Shares of popular Labubu doll maker Pop Mart touched record highs on Wednesday following strong earnings results which saw the company reporting a 400% jump in net profit in the first half.
The stock also got a boost from an upbeat guidance with the management saying it expected annual revenue to more than double to 30 billion yuan this year, equivalent to about US$4.18 billion.
Last year, it generated revenue of 13.04 billion yuan.
The share price jumped 13% in Hong Kong on Wednesday afternoon and past the HK$300 mark for the first time ever, setting up a record-high close.
Pop Mart’s gains stand at 243% so far this year, and it was last trading at HK$313.
The company reported revenue tripling to 13.88 billion yuan in the six months to June, with net profit up about 400% year-on-year.
Pop Mart projected a net profit margin of around 35% for the full year, compared with 25.4% in 2024, underscoring its growing profitability as it scales up globally.
Labubu craze fuels record revenue surge and global brand buzz
Pop Mart International has seen its fortunes swell owing to the popularity of the viral “ugly-cute” Labubu dolls which has seen soaring demand a shift toward higher-margin overseas markets.
The character has proven a windfall for the company.
In 2024, revenue more than doubled to 13.04 billion yuan ($1.81 billion), driven in large part by the popularity of the elfin monster.
Sales of plush toys skyrocketed over 1,200% during the year, making up nearly 22% of total revenue, the company’s annual report showed.
Celebrities including Blackpink’s Lisa and pop star Rihanna have been seen carrying the Labubu dolls, sparking a global frenzy for the blind-box toys, where each purchase remains a surprise until unboxed.
The viral popularity has catapulted Pop Mart’s market value past long-established rivals such as Barbie-maker Mattel and Hello Kitty’s parent Sanrio.
Expansion into animation and theme parks
Following the record results, Pop Mart executives struck an ambitious tone, saying they see opportunities for the company’s characters, including Labubu, to feature in animated films and theme park attractions.
While such ventures are unlikely to contribute significantly to revenue in the short term, the initiatives reflect Pop Mart’s vision to build a Disney-like empire around its intellectual properties.
The company also said it is exploring further geographic expansion, targeting emerging markets such as the Middle East, Central Europe, and Central and South America.
Executives noted that overseas demand is driving higher margins and creating stronger cross-sales across its product portfolio, including the Monsters collection.
Shares a buy or overpriced?
Shares of Pop Mart have surged more than 240% so far this year, making it one of the hottest stocks in Asia’s consumer sector.
The rally reflects growing investor confidence that the company can transform from a niche toy maker into a broad-based intellectual property operator.
“The stock will likely make new highs in the coming weeks,” said Hao Hong, managing partner and CIO of Lotus Asset Management.
He suggested that the sharp rise in shares could also be attributed to short-sellers rushing to cover their positions after unexpectedly bullish results, given the company’s relatively thin trading market.
Citi reiterated its “buy” rating, saying earnings came in better than expected.
The brokerage cited Pop Mart’s strong capability in intellectual property incubation and overseas expansion as key drivers of growth in the second half of the year.
Nomura analysts said Pop Mart’s success in leveraging the Monsters collection to drive cross-sales of other series has brought the company closer to becoming a fully integrated IP operator.
They highlighted potential catalysts such as new sales guidance, pipeline updates in the second half, and possible inclusion in the Hang Seng Index.
Nomura maintained a “buy” rating and a target price of HK$330.
Morningstar’s Jeff Zhang, however, warned that valuations may have run ahead of fundamentals. “We expect more restocking of existing series and the launch of new editions to drive earnings expansion in the second half. That said, shares likely remain overpriced as investors are overlooking the high business risk in the long run,” he said.
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