The endogenous growth of any organism cannot be consistently high-speed and linear, unless it is a short-lived species.
On March 25, POP MART (09992.HK) released its 2025 financial report. Full-year revenue reached 37.12 billion yuan, a year-on-year increase of 184.7%; adjusted net profit was 13.08 billion yuan, up 284.5% year-on-year. Both the scale and growth rate of revenue and profit hit record highs since its listing.
However, this triggered a correction in the secondary market stock price, prompting the company to quickly take action to stabilize it. Since March 26, the company has conducted share buybacks for three consecutive days, repurchasing a total of 7.26 million shares with a cumulative amount of 1.098 billion Hong Kong dollars.
In recent news, investor Duan Yongping stated he was retracting his previous statement about not investing in POP MART. He pointed out that investing is about buying future total potential, and a bit of "acceleration" can lead to greater distance covered in a unit of time.
**Guidance Shift Leads to Price Correction** Behind the valuation drop, market interpretation points to a concentrated realization of three layers of expectation gaps: 1. Revenue fell slightly short: Full-year revenue was slightly below the expected 38 billion yuan. 2. IP structure risk: Revenue contribution from THE MONSTERS (primarily LABUBU) rose to nearly 40%, raising market concerns over over-reliance on a single IP. 3. Growth logic transition: Management provided growth guidance of no less than 20% for 2026 during the earnings call.
Clearly, a 20% growth rate would easily earn any consumer goods company a "high-growth" label. The problem lies in the transition: adapting to austerity after luxury is difficult. The psychological shift from lavish feasts back to simple meals can be jarring. Moving from triple-digit growth back to 20% inevitably triggers an initial investor reaction of "deceleration."
Against the backdrop of institutional crowding and a high stock price, such negative news was bound to trigger a "long squeeze" stampede effect.
Conversely, would management be unaware that such guidance would likely cause a significant valuation correction? In this view, discussing "conservative expectations" requires considerable courage. Acknowledging problems without avoidance is the first and most crucial step toward solving them.
In this regard, the case of Pinduoduo is memorable. In August 2024, when releasing its Q2 earnings, Pinduoduo executives clearly stated that future revenue growth would slow and announced no dividends or buybacks for the coming years. After the initial panic selling subsided, Pinduoduo's stock price stabilized relatively quickly. Compared to this, POP MART management's attitude and actions do not seem too unfavorable.
This company, generating tens of billions in revenue, faces immense growth pressure. In fact, this "conservative" performance guidance might have been foreshadowed earlier. CEO Wang Ning has repeatedly emphasized that "health" is the company's top priority. While developing rapidly, POP MART has successfully captured global attention and traffic. However, there is still room for improvement in areas like organizational management, inter-regional information flow, and coordination between middle and front offices.
So, how does POP MART, now actively managing its speed, plan to proceed? Before discussing that, let's examine its specific operational details.
**Is "One Superstar, Multiple Strong Players" a Structural Flaw?** In 2025, POP MART had 17 IPs generating over 100 million yuan in revenue, and 6 IPs exceeding 2 billion yuan. Among them, THE MONSTERS family, which includes LABUBU, contributed 14.16 billion yuan in revenue, making it the company's sole ten-billion-yuan-level IP, accounting for 38.1% of total revenue. The other five IPs with revenue over 2 billion yuan were SKULLPANDA (3.54 billion), CRYBABY (2.93 billion), MOLLY (2.90 billion), DIMOO (2.78 billion), and Starry Man (2.06 billion).
In terms of growth rate, the most impressive was Starry Man, a new IP launched in 2024, which achieved 2 billion yuan in revenue in less than two years, a 16-fold increase. In contrast, LABUBU was introduced around 2019 but saw modest initial sales until it broke through into the mainstream in 2023, growing into today's top-tier IP. Replicating a blockbuster is the "holy grail" of commerce; some attribute it to luck, seeing LABUBU's ten-billion revenue as difficult to duplicate. However, creating hits is not entirely without pattern. Could elevating an unknown IP to the hundred-million-yuan level be achieved by luck alone? The company has evidently developed a mature model for incubating and commercializing mid-tier IPs.
The growth rate second only to Starry Man belonged to LABUBU itself, with a year-on-year increase of 365.7%. Most other core IPs also achieved growth ranging from one to three times. In comparison, the classic IP MOLLY, while not as stellar in growth, remained vibrant with a 38.4% year-on-year increase. 2026 marks the 10th year of the company operating Molly. Overall, the "one superstar, multiple strong players" IP structure has become more consolidated. LABUBU's massive scale, reaching the ten-billion level, worries some investors about revenue concentration risks from a single dominant IP. But the continued strong performance of multiple IP tiers suggests it's not a case of "nothing growing under a big tree," but rather where excellence becomes the biggest competitor to mere goodness.
**Theme Parks and Movies: A Case of Unclear Value?** POP MART has never been content with being just a "trendy toy retailer," positioning itself as an "IP-driven fashion culture and entertainment group." It continually expands not only product categories but also the boundaries of its business ecosystem.
On March 30, the city theme park announced the upcoming opening of a new area. According to the earnings call disclosure, in 2025, despite a significant portion of the park being closed, both visitor numbers and revenue achieved very high growth rates. Additionally, the film co-produced with Sony Pictures for THE MONSTERS series is set to hit the big screen, currently in the scriptwriting phase.
Many express confusion over these moves. But POP MART is discovering firsthand that creating content holds far greater imagination and commercial value than simply making trendy toys. The blockbuster success of "Nezha 2" last year revitalized the entire IP licensing and co-branding industry chain. POP MART directly benefited from this trend, with related co-branded figurines selling out across all online platforms within just two days of release. If it can solidify LABUBU's unique content foundation through cinematic storytelling, it can truly establish a long-term, diversified monetization path for its IPs. Certainly, this path carries significant risks; failure could be costly. However, for POP MART, this is a necessary step in transitioning from a "trendy toy retailer" to a "fashion culture and entertainment group." If successful, the company's valuation logic could upgrade from being "single-product driven" to "full-scenario IP ecosystem monetization."
Long-term, POP MART's core strategies are twofold: the aforementioned IP-centric groupization, and internationalization. In 2026, the company will focus on expanding into markets like North America, South Asia, Europe, and South America. Domestically, the company is not prioritizing store count but rather focusing on store upgrades to enhance per-store efficiency. In 2025, the China market saw a net addition of only 14 physical stores. In 2026, the area slated for store renovations is expected to increase by 30%-40% to provide better product display and interactive spaces. Online, the company will advance refined layout strategies, such as independently operating the Xiaohongshu channel and continuing to strengthen its Douyin live streaming matrix.
Short-term, the company's growth drivers are clear. It will continue operating LABUBU and incubating new IPs. In 2026, the company plans to launch LABUBU World Cup collaborations, the 4.0 series, and significant artist collaboration series, among others. Beyond this, the company intends to focus on the following areas in 2026: 1. Strengthening expense control. 2. Advancing systematic upgrades in supply chain and logistics.
In 2025, the Americas (+748.4%) and Europe & Other regions (+506.3%) saw very high growth rates, driving the overseas revenue contribution to 43.8%. However, looking at quarterly figures, Q4 growth in the Americas and Europe slowed significantly, raising concerns about the sustainability of overseas business growth. The company attributed this to delays in new product releases or restocking times affecting sales in Europe and America, indicating that the foundation for global expansion still needs strengthening.
As long as POP MART holds the top position in the global trendy toy track, questions about "how long the hype will last" will persist. The guidance of no less than 20% growth proposed by Wang Ning is a reality the company must face after a period of hyper-growth. The endogenous growth of any organism cannot be consistently high-speed and linear, unless it is a short-lived species.
Fundamentally, the depth of POP MART's IP matrix, its capability for multi-category expansion, and its global growth potential have not fundamentally changed due to the stock price decline. The company's profitability remains at a high level within the industry, its financial structure is healthy, and it possesses strong risk resilience, with ten-billion-yuan-level cash reserves, no bank borrowings, and the ability to conduct buybacks. Furthermore, it continues to pay dividends, rewarding shareholders with real returns. The short-term sell-off might present long-term investors with an opportunity to reassess POP MART.
