Can Pop Mart Handle the Weight of Its Own Success?

As the 2025 holiday season unfolds, Pop Mart’s stock stands at a pivotal crossroads. The company is delivering record-breaking festive sales, yet its share price has corrected nearly 40% from August highs.

HK one-year chart:

SG chart (Pop Mart HK SDR (SGX: HPPD) is a new launch in Aug 2025):

This disconnect between booming demand and falling valuation captures the core investor dilemma today: when growth becomes explosive, can a company continue to sustain — and justify — its own success?

1. The Festive Reality: Pop Mart Becomes a Gifting Powerhouse

Pop Mart’s 2025 Christmas collection underscores just how far the brand has come, evolving from a niche collectible label into a mainstream global gifting phenomenon. The Dimoo Christmas Tree and Skullpanda: Let It Snow sold out globally within minutes, driving strong foot traffic across both online platforms and physical stores.

Its appearance at the Macy’s Thanksgiving Day Parade further cemented Pop Mart’s cultural crossover into Western markets, coinciding with a sharp surge in holiday sales.

Yet, early signs of hype fatigue are emerging in the secondary market. Resale prices for more common festive figures — once inflated by 300% markups — have cooled to 30–50% premiums. While this moderation is a natural phase in the collectible lifecycle, it has raised concerns among analysts that Pop Mart could be vulnerable to “fad risk,” drawing parallels to the Beanie Baby bubble of the 1990s.

2. Fundamentals vs. Market Sentiment

The Bull Case:
Pop Mart’s fundamentals remain strikingly strong. Q3 2025 revenue surged 245–250% YoY, with Americas growth exceeding 1,200%, highlighting the brand’s global scalability. With net margins around 35% and a repurchase rate above 50%, the company appears structurally well-positioned for long-term growth despite the recent share price correction.

The Bear Case:
At the same time, investors are questioning sustainability. The cooling Labubu craze, combined with decelerating growth in key markets, has reignited concerns over single-IP dependency. North American growth slowing from 1,000%+ to 424% has led some to argue that Pop Mart may be experiencing a “slowing rocket ship” effect, where markets punish even strong companies once momentum peaks.

3. The Reversal Thesis: Why the “Spring” Is Loading

Following the near-40% correction, Pop Mart’s valuation reset may be laying the groundwork for a potential rebound.

Valuation Disconnect:
Forward P/E has compressed from above 50x to around 28x–32x, making Pop Mart historically inexpensive for a company still growing earnings at over 100% annually. This compares favourably with slower-growing global IP peers such as Sanrio (Hello Kitty) and LEGO.

The “Disney” Pivot:
While reliance on Labubu remains a risk, 2026 presents meaningful de-risking opportunities:

• The Labubu & Friends animated series could shift Pop Mart from a toy seller to a content-driven IP platform

• A potential Labubu movie could re-rate the stock as a global IP leader

• Emerging IPs like Peach Riot and Twinkle Twinkle signal improving diversification across products and markets

4. Key Takeaway: A Generational Buying Opportunity?

Pop Mart’s current pullback reflects a market grappling with a familiar paradox: extraordinary success can raise expectations faster than fundamentals can keep pace.

While hype fatigue and IP concentration remain valid concerns, the company’s valuation reset — coupled with upcoming animation and new IP catalysts — could offer a compelling opportunity for investors willing to look beyond short-term volatility.

Takeaway for Investors:

• Holiday demand remains robust, reinforcing brand strength

• Long-term growth hinges on IP diversification and animation execution

• Valuation has reset to historically attractive levels

• New media and IP catalysts could reignite the next growth phase

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