Pop Mart International Group, known for being the creator of Labubu, is facing a 10% drop in its share price over the past month. However, analysts from firms such as Morgan Stanley believe that this market correction represents a strategic buying opportunity given the company’s global growth prospects.
Morgan Stanley’s forecasts are optimistic: Pop Mart could reach sales of USD 4.3 billion in 2025 and up to USD 6 billion in 2026. Additionally, it is estimated that 60% of its operating profit will come from international operations this year, positioning it as a global consumer brand.
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Labubu, the character designed by Hong Kong-born artist Kasing Lung, has been the flagship of this international expansion. Its popularity has crossed borders, capturing the attention of celebrities like Lisa (BLACKPINK), David Beckham’s family, and Rihanna, propelling the brand to global recognition levels.
What are the factors behind Pop Mart’s 10% stock decline?
Since Pop Mart launched the third version of its iconic character Labubu (Labubu v3), some investors perceive that the brand’s momentum has slowed down. Nevertheless, Morgan Stanley emphasizes that the company “continues to launch popular new products”, demonstrating that its innovation capacity remains intact.
Morgan Stanley recalled that both Labubu v1 (end of 2023) and Labubu v2 (mid-2024) were key sales drivers, but investors took time to recognize their true commercial impact. This situation could repeat itself with future iterations of the brand.
This is how Pop Mart is fighting Labubu counterfeits
One of Pop Mart’s most significant moves was its decision to restock popular collectibles in June 2025, which caused a sharp drop in resale prices. Figures from the “Labubu Big Into Energy” series, which used to sell for tens of thousands of yuan on platforms like Xianyu, are now priced at an average of 150 yuan (USD 21), which is 50% above their original price.
Despite this adjustment in the secondary market, Morgan Stanley considers that Pop Mart’s strategy aims to achieve a “sustainable balance” between supply and demand, given that most of its products are designed for mass-market consumption rather than limited editions.
What role does direct-to-consumer (DTC) play in Pop Mart’s success?
A key aspect of Pop Mart’s strategy is its focus on direct-to-consumer (DTC) sales, which accounts for 90% to 95% of its total sales. This model allows the company to obtain detailed and real-time data on consumer behavior, which is essential for adjusting product supply and anticipating consumption trends.
According to Morgan Stanley, this access to granular information is what enables the company to “effectively indicate when to reduce supply”, thereby optimizing inventory management.
How did Labubu impact Pop Mart’s revenue in 2024?
The success of Labubu and other lines such as Skullpanda and Crybaby fueled a 107% increase in Pop Mart’s revenue, reaching USD 1.8 billion in 2024 compared to the previous year. The company also announced it expects a 350% increase in net profit for the first half of the year, driven by a revenue increase of over 200%, thanks to strengthened brand recognition and a diversified product portfolio.
Despite these record figures, Pop Mart’s share price has decreased by about 5% since the publication of its half-year projections. From its peak of HK\$269.60 on July 8, its shares have lost up to 10% of their value.
In the long term, Pop Mart’s outlook remains solid. The toy market in China reached 525.1 billion yuan in 2024 and is projected to grow at a compound annual growth rate of 8% through 2029, according to data cited by CICC.
Analysts agree that Pop Mart has the capability to consistently incubate new intellectual properties, which represents a competitive advantage in an expanding sector.
When will Pop Mart release its financial results?
Pop Mart is scheduled to announce its financial results during August, a report that will be key to evaluating how its sales are evolving following the impact of Labubu v3 and its restocking strategy.
