Net profit soars by 308%! Market value evaporates by 78 billion, Bubble Mart's "overseas expansion story" is no longer attractive

Pop Mart’s overseas expansion dividend has reached an inflection point and is coming to a phased end.

The story of overseas expansion is no longer as glamorous. Market preferences have begun to shift, and what will continue to support Pop Mart’s valuation in the future will only be the steady delivery of performance.

Three to four years ago, due to an industry crisis caused by setbacks in the development of the blind box sector, Pop Mart’s performance began to stagnate. A massive selloff in the capital markets caused the company’s stock price to drop by as much as 80% at one point.

A media outlet once commented that Pop Mart built from 0 into a “trending toy empire” worth HK$150 billion in 10 years. And falling from HK$150 billion to a market cap of less than HK$30 billion took only 1.5 years.

Facing a situation of troubles both at home and abroad, Wang Ning made a number of attempts at the time.

In the end, the breakthrough answer he came up with was—“overseas expansion.”

In 2023, during the company’s earnings briefing, Wang Ning said with satisfaction: “This year we expect overseas revenue to reach 1 billion yuan. Next year, we are confident that our overseas business will exceed the total revenue from before 2019 at the time of the company’s IPO, meaning we are essentially recreating another Pop Mart.”

Thus, “recreating Pop Mart overseas” became Pop Mart’s new story to tell the capital markets—also a fresh growth point widely recognized by the capital markets that could help the company “break out.”

In the era of big consumer spending, the overseas expansion dividend ultimately saved Pop Mart. The overseas expansion concept not only reversed the company’s weakening performance trend, but also boosted its stock price. Other companies that also benefited from this round of dividend include Miniso and similar businesses.

Entering 2024, Pop Mart’s performance began to improve significantly, even showing a trend of explosive growth. The financial report shows that in 2024, Pop Mart’s revenue exceeded 10 billion yuan, reaching 13.038 billion yuan. Net profit reached 3.125 billion yuan. When the room for performance expectations was opened up, the market’s room for valuing the company had no upper limit.

According to data statistics, from the beginning of 2024 to August 2025, Pop Mart’s stock price saw its highest increase exceed 2,100%, and its market cap at one point surpassed HK$450 billion. The surge in the stock price made Pop Mart’s actual controlling shareholder, Wang Ning, the biggest beneficiary. At its peak, Wang Ning’s personal net worth exceeded RMB 165 billion, making him Henan’s newly minted richest person.

The successful breakout in overseas markets, combined with the surge in market capitalization, gave Pop Mart’s globalization story sufficient room for imagination for the capital markets.

But valuations ultimately need performance to be realized in order to hold and be兑现. A shift in market investment preferences and a turn in global capital’s winds also brought this valuation game into its final stage. When “the overseas expansion story” is no longer “sexy,” and performance is concentrated and delivered, it will accelerate investors’ exits.

On March 25, Pop Mart disclosed its 2025 financial results. The report showed that for the full year 2025, the company achieved revenue of 37.12 billion yuan, up 184.7% year over year. It is reported that this was the company’s first time exceeding the 30 billion yuan revenue threshold. Adjusted net profit was 13.08 billion yuan, up 284.5% year over year; net profit attributable to shareholders was 12.776 billion yuan, up 308.8% year over year; gross margin was 72.1%, compared with 66.8% in the same period last year. Multiple key indicators hit historical highs.

Looking at the breakdown, in 2025, Pop Mart had a total of 17 artist IPs whose revenue exceeded 100 million yuan. Among them, the THE MONSTERS series under Labubu generated 14.16 billion yuan as the absolute core, up 365.7% year over year, accounting for as much as 38.1% of total revenue. In addition, SKULLPANDA, CRYBABY, MOLLY, DIMOO, the Star People, and HIRONO achieved revenues of 3.54 billion yuan, 2.929 billion yuan, 2.897 billion yuan, 2.777 billion yuan, 2.056 billion yuan, and 1.735 billion yuan, respectively, during the reporting period.

From a regional market perspective, in 2025, the Americas delivered the strongest performance, with revenue up 748.4% year over year. Europe and other regions grew 506.3%, while Asia-Pacific and Mainland China grew 157.6% and 134.6%, respectively.

As of the end of 2025, Pop Mart had 630 global stores in total, with a net increase of 109 stores for the full year. It operated 2,637 robotic stores, with a net increase of 165 robotic stores for the year. And it opened its first batch of offline stores in Germany, Denmark, Canada, and the Philippines.

However, despite this highly explosive set of financial results, the market did not respond positively—instead, it was met with a bucket of cold water.

After trading opened on the afternoon of March 25, Pop Mart’s stock price plunged sharply, with an intraday drop of 22.51%. On March 26, Pop Mart’s stock price did not stop falling, but continued to dive further; by the close, the decline exceeded 10%. Combined over the two days, the total stock price drop exceeded 30%. Total trading value was HK$39.8 billion. The company’s market cap had cumulatively evaporated by more than HK$89.1 billion, which is about RMB 78.6 billion.

So why, after Pop Mart’s performance achieved explosive realization, did the capital markets still not buy it?

Some analysts believe the main reason is that the Labubu series was simply too hot—so hot that it overshadowed all other IPs. The market is worried that if Labubu’s hype cools down, the company may face a huge growth gap. After all, the hype cycle of trending toy IPs is typically 3 to 5 years. Even an iconic IP like MOLLY still needs continuous iteration to sustain its vitality.

Jankan Finance believes the core reason is that the capital boom wind for overseas expansion has passed. The “overseas expansion story” is no longer as “sexy,” so its appeal to the capital markets naturally weakens. In addition, with AI becoming a global-level epic wind, capital’s attention to the trending toys sector naturally declines.

Also, since 2024, Pop Mart’s stock price has already accumulated a huge amount of gains. It has now entered a phase of capital兑现. The most typical signal is that from late April to early May 2025, Pop Mart’s key investor, Fengqiao Capital, carried out a clearance-style reduction in its holdings. According to available information, at that time, Fengqiao Capital sold a total of approximately 11.91 million shares of Pop Mart, raising cash of HK$2.264 billion in total, or about RMB 211 million.

After the clearance sale was completed, Fengqiao Capital’s member, Tizheng, also posted a message expressing thanks. Meanwhile, the #泡泡玛特股份被创始股东高位清仓# topic also made it onto the hot search list.

Looking back, all the stories the capital markets tell ultimately move into the performance-兑现 stage.

In late August 2025, Pop Mart’s stock price began to fall. Because the decline was large, Pop Mart also made it onto the hot search list at the time. Faced with the dense overseas capital’s bearish stance, Pop Mart used its standout performance to deliver a strong counterattack.

But it is worth noting that Pop Mart’s previous high valuation was built on the premise that the “overseas expansion story” still had appeal. Jankan Finance believes that as the complexity of managing overseas markets increases, the overseas expansion strategy is no longer a universal solution for breaking the deadlock.

Therefore, the gradual deflation and clearing of the valuation bubble is an inevitable choice for the market. Jankan Finance expects that as explosive growth in overseas markets gradually stabilizes, Pop Mart’s performance growth rate will also decline accordingly.

At this earnings briefing, Pop Mart’s Chairman and CEO, Wang Ning, said that in 2026 the company will work to achieve a performance growth rate of no less than 20%.

Comparing with the doubled performance growth rate in 2025, the guidance Wang Ning provided does lead the market to form a more pessimistic outlook.

Morgan Stanley previously released a research report stating that Pop Mart is transitioning from the “explosive growth” stage of the past two years into a future “sustainable growth” stage.

Based on the current market conditions, a slowdown in overseas performance growth is likely to happen. Some foreign-invested institutions even predict that in 2026, Pop Mart’s revenue in both the domestic and overseas markets will decline.

Pop Mart’s Chief Growth Officer, Wen De, said at the earnings briefing that in 2025, overseas business accounts for nearly 50% of the company’s revenue. In the future, the company will focus on developing tourism locations and flagship store projects. Pop Mart will strengthen refined operations, implementing a “dual-track” global and group-based strategy centered on IP, while focusing on developing the South Asia, Europe, and South America markets.

Jankan Finance believes that in 2025, the Labubu family’s products account for 38.1% of revenue. With such a high concentration of revenue, once the performance of this series begins to decline, the impact on the company’s overall performance will be huge. Therefore, the market’s concerns are not without reason.

At the earnings briefing, Wang Ning also said that Labubu’s popularity indeed drove the development of the whole company, but Pop Mart is not only supported by this one core IP, Labubu. Even if all Labubu performance is excluded, the company still achieved rapid growth. He hopes the outside world will see more of Pop Mart’s ability to operate IPs, and he believes the company’s IP operating experience will become increasingly mature.

In response, Jankan Finance believes that once Labubu’s hype declines and overseas business growth slows down, the market will reassess Pop Mart’s valuation. Judging from the current market reaction, the answer is already very clear.

CITIC Securities released a research report stating that because blockbuster IPs have a high degree of uncertainty, simply relying on a single blockbuster to add performance makes it difficult to achieve a higher valuation. The certainty of IP investment lies in users. The user base is the foundation for platform enterprises to monetize their business, and it is also the core starting point for a platform enterprise’s valuation.

From this perspective, when the capital dividend of the “overseas expansion story” comes to an end, the valuation bubble needs to be gradually absorbed through performance. In the future, as Pop Mart’s globalization process continues to deepen, relying on solid performance support for valuation will be more reliable than simply “telling capital stories.” Therefore, this sharp decline in the stock price for Pop Mart is both a challenge and a necessary path for the company to strengthen its development fundamentals.

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