Performance myth encounters stock price pullback: The misalignment and truth of POP MART (09992)

In March 2026, POP MART presented an almost impeccable report card: revenue exceeded 37.1 billion yuan, a year-on-year increase of over 180%; net profit attributable to the parent reached 12.78 billion yuan, with an increase of over 300%. Whether in terms of scale or profitability, this redefines the industry's ceiling. However, the market's reaction was unexpected. After the financial report was released, the stock price did not rise but fell, creating a drastic deviation between performance and stock price, turning the company from a "growth myth" into the focus of "valuation controversy". This was not just a simple emotional fluctuation, but a typical cognitive dissonance: while the company was still accelerating, capital began to slow down prematurely. To understand all this, we need to shift our focus from surface numbers to deeper structures and expectations. Facing irrational selling, POP MART's management demonstrated strong confidence in the correct valuation through "gold and silver" capital allocation. It is understood that within the five trading days after the financial report was released, POP MART conducted intensive large-scale share repurchases. As of the time of writing, the company had repurchased nearly 1.3 billion Hong Kong dollars. This protective action in the severely undervalued range of the stock price is the management's most powerful declaration of the company's true value, sending a clear signal to the market: even if capital sentiment fluctuates, the company's intrinsic growth logic remains strong. In 2025, what was the true performance? Looking at the real value of financial data, POP MART's performance in 2025 can be described as achieving "Davis double-click" in profitability. This structural optimization was not accidental, but stemmed from a qualitative change in the supply chain. On one hand, the refined management of the supply chain is unlocking dividends. By implementing more accurate production scheduling mechanisms and AI-assisted decision-making, the company significantly reduced inventory redundancy and production losses, leading to a substantial increase in the efficiency of resource utilization. On the other hand, expanding into overseas markets has brought higher premium space, strengthening the company's pricing ability. More importantly, operating leverage is beginning to show. In 2025, the profit growth rate was significantly higher than the revenue growth rate, indicating that the company had crossed the critical point of "scale costs" and entered a new phase of "efficiency-driven" operation. In simple terms, the same investment now returns more profit. Furthermore, in terms of IP asset layout, it was learned that POP MART successfully broke the market's previous skepticism about its over-reliance on a single top IP, establishing a strong, multi-level IP matrix. Among these, LABUBU achieved a phenomenal global outbreak in 2025, with a single IP contributing revenue of up to 14.16 billion yuan, accounting for 38.1%. This is not just a commercial miracle, but also signifies that POP MART has the ability to continuously operate and promote a classic IP into the mainstream global cultural vision. At the same time, veteran IPs like SKULLPANDA and DIMOO did not show signs of fatigue, but instead achieved growth beyond expectations in their second awakening, with almost all of them achieving triple-digit growth rates, and the growth rate of the new IP STAR STAR reaching as high as 1602%. This vitality, which crosses cycles in different cultural contexts, proves that their products are not just short-term fast-moving consumer goods, but cultural symbols with deep emotional connections. The underlying logic of stock price fluctuations Since the fundamentals are so strong, why did the market choose to exit at this time? The answer does not lie within the company itself, but within the market's own dynamics. Firstly, there was an excessive anticipation. During the past year's rise, the market had already priced in a lot of optimism. When some funds raised growth expectations to extreme levels, even if the company delivered excellent results, it would be difficult to bring new surprises. When there is a gap between actual data and "better than imagined," an adjustment is triggered. This phenomenon is particularly evident in institution-dominated markets. For these funds, "good" is not a buying reason - "better than expected" is. However, when expectations spiral out of control, any reality will seem less than ideal. Secondly, there is behavior differentiation due to fund characteristics. After a significant rise in stock price over a year, the release of financial reports becomes a natural cashing-out point. Some foreign funds focus more on short-term returns and risk balance, and locking in profits is a rational choice when valuations are high. The concentrated actions of these funds can amplify fluctuations in the short term, but do not necessarily reflect a change in fundamentals. Thirdly, there is a fundamental disagreement about the industry's attributes. There is still a considerable number of views in the market that see trendy play as having a short lifecycle and high volatility. Under this cognitive framework, LABUBU's success seems more like a random event rather than a showcase of its capabilities. Therefore, any change in the growth pace is easily interpreted as a "peak signal." But if we change our perspective and understand POP MART as an IP platform, the logical basis for these concerns will be shaken. The core of the platform lies in continuous production and amplification of value, rather than relying on a single explosive product. As long as the IP matrix continues to expand and operational capabilities strengthen, its growth has inherent momentum. Furthermore, the market has not fully adapted to this "new species." It is neither as stable as traditional consumer companies nor as reliant on traffic as internet platforms. It falls somewhere in between, with both content and consumer attributes. This complexity makes short-term pricing deviations easy to occur. Lastly, there is a factor that has been overlooked: the company actively "cooling down." During high-growth stages, POP MART did not blindly pursue scale but controlled the pace, including adjusting inventory, stabilizing price systems, and slowing down the release of some IPs. This strategy may impact growth in the short term, but in the long run, it aims to extend the IP lifecycle and avoid prematurely exhausting market enthusiasm. In other words, some "slowing down" is not a sign of weakening demand but a result of proactive management. While this behavior may be seen as a risk in the eyes of short-term funds, from a long-term perspective, it is a sign of maturity. The steadfastness of long-termism and the global landscape: POP MART's moat In the face of short-term fluctuations, a mature assessment should focus on the invisible assets and strategic layout that will determine the company's fate in the next three to five years. The most valuable proportion in the 2025 financial report was the increase in overseas revenue to 43.8%, marking a shift in the company's internationalization strategy from "going global" to "localized operations." Particularly in the American and European markets, astonishing growth rates of 748.4% and 506.3% were achieved respectively, validating POP MART's business model's cross-cultural universality. Behind this stunning overseas performance, the domestic market "base" of POP MART also showed strong performance. In 2025, despite a high base, the mainland China business still achieved triple-digit growth, with revenue reaching 20.85 billion yuan, of which retail store annual revenue surpassed 10 billion yuan for the first time. The inherent channel advantage and operational logic of the Chinese market are now being continuously reused in global expansion. For example, the "blind box machine" model, which leads the online business in China, with strong new customer acquisition and IP lifecycle extension capabilities, has now successfully landed on official websites and apps in multiple countries overseas, driving the increase in overseas e-commerce revenue. Furthermore, through the implementation of localized organizational structures for different regions, POP MART is building an insurmountable competitive moat through "global operational capabilities." The management's repeated mention of "health" and "medium-long term" in the performance release conferences reveals their philosophy of "slow and fast." While the market crazily pursues extreme growth rates, the company is choosing to control the pace of IP releases, even through measures of intentionally restricting supply. This seemingly "anti-commercial" behavior is essentially trading short-term growth rates for the longevity of IP and the loyalty of fans. For speculators pursuing short-term gains, this may become a concern about growth weakness, but for those with a long-term perspective, this management will to restrain greed and maintain persistence is the real investment scripture to trust. Taking a more macroscopic view, POP MART is going through the ultimate leap from a "product company" to an "IP platform company." It is no longer just a toy retailer, but more of an ecosystem with strong incubation and traffic aggregation capabilities. Through the operation of offline parks and future development of film and television content, it is building a deep IP ecosystem, leading revenue structure towards diversification and high risk resilience. As a system with dozens of long-lasting IP matrices, it is gradually outlining the blueprint of an evergreen enterprise. Conclusion In the future, we need to accept that POP MART is entering a "new normal" of more stable growth. While a 184% growth is indeed exhilarating, as revenue base rises, pursuing "certainty" will be more valuable than pursuing "flexibility." For a multinational consumer brand with billions in annual revenue, the real strength comes from healthy inventory turnover, a large fan base with high repurchase rates, and a continuously evolving supply chain. The company's 2025 financial report proves that POP MART has become stronger in its rapid sprint. Recently, in discussions on social media, Duan Yongpin mentioned that retracting the promise not to invest in POP MART may be because he sees in POP MART the ability to cross cycles like Apple and NVIDIA. Investment is about the total future value, and a POP MART with a LABUBU "acceleration" will run further in a given time. Capital markets are inherently short-sighted and sensitive, and the pendulum of emotions always swings amidst extreme sensitivity. But for POP MART, short-term fluctuations are just a minor episode in a long journey. After the emotions settle, what truly matters is not whether growth is slowing down but whether the company is still building long-term capabilities. From this perspective, the answer is gradually becoming clear.