On March 25, Pop Mart released its full-year 2025 financial report, showing revenue increased by 185% year-over-year to 37.12 billion yuan. While this growth rate remains impressive, it slightly missed the market's previously high expectations.
Following the earnings release, capital markets reacted swiftly. Investors voted with their feet, sending Pop Mart's stock price plummeting 22.51% on the day, marking its largest intraday drop since April 2025. The stock has now retreated more than 47% from its historical peak. Short-selling volume on the day reached 25.29 million shares, with a total transaction value of 4.63 billion yuan. The sell-off continued the next day, March 26, with shares falling an additional 10%. On March 27, after a brief opening rise, the stock turned negative again, closing slightly down 0.6%.
Over the past year, Pop Mart has experienced a shift from being a darling of the IP economy to facing sustained outflows of institutional capital. Since last August, the company's stock price has fallen by more than half. By late March this year, many companies in previously high-growth new consumer sectors, such as pet supplies and trendy toys, also saw significant pullbacks after a round of rapid appreciation.
This shift in market sentiment is closely linked to changes in the broader macroeconomic narrative. In March, as the US-Iran-Israel conflict continued to escalate, capital preferences underwent a profound migration. As investors increasingly value and anchor their investments to a "safety premium," channeling funds into hard technology and core manufacturing stocks that have built moats around energy, supply chain, and technological security, the new consumer sector appears to have fallen out of favor.
In this new market narrative centered on the reordering of priorities and the "safety premium," will the story for Pop Mart and the broader new consumer industry mature further, or enter a period of more rational scrutiny?
The Demise of the "High Growth" Narrative
Judging by the latest financial figures, Pop Mart's performance in 2025 was still commendable. However, the impressive growth rate failed to alleviate investor concerns, primarily because the revenue figure fell short of the market's expectation of 38 billion yuan.
From an institutional perspective, the breaking of Pop Mart's "high-speed growth" narrative stems from several key triggers in the annual report.
Firstly, growth in overseas markets, led by the Americas, has decelerated. The annual report shows that in 2025, Pop Mart's revenue from the domestic Chinese market was 20.85 billion yuan, accounting for 56.2% of the total. Revenue from Asia-Pacific, the Americas, and Europe & other regions was 8.01 billion yuan, 6.81 billion yuan, and 1.45 billion yuan, accounting for 21.6%, 18.3%, and 3.9% respectively. Growth rates in all three overseas markets showed a significant slowdown compared to the first half and the third quarter. In the second half of 2025, growth in the Americas market plummeted from 1265% in Q3 to 633%, while Europe & other regions dropped from 735% to 436%. Overseas expansion is clearly cooling.
Secondly, there is the risk of over-reliance on a single IP. The annual report reveals that in 2025, Pop Mart had 17 artist IPs generating over 100 million yuan in revenue, and 6 IPs with revenue exceeding 2 billion yuan. The LABUBU family alone generated revenue of 14.161 billion yuan. However, as the LABUBU family's revenue contribution surged from 23.3% last year to 38.1%, this dominant, cliff-like lead has raised concerns in the capital markets about the company's IP incubation capabilities.
In response to the cyclical nature of IPs, Pop Mart is accelerating its transformation. The company revealed plans to launch IP-centric small home appliance derivatives in April, available on e-commerce platforms like JD.com. Concurrently, its jewelry brand and live-action animated film projects are progressing, aiming to explore a "second growth curve."
Overall, however, the signals from management during the earnings call were generally cautious and steady. CEO Wang Ning stated that Pop Mart's target growth rate for 2026 is no less than 20%, emphasizing a focus on achieving healthier, sustainable, high-quality growth rather than pursuing aggressive top-line growth without corresponding profit increases.
Looking at the top ten trading list for March 25, foreign institutions displayed mixed views on Pop Mart. Institutions like Citigroup, Standard Chartered, and Morgan Stanley sold shares that day, while Bank of America Merrill Lynch, UBS, and Goldman Sachs were net buyers. Mainland institutions such as Futu Securities and China International Capital Corporation (CICC) were net buyers of Pop Mart on March 25. Additionally, southbound capital from the Stock Connect programs accumulated a net purchase of approximately 1.36 million shares of Pop Mart on the same day.
A consumer-focused fund manager noted that the pricing differences reflect ongoing divergence in how the market qualitatively perceives Pop Mart. "A significant portion of people view it as a cyclical stock, but we consider it an IP platform company. The valuation methodologies for these two types of companies differ, and this divergence needs time to resolve. Globally, IP companies command a certain valuation premium, comparable to high-quality consumer goods companies, potentially justifying a valuation multiple of 20 times or more," the manager said.
An active equity fund manager from a Shanghai-based public fund company expressed that their investment research team believes Pop Mart is still in its early to mid-development stage, with future revenue potential aiming for 100 billion yuan. "After recent adjustments, Pop Mart's growth guidance and market expectations have returned to a comfortable zone for the company. Its current valuation is low, offering a high probability of success and significant potential upside," the manager added.
Public Funds Exit Pop Mart
After its IPO on the Hong Kong Stock Exchange in 2020 as the "first trendy play stock," Pop Mart's share price initially traced a "U-shaped" curve in the following years. From its listing highs to valuation contraction, and then a resurgence in late 2024 and early 2025 as the potential of the IP economy emerged, boosting the entire consumer sector, Pop Mart's capital story fueled the rise of the "new consumer" concept. Many fund managers who missed the earlier rally began delving into the development logic and investment opportunities within this youthful sector.
However, since the second half of 2025, weaker-than-expected consumption recovery, coupled with new product and IP incubation results not yet fully materializing, has led to a more conservative market sentiment. The market is granting longer observation periods for companies in transition, slowing the valuation recovery process.
Against the backdrop of a continuously declining stock price, selling pressure on this "trendy play leader" has re-emerged. Since late August 2025, after hitting a historical high of HK$339.8 per share, Pop Mart's stock price has undergone a sustained correction, falling nearly 30% by the end of 2025. Counting from the peak last August to the close on March 26, 2026, Pop Mart's market capitalization has been halved, with a cumulative decline of 55%.
Concurrently, institutional capital has been withdrawing in bulk. Wind data shows that the number of Pop Mart shares held by public funds decreased from 51.6994 million shares at the end of the third quarter of 2025 to 41.5352 million shares at the end of the fourth quarter of 2025, a reduction of 10.1642 million shares. Combined with the impact of the falling stock price and institutional selling, the total market value of Pop Mart holdings by funds dropped from 12.593 billion yuan at the end of Q3 2025 to 7.042 billion yuan at the end of Q4 2025.
From an institutional perspective, Fullgoal Fund, which had already reduced its position in Q3, continued selling in Q4, offloading 5.9355 million shares, the largest reduction among institutions, representing a decrease of 71.88%. Yongying Fund, Southern Fund, and China Universal Asset Management each saw their products reduce holdings by over 2 million shares in Q4.
During the same period, a total of 91 public funds no longer held Pop Mart as a top holding. Furthermore, 18 fund management companies, including GF Fund, China Construction Bank Investment Management, Da Cheng Fund, and Nuode Fund, had no funds with Pop Mart as a top holding by the end of Q4 2025.
Nevertheless, some fund managers remain confident in Pop Mart. For instance, at the end of Q4 2025, the Ruiyuan Hong Kong Stock Connect Core Value fund managed by Zhang Jialu bucked the trend by increasing its position in Pop Mart by 2.45 million shares, the largest quarterly increase across the public fund market. Invesco Great Wall Quality Longevity, which held the top position among public funds with 4.985 million shares, also added over 230,000 shares of Pop Mart in Q4 2025. Additionally, three other funds—Bocom Scholastic Selection, Yinhua Digital Economy, and Anxin Quality Enterprise—each increased their Pop Mart holdings by more than 400,000 shares in the fourth quarter.
New Consumption: Seizing Opportunities Rationally
Looking at the global market in 2026, as geopolitical conflicts continue to breed uncertainty, "safety" is becoming the world's scarcest resource.
Liu Yuhui, Deputy Director of the Shanghai Chief Economist Financial Development Center and a member of the China Chief Economist Forum, recently suggested that the old US dollar-centric order, anchored by the petrodollar, is collapsing, while a new Renminbi-centric order, built on the foundation of China's industrial strength, is being constructed. Chinese assets possessing advantages in energy security, supply chain resilience, policy stability, and pricing power are facing a systematic strategic re-rating.
However, every shift in narrative is accompanied by a rebalancing of portfolio structures. As capital flows towards the "safety premium," how will the once high-flying new consumer sector perform?
Cheng Yuxuan, a fund manager in the consumer group of Zhong Ou Fund, acknowledged that both new and traditional consumer sectors are linked upstream to crude oil. Therefore, the performance of different new consumer industries may diverge based on changes in oil prices. "Excessive cost pressures on small and medium-sized enterprises could compress their gross margins, forcing them to exit. For some new consumer sectors, if their industry structure is fragmented, pricing power is weak, and business models are relatively poor, they might face profit pressures in the second half of the year. Hence, we prefer to focus on new consumer segments with favorable industry structures and strong bargaining power," Cheng stated.
From a valuation perspective, Cheng Yuxuan pointed out that many new consumer companies are not at low points in their industrial cycles; their阶段性 positions are relatively high. Whether in the trendy play sector, which saw high景气度 last year, or the gold and jewelry industry, the market is likely to view the performance of related companies more rationally this year. Valuations will also tend towards rationality, with higher demands for the delivery of promised earnings.
Zhou Shaobo, Assistant General Manager of the Research Department and Fund Manager at Manulife Teda Fund, noted that 2025 was a year of significant divergence between new and old consumption, with new consumption posting substantial gains. Entering 2026, although new consumer company stock prices have been volatile, their current levels appear relatively attractive. "Barring extreme tail risks like persistently rising oil prices, we see significant opportunities in a batch of consumer companies. Their potential upside should be scarce and offer high赔率 within the entire market," Zhou believes. He added that in 2026, the overhang from the property sector is lifting, and with supply-side consolidation and structurally improving demand in the consumer sector, an opportunity not seen in the past three years is emerging.
Regarding stock selection, the aforementioned active equity fund manager suggested that 2026 might be a "structural growth year" where differentiation among new consumer companies intensifies, and the value of leading companies becomes more prominent. However, unlike the sector-wide high growth and high景气度 seen in certain sub-sectors like trendy plays and pet supplies in the first half of 2025, the consumer sector overall lacks broad beta opportunities in 2026. "The market will be more discerning, with opportunities更多地来源于 stock-picking. Personally, I favor companies with clear profit models and valuations that match their prospects," the manager mentioned.
