Pop Mart Stock Plummets Amid Labubu Reliance Fears

Pop Mart International Group Ltd.'s stock experienced a significant selloff, plunging over 30% in five sessions through Tuesday. This drop extended a nearly 60% decline from its record high in August, erasing approximately $33 billion from its market capitalization. The sharp fall was triggered by earnings results revealing an increasing reliance on the popular Labubu dolls, which represented 40% of total revenue last year, up from 23% in 2024.

Analysts have expressed concerns about Pop Mart's ability to replicate Labubu's success with other products. Deutsche Bank AG downgraded the stock to sell, citing weakening overseas and domestic sales, high inventory levels, and continuous downward earnings revisions. Despite efforts to diversify its intellectual property, other figures like Crybaby and Molly have shown weaker-than-expected sales. Pop Mart's inventory turnover days have also increased by 21% to 123 days as of end 2025.

Even with cheaper valuations and active stock buybacks, investor confidence remains low. The company has repurchased approximately HK$1.3 billion in shares since a significant drop on March 25. Short sellers have increased their positions, and bearish options contracts have reached record highs. Pop Mart is now accelerating the launch of emerging characters and expanding Labubu's global appeal through collaborations and a planned animated film, seeking to win back investor trust by demonstrating IP longevity and new blockbuster potential.