Pop Mart, what kind of game are they really playing?

Source: CITIC Publishing House

The first “popping toy” stock on the market, Pop Mart, is mired in the eye of the storm.

On March 30, after Pop Mart’s share price saw consecutive two days of drops exceeding 30%, it finally surged during the day and turned red again. At the same time, an investment heavyweight who rarely “changed his mind” made a rare reversal of his earlier judgment—Du Yongping posted on Xueqiu: “I’ve decided to take back what I said to Zhangfang—that I won’t invest in Pop Mart.”

This value-investing benchmark figure, who once said, “I can’t make sense of Pop Mart,” nonetheless chose to re-examine the company when Pop Mart’s share price underwent a major adjustment.

Just a few days earlier, Pop Mart released an “all-time strongest annual report” that left every consumer brand jealous. Full-year revenue was RMB 37.12 billion, up 184.7%; adjusted net profit was RMB 13.08 billion, up 284.5%. That LABUBU with rabbit ears and buck teeth, single-handedly contributed RMB 14.16 billion, up 365.7%, marking the first time a pop-toy IP pushed into the “100-million (RMB) club.”

However, the capital market’s reaction was a complete shock.

On the day the financial report was released, the share price fell 22.51%; the next day it fell more than 10% again. Over two days, the cumulative decline exceeded 30%, and the market value evaporated by more than HKD 250 billion compared with its peak.

The market’s “voting” logic is simple yet brutal: Pop Mart is too dependent on LABUBU. And, in 2026, it only promised growth of “not less than 20%”?

In the face of questions about “growth losing momentum,” Pop Mart’s founder Wang Ning offered a classic analogy in an earnings call: “In 2025, we were like a rookie racecar driver who suddenly got pulled onto the F1 track. In 2026, we hope to get into the pit stop, top up the fuel, and change the tires.”

On one side, earnings exploded but the market “voted with its feet,” wiping out market value; on the other, the attitude of top investors reversed. So what exactly happened to Pop Mart behind the scenes?

Earnings “explode” while the stock is “cut in half”—what is capital afraid of?

First, let’s revisit this strange “divergence.”

In 2025, Pop Mart not only broke through RMB 30 billion in revenue; its gross margin increased from 66.8% to 72.1%, and its net profit margin rose from 25.4% to 35.1%—a profit margin that can rival that of premium liquor.

But market panic was also clear, mainly reflected in two areas.

First, “LABUBU dependency” is intensifying.

In 2024, the revenue share of the THE MONSTERS family where LABUBU sits was 23.3%. In 2025, that figure surged to 38.1%. Citibank’s research showed that 47% of respondents only came into Pop Mart because of LABUBU.

This means many new users are “coming for LABUBU.” When capital sees a super hit accounting for nearly 40% of revenue, while new IPs such as Supertutu respond rather flatly and the secondary-market price is nearly halved, fear naturally arises.

Second, the “emergency stop” in growth guidance.

At the earnings call, Wang Ning provided the 2026 guidance: strive to achieve a growth rate “not less than 20%.” Compared with past growth often reaching three digits, this seems like a “slowdown.”

One industry commentator put it bluntly: earnings are the past completed, the stock price is the future in progress. Super earnings generated by a single super hit are not enough to support the market’s imagination for 2026, and the odds of continuously hitting super hits are even more unknown.

It is very reminiscent of the doubts Pop Mart faced when it listed with Molly back then.

Just as the market was full of pessimism, Du Yongping’s stance reversal became a signal worth pondering.

On March 30, Du Yongping posted on Xueqiu: “Economics’ ‘speed’ is actually acceleration in physics. What you buy in an investment is total output in the future—total output equals ‘speed’ multiplied by ‘time’ in physics, which gives the total length. Of course, some ‘acceleration’ will travel farther within a unit of time. Over these two days, I spent time looking at Pop Mart again, and decided to take back what I said to Zhangfang: that I won’t invest in Pop Mart.”

As early as last December, Du Yongping, in an interview with Wang Shi, had said: “I highly recognize the ability to turn emotional-value products into something like this. It isn’t just success by chance; it can’t be attributed to luck.” Although at that time he said, “I can’t make sense of Pop Mart, so I won’t invest or buy its stock,” he had already begun to look at the company differently.

In January this year, when facing questions from netizens, Du Yongping still stayed cautious: “I’ve roughly looked at Pop Mart and think they really are quite impressive. However, I still don’t understand why people would need something like this—what if two years from now everyone decides they don’t want it anymore?” But he also added: “If you can believe that people will always need it, and their business will keep growing, then that is obviously a pretty good investment for you.”

From “can’t make sense” to “take back the statement,” Du Yongping’s change is, to some extent, the continued evolution of his investment cognition. What prompted him to re-examine Pop Mart was precisely the posture the company displayed when its share price crashed: proactively slowing down, pursuing stable growth.

Pop Mart: its ambition goes beyond just an “E-box factory”

If you only look at the financial reports, you might think Pop Mart is a “super-hit manufacturing machine.” But in reality, its ambitions go far beyond that.

In the book Because Unique: Wang Ning, Pop Mart’s Founder, from a Corner Store to the IP World, written by well-known business journalist Li Xiang, Wang Ning repeatedly emphasized one viewpoint: Pop Mart is an IP operations company, not a blind-box company.

The book reveals a neglected detail: back in 2015–2016, when Pop Mart was still just an offline corner store, Wang Ning found that Japanese toy Sonny Angel had an extremely high sales share, and its repurchase rate was clearly higher than other categories.

It was this discovery that made him decide to cut down—to remove all other categories and go all-in on pop-toy IP.

The core of Because Unique is precisely the balance Pop Mart found between “uniqueness” and “the mainstream.” The book summarizes Wang Ning’s take on Pop Mart’s business model:

Industrialize the production of art (turning previously niche artists’ toys into standardized consumer goods), build ready-made channels (bringing pop-toys from niche circles into the public’s view), and transform the consumer market (turning pop-toys from a male-dominated “hobby” into a female-dominated “consumer product”).

These “basic skills,” described lightly in the book, have become the soil that today allows Pop Mart to incubate LABUBU.

On CCTV’s Dialogue, Wang Ning further explained the company’s barriers: “hard barriers” are accumulated from 16 years of fine-grained operations; “soft barriers” are the early discovery of the industry’s leading art artists.

He still remembers the line he said in 2016 when he met the Molly artist Wang Xinming: “I hope Molly can sell 1 million units a year.” Back then, it seemed like a pipe dream; now it already exceeds 10 million units a year.

So when the capital market anxiously asks, “Where is the next LABUBU?”, Wang Ning’s calm actually comes from expectations. In CCTV’s Dialogue, he said: “Any small sub-category can give birth to a great company. Doing one thing well is never easy.”

Today, when Du Yongping re-examines this company, what he sees is also precisely this kind of accumulation built “little by little.”

As Du Yongping said, investing is about “the total output of the future.” This total output isn’t built by stacking one blockbuster; it is accumulated through long-term operations.

A key idea emphasized again and again in Because Unique is: the vitality of an IP depends on whether it can be integrated into consumers’ everyday lives. At present, Pop Mart has already kicked off a series of strategic initiatives, trying to further break the stereotype of an “E-box factory.”

First, move into small home appliances to seize physical space.

In April, Pop Mart will roll out IP-based derivative small appliances—from electric kettles and coffee makers to hair dryers. This isn’t a cross-over in the traditional sense; the core is to expand the boundaries of IP expression. When LABUBU shows up at your dining table and in your bathroom, it is no longer just a toy—it becomes a “life companion.”

Second, build out content to create a spiritual universe.

In CCTV’s Dialogue, Wang Ning said: “Movies can deepen IP thickness. Their settings and stories can also be applied to theme parks and product development, constructing an integrated IP commercial framework.” In the second half of 2026, LABUBU will launch the 4.0 series; picture books and live-action animation films in cooperation with Sony Pictures are also in the works. If selling figurines used to be “selling aesthetics,” then making movies is “selling the soul.”

Third, iterate the theme park to strengthen immersive experiences.

At an earnings call, Pop Mart COO Sede revealed that City Theme Park Phase 1.5 is expected to debut in the summer of 2026, and Phase 2 is expected to start construction in 2027. It will add themed scenes for SKULLPANDA and Star Star people. This combo is strikingly similar to Disney’s path back then.

But all of this needs time.

In Because Unique, Pop Mart’s founder Wang Ning emphasizes—more than once—that one must “respect time” and “respect operations.” IP cultivation can’t be rushed; it needs time to mature stories, and it needs real life scenarios to strengthen memory.

He believes, “We belong to long-termism. We think that what needs to be done in a decade should not be rushed—don’t think it can be done in one or two years.” In his view, slow is fast, and less is more. Focus on one thing and do it gradually; only by reaching the best can you be competitive.

This also explains why, in its best years for performance, he chose the most conservative growth guidance.

Over the past few years, Pop Mart has indeed looked like a racecar sprinting wildly along the F1 track. In 2025, overseas business revenue surged 291.9% year over year, and the Americas market grew even more—up 748.4% (about 7.5x).

With such high growth rates, the consumption of resources by the organization is enormous.

“Hope 2026 is a year to get into the pit stop.” Behind this line from Wang Ning is the meaning that this company, which has experienced the pains of high-speed expansion, chooses to proactively slow down, conduct organizational adjustments, and polish the fine details of global operations.

In Because Unique, multiple investors describe Wang Ning as “steady in personality, not very talkative, with emotions not shown on the surface, and possessing many excellent qualities common to consumer-industry entrepreneurs.” And unlike many internet startup founders, Wang Ning rarely talks about “disruption”—he places more emphasis on “operations.”

As the book says, Pop Mart is the result of “respecting time” and “respecting operations.”

Proactively slow down to build a thicker “moat”

In the final part of Because Unique, Wang Ning attributes Pop Mart’s success to two bigger backdrops: “strength” in Made in China and “scale” in the Chinese market.

In an interview, he said: “China has entered a 2.0 stage of dividend. Reform and opening up gave us two weapons: one is Chinese manufacturing, and the other is the Chinese market. Chinese manufacturing has been tempered by global markets and is already mature. It can produce products of world-class quality.”

This is a point that many people discussing Pop Mart tend to overlook.

LABUBU’s ability to become a world-class IP is not only because of design, but also because China’s supply chain turns artists’ wild ideas into high value-for-money, tangible products.

In a CCTV interview, Wang Ning proposed the idea of “From the world To the world.” He believes that you don’t need to rely on traditional elements to go global. Only “world-class design language combined with China-level manufacturing capability” can be widely accepted.

Now, when Pop Mart sells LABUBU in front of Egypt’s pyramids and beneath Paris’s Eiffel Tower, what it exports is not just pop toys, but a model of “emotional consumption” defined by Chinese companies.

Finally, we return to the question that terrifies the capital market: if there were no LABUBU, what would Pop Mart do?

Actually, the most valuable part of Pop Mart’s story isn’t how it manufactures a blockbuster. It’s how, even after the blockbuster, it continues to maintain reverence for “operations.”

In the latest earnings call, Wang Ning also answered the question with data.

He said Pop Mart is an IP commercialization platform. Even if you remove all LABUBU performance, the company still grows quickly. In 2025, besides LABUBU, the revenue of six major IPs—SKULLPANDA, CRYBABY, MOLLY, DIMOO, Star Star people, and others—each exceeded RMB 2 billion, and 17 IPs had annual revenue exceeding RMB 100 million.

Right now, one thing can be confirmed: Pop Mart choosing to actively steer into the “pit stop” isn’t about quitting the race. It’s about checking the engine, changing the tires, and preparing for the next longer stretch of the track.

Because Unique: Wang Ning, Pop Mart’s Founder, from a Corner Store to the IP World

Li Xiang / Author

CITIC Publishing House