily, after September this year, Labubu's monthly sales may be nearly 10 million pieces. In terms of price, the official domestic price of a single Labubu blind box is generally between 59 - 99 yuan, and in the eurozone, such as Germany, the price of a single blind box starts at 15 euros (equivalent to about 120 yuan in RMB). Even calculated based on the domestic price range, Labubu can bring about 600 - 1 billion yuan in sales (including tax) to Pop Mart every month. Just a rough estimate: Assuming that Labubu's sales volume reached 10 million in the first half of 2025, then the corresponding sales in the first half of 2025 are about 3.6 - 6 billion yuan, accounting for about 26% - 44% of Pop Mart's revenue in the first half of the year. Considering the popularity of Labubu in the first half of the year, its proportion in Pop Mart's revenue should be much higher than the 23% in 2024. In contrast, Molly, another core IP of Pop Mart, accounted for 27% and 14.2% in 2019 and 2020 respectively.
Therefore, Pop Mart's explosive performance forecast is mainly driven by the growth of a single IP. At the same time, whether Labubu can maintain its popularity has not been tested over a long - term cycle, and the company's valuation has risen significantly this year. It is understandable that the capital market takes a cautious attitude at this time.
Overseas market can do more than just recreate another Pop Mart
After the start of Pop Mart's market trend in 2024, going global became the hottest topic for Pop Mart. So, has going global reshaped Pop Mart's business structure? By observing Pop Mart's performance growth from 2021 to 2024, the following two phenomena can be found:
(1) The revenue growth rate of Hong Kong, Macao, Taiwan and overseas markets is much higher than that of the Chinese mainland, and the revenue proportion is constantly approaching that of the mainland. It is very likely to exceed the mainland in 2025. From 2021 to 2024, the offline direct - sales revenue in the Chinese mainland increased from 2.138 billion yuan to 4.526 billion yuan, with a compound growth rate of 28%. The offline direct - sales revenue in Hong Kong, Macao, Taiwan and overseas markets increased from 0.5 million yuan to 3.071 billion yuan, with a compound growth rate of 750%. Wang Ning also pointed out in an interview with People's Daily that "in 2025, overseas sales are likely to exceed domestic sales."
Chart: Pop Mart's revenue structure and store situation. Source: Company announcements, compiled by 36Kr
(2) The revenue per overseas store is much higher than that of domestic stores, with greater growth potential. In 2024, 401 stores in the Chinese mainland supported 4.526 billion yuan in revenue, while 130 stores (including joint - venture stores) in Hong Kong, Macao, Taiwan and overseas markets could support 3.071 billion yuan in revenue. According to statistics from Guojin Securities, the revenue per overseas offline store of Pop Mart in 2024 was nearly three times that of domestic stores.
Chart: Comparison of revenue per store between stores and robot stores. Source: Guojin Securities, compiled by 36Kr
The reasons are as follows: First, the product pricing overseas is higher. In 2024, the gross profit margin of offline products in the Chinese mainland was 66.4%, and the gross profit margin in Hong Kong, Macao, Taiwan and overseas markets was 72.3%. Assuming the same cost for both, the overall selling price in Hong Kong, Macao and overseas markets is actually 20% higher than that in the Chinese mainland. If divided by regions, the selling price in Europe and the United States is much higher than that in the Chinese mainland, and the selling price in Southeast Asia is similar to that in the Chinese mainland. For example, for the same Molly blind box, the selling price in Germany is about 143 yuan in RMB, about 95 yuan in RMB in Thailand, and the selling price on domestic third - party platforms is 90 - 120 yuan. Second, the density of overseas stores is lower. In 2024, Pop Mart had a total of 401 stores in China, and 241 of them were in 19 first - tier and new first - tier cities within the statistical scope, while the total number of stores in Hong Kong, Macao, Taiwan and overseas cities was only 130.
Chart: Comparison of Pop Mart's product selling prices. Source: Pop Mart's official website, Tmall, compiled by 36Kr
(3) The proportion of online revenue shows a trend of first decreasing and then increasing. In the domestic market, after the pandemic control was relaxed in 2023, offline revenue grew rapidly, while online revenue declined year - on - year and its proportion decreased. However, it showed a recovery trend in 2024. In the Hong Kong, Macao, Taiwan and overseas markets, the rapid expansion of offline stores in 2022 and 2023 led to a sharp decline in the proportion of online revenue, but the proportion also began to increase in 2024. Both the Hong Kong, Macao, Taiwan and overseas markets and the domestic market showed a state where offline revenue increased significantly - the proportion of online revenue first decreased and then increased. It is speculated that offline channels played a role in diverting traffic to online channels. In the future, after Pop Mart significantly expands its offline channels, it is expected to drive online sales simultaneously.
Chart: Proportion of Pop Mart's online revenue. Source: Company announcements, compiled by 36Kr
Therefore, based on the above data, the conclusion is: The rapid growth of the overseas market has reshaped Pop Mart's business structure. In the future, the company's store - opening plans overseas will become the most critical variable affecting the company's financial performance.
Pop Mart disclosed that in 2025, the company will open 100 new offline stores in the overseas market, mainly in two directions: First, increase the store coverage in North America and Europe. Second, open larger - scale stores in better locations. According to statistics from Pop Mart's official website and Google Maps, as of July 26th, Pop Mart had a total of about 163 stores in Hong Kong, Macao, Taiwan and overseas markets. Among them, there were about 32 stores in Hong Kong, Macao and Taiwan in total, about 37 stores in Southeast Asia in total, about 19 stores in Japan and South Korea in total, about 43 stores in the United States in total, about 19 stores in Europe in total, and about 13 stores in Oceania in total.
In comparison, Guojin Securities statistics show that as of March 2025, Pop Mart had about 23 stores in the United States. Therefore, it is not difficult to find that Pop Mart's store expansion speed in the North American market has indeed accelerated significantly, and the company's current store expansion is mainly concentrated in the United States and Southeast Asia. Based on Pop Mart's goal of adding 100 stores in 2025, the current progress is about 30%. It is speculated that Pop Mart will continue to accelerate its store - opening actions in the second half of 2025. It also shows that the channel expansion was not the main driving force for Pop Mart's performance growth in the first half of the year.
Chart: Distribution of Pop Mart's stores. Source: Pop Mart's official website, Google Maps (calculated based on the higher number of the two)
So, can the overseas market bear Pop Mart's surge in store - opening plans?
Current data shows that the overseas market can not