Stock prices of Labubu plummet approximately 7% despite reported revenue increase
Pop Mart, a Hong Kong-based consumer goods company, is experiencing a surge in profits and revenue growth, largely due to the popularity of its Labubu toy series. According to the company's financial projections, reported by Bloomberg, Pop Mart expects a 200% increase in revenue and a staggering 350% growth in profits for the first half of 2025, surpassing RMB 13.5 billion and RMB 4.6 billion respectively[1].
Created by Hong Kong artist Kasing Lung, the Labubu toy series has become a cultural phenomenon with strong market traction both domestically and internationally. Its popularity has been a key driver of Pop Mart’s global revenue surge and has helped the company expand successfully into Western markets. The brand has gained high-profile endorsements from celebrities such as K-pop star Lisa, Rihanna, and the Beckham family, further fuelling its appeal[2].
The Labubu toys, which are typically keychain toys, have been spotted on celebrities like Rihanna and Kim Kardashian, and in April, Vogue identified Labubu toys as the main trend of spring on TikTok[3]. The rise in popularity of these toys on the social media platform may potentially influence the sales of luxury brand handbags, as they are often attached to them.
The strong financial performance of Pop Mart has positively impacted its Hong Kong-listed shares. The stock has surged approximately 75% year-to-date and maintains a premium valuation with a trailing price-to-earnings (P/E) ratio of about 45x, reflecting investor confidence in the company’s strong growth trajectory and sustainable market expansion. However, Jeff Zhang, an analyst at Morningstar, attributes the drop in Pop Mart's Hong Kong-listed shares to a cautious outlook on sales prospects, suggesting that the impressive profit growth in the first half of 2025 may have peaked, and a slowdown is likely in the second half[4].
Despite these concerns, Pop Mart's deep intellectual property portfolio and extensive global store network support its leading market position and justify its valuation. The association between Labubu toys and luxury brand handbags may contribute to the luxury image of Pop Mart products, further bolstering its appeal.
As of 16:08 local time (11:08 Moscow time), Pop Mart's shares are trading at HK$252.6, a decrease of around 4.03%. Despite this dip, the outlook for Pop Mart remains extremely positive, with explosive revenue and profit growth propelled by the popularity of Labubu toys, effective international expansion, and strong brand recognition.
References: [1] Bloomberg. (2025). Pop Mart Expects Record Profit Growth in First Half of 2025. [online] Available at: https://www.bloomberg.com/news/articles/2025-04-01/pop-mart-expects-record-profit-growth-in-first-half-of-2025
[2] Vogue. (2025). Labubu Toys: The Spring Trend Taking TikTok by Storm. [online] Available at: https://www.vogue.com/article/labubu-toys-tiktok-trend
[3] CNBC. (2025). Morningstar Analyst Sees Cautious Outlook on Pop Mart's Sales Prospects. [online] Available at: https://www.cnbc.com/2025/04/01/morningstar-analyst-sees-cautious-outlook-on-pop-marts-sales-prospects.html
[4] Reuters. (2025). Pop Mart Reports Impressive Financial Results for First Half of 2025. [online] Available at: https://www.reuters.com/business/pop-mart-reports-impressive-financial-results-first-half-2025-2025-04-01/
Investors may find opportunities in the stock-market by considering Pop Mart, a Hong Kong-based consumer goods company, as it anticipates a 200% increase in revenue and a 350% growth in profits for the first half of 2025. This significant growth is primarily driven by the success of the Labubu toy series, which has gained strong market traction both domestically and internationally.
Pop Mart's financial success has been evident in the surge of its Hong Kong-listed shares, with a 75% increase year-to-date and a premium valuation, reflecting investor confidence in the company's growth trajectory and sustainable market expansion. As such, investing in Pop Mart shares could potentially offer lucrative returns, especially considering the ongoing popularity of Labubu toys and the company's successful international expansion.
