Pop Mart International Group Ltd’s stock dropped sharply on Monday, plunging 6.65% to HK$289 during intraday trading, with earlier lows touching HK$282.20 before recovering slightly. The sharp decline reflects growing investor concerns over product demand and profit-taking following its inclusion in major stock indices.
Market watchers attribute the sharp move partly to the toymaker’s recent elevation into the Hang Seng Index and Hang Seng China Enterprises Index, prompting some investors to cash in on rapid gains ahead of index-linked buying pressures.
Analysts have raised red flags over weakening secondary-market demand for its iconic Labubu series, particularly the newly released mini Labubu dolls. “Secondary market prices have been declining due to restocking and cooling demand for some series,” observed Jeff Zhang of Morningstar Inc., adding that growing negative feedback on new product quality is an issue the company needs to address promptly.
Pop Mart’s meteoric rise had already made waves—its share price has surged nearly 600% over the past year, fuelled by Gen-Z enthusiasm for “designer toys” and collectable blind-box models. Labubu and other series helped spark this frenzy, driving exponential revenue and profit growth across collectables markets.
However, intensified restocking efforts have triggered a sharp drop in resale values. Recent reports indicate that some Labubu series now resell at roughly half of what they once commanded, underscoring cooling investor sentiment.
Despite these headwinds, not all analysts are bearish. Morgan Stanley sees the current correction as a buying opportunity, citing Pop Mart’s strong IP engine, direct-to-consumer model, and the fading of artificially inflated resale prices should bring a more sustainable balance.
Overall, today’s sharp pullback signals an investor recalibration: balancing the company’s remarkable growth track record against rising concerns over product saturation and quality perception.
