Pop Mart and Moutai, who do you think is more promising?

Pop Mart and Moutai, both have experienced significant pullbacks, and both have recommendations from Yongping Duan. Recently, they are often discussed together. Many people say, Pop Mart also has the right to compare with Moutai? What I want to say is, you might not understand Pop Mart, and you may not fully understand Moutai either.

On the surface, Pop Mart is a new brand, and when it comes to moat, it seems unworthy to compare to Moutai. Because Moutai is a symbol; in some scenarios, it is a necessity. It doesn’t need to do anything extra, just produce, and it can make this much money every year. Meanwhile, Pop Mart is a high-maintenance type, meaning I need to constantly sign new artists, release new IPs, and be able to follow up with a previous IP that has lost its heat—that kind of uncertainty doesn’t look very stable.

So, when Moutai’s P/E ratio drops, many dare to bet. They think, “High-dividend stocks with lower P/E ratios, dividend yields become attractive. At worst, over 10 or 20 years, I can steadily collect dividends. Where can I find such a good financial product?” But when Pop Mart’s P/E ratio drops, they don’t dare to bet because it’s not “stable enough.”

But is Moutai really stable? Past experience doesn’t guarantee the future. The rise in dividend yield depends on Moutai still earning that much money each year. What if it can’t anymore? Then the current P/E ratio doesn’t tell us anything because what you see as “cheap” is fake. The biggest problem Moutai faces is the shrinking of the entire baijiu market on the consumer end, and the contraction of its “necessity scenarios”—this isn’t its problem but a macroeconomic issue, a change in social cooperation patterns. Its seemingly bottomless moat makes its decline slower than other baijiu brands, but the trend is the trend.

And as a “financial product,” the biggest danger is “not preserving value,” because then the originally locked liquidity will be released, and it can’t maintain the high premium when liquidity was locked. Even if that liquidity doesn’t enter the market but is consumed internally, it only looks like it can hold up for a while, but in fact, it has already overdrafted the potential future consumption scenarios of its customer base—this is like eating tomorrow’s grain today, useless, and that’s why I say, “It looks cheap now, but when it’s no longer profitable in the future, this cheapness is fake.”

Many also misjudge Pop Mart’s moat.

Pop Mart needs continuous investment in developing new IPs, which is correct; whether it can produce Labbubu again, which is uncertain, is also correct. But many people don’t realize three points:

First, macro conditions are very unfriendly to Moutai but very friendly to Pop Mart. The overall baijiu consumption scene is shrinking, while trendy toys are the opposite.

Second, Pop Mart’s long-tail effect is very strong. Whether it’s Molly, Labubu, or other flagship IPs, even if social discussion decreases, they still sell steadily for many years and continue to grow. That means, it’s not that the company is doomed because new blockbusters can’t generate high heat; old IPs or what many consider “over-the-hill IPs” are also growing in sales.

Third, you might think it relies on luck to produce super IPs like Labubu, hoping for a star to boost it, or that the image must be liked by many people? Actually not. It has already mastered a set of industrialized aesthetic-leading processes, such as distributed testing, warming up IPs with good data, and finally channeling resources into a racing mechanism to produce IP winners, packaging them with a bunch of peripherals and stories, creating hype, leading social topics, and so on.

Honestly, do you really think Labubu, this sharp-toothed monster, looks good? When I first saw it, I thought, what is this thing? But once Labubu’s data is out, it can use ubiquitous social topics to make you feel that if you don’t discuss it or don’t have an aesthetic appreciation for it, you’re falling behind. Your aesthetic standards are outdated, and you haven’t seriously understood the story behind it. That’s the power of creating viral hits. I even spent over ten thousand yuan on Labubu. Now looking at these, I think they’re quite beautiful—beauty and ugliness aren’t subjective qualities you own, but social influence projections, stories, societal judgments, emotional values, what your friends say, how you want to fit into the environment. Your standards of beauty and ugliness are shaped by society. E.g., Edison Chen, Louis Koo, Daniel Wu, Leehom Wang—where’s the handsomeness? Tell me, where? Why? The sharp lines, facial symmetry, proportions, facial folds, small head, big head, narrow face, wide face—even body weight—these are standards society imposes on you, not your subjective aesthetic.

Pop Mart can lead your judgment of beauty and ugliness—shoot first, aim later—rather than constantly testing whether it can luck into a bullseye next time. Don’t argue, don’t say “I just don’t think Labubu looks good,” such low-IQ comments. Pop Mart’s success doesn’t need your contribution; influencing a large part of people is enough. It’s about macro data. Whether you’re involved or not, no one cares. You might not be led by Pop Mart, but influenced by other social narratives—it's the same.

All this isn’t to tell you to rush to support one side now, but to illustrate a principle: when analyzing companies and moats, you can’t stay at the surface level data or rely solely on past experience. You may not follow all companies, like the ones mentioned today—Pop Mart and Moutai—and that’s okay. But for the companies and products you do care about, you must have enough in-depth analysis skills. Don’t act impulsively; if you bet and the short-term price performance isn’t good, you might regret it immediately, feeling like you’ve been “cut” by this or that. Who can really cut you? It’s your own ignorance—you don’t understand, see through, or choose correctly. That’s how the market works. If you don’t win, others will win you.