Mainland investors are deeply trapped in the "emotional maze" of POP MART

A new type of consumption model is simultaneously impacting the "emotions" of the public and fund managers.

During the New Year's holiday this year, investor Xiao Yu unexpectedly witnessed a long queue of enthusiastic local young people at a newly opened mall in the outskirts of Bangkok while traveling in Thailand.

"Is this a luxury goods store?"

In Xiao Yu's memory, luxury goods stores in Thailand seemed to only have "orderly queues": security guards in dark uniforms standing straight at the store entrance, registering each person in line with a notebook; the queue outside the store twisted around several corners, densely packed with people waiting to enter...

Upon entering, the answer was revealed: it turned out to be a newly opened POP MART concept store.

It seems that overnight, POP MART has rapidly gained popularity worldwide.

From Lisa to Rihanna to Beckham, more and more celebrities are showcasing the POP MART dolls they have acquired.

According to POP MART's annual report, by the end of 2024, the company's sales will have spread to more than 20 countries and regions worldwide. That year, overseas sales revenue exceeded domestic sales revenue, indicating that POP MART has become a large global entertainment company (with revenue exceeding 10 billion).

At the same time, investors in the market are continuously "increasing their bets" on POP MART, buying shares of this Hong Kong stock company as if they were scrambling to purchase popular dolls... Over the past year, POP MART's stock has surged nearly 300% (see chart below).

If calculated by market capitalization, as of the close on June 12, POP MART's market value was equivalent to HKD 358.3 billion (approximately RMB 32 billion), surpassing companies like Luxshare Precision, Hikvision, and Haiguang Information, and coming very close to consumer giants like Kweichow Moutai and Wuliangye.

Faced with unprecedented rapid growth and a global consumer market, professional fund managers find themselves caught in a huge "investment sentiment" contradiction.

Optimists firmly believe they see a representative company of the new generation of "emotional candy," estimating an unprecedented market value target for contemporary new consumption and the spiritual gap of "self-pleasure" demand.

Meanwhile, the cautious have long been bearish on the stock, predicting a historical peak (though none has appeared to date). From static valuation to company profitability, these cautious institutions have many reasons to support their own conclusions.

Clearly, POP MART not only stirs the "emotions" of the new generation of consumers but also "strikes a blow" to the "nerves" of this generation of investors.

"Investment Signals" on the Desk

The Baoyin Fund, founded by China's first generation of futures trader Wang Qiang, is one of the earliest hedge funds in China, with research teams located in Shanghai, Hong Kong, Tokyo, Singapore, and Mumbai Three years ago, a "coincidental" scene appeared in the office of this institution:

Several young employees placed POP MART blind box figurines on their desks.

This behavior was purely out of interest, and even employees over 40 joined the trend of "collecting."

After seeing this phenomenon—one that he found hard to understand—a fund manager began to systematically learn about this trendy toy company, including seeking sell-side research resources, community exploration, store monitoring, and social media tracking.

The answer quickly exceeded their expectations.

"Emotional Moutai"

According to this institution, before the "explosive IP" Labubu was launched, they had already noticed this "indescribable" trend. They also discovered that while Labubu was "lukewarm" in mainland China, it had already gained popularity in Southeast Asian countries.

In the view of BaoYin Fund, POP MART is not just a "toy company," but has built a "consumer universe" characterized by self-circulation and emotional drive.

BaoYin even provided a "portrait" of this investment target: emotional Moutai.

This judgment does not seem exaggerated in hindsight. Just this week, rumors circulated that "a financial institution is urgently seeking Labubu purchasing channels to retain 5 million deposits." There are many such "promotions."

At the beginning of 2024, POP MART's stock price was HKD 20 per share, but by the close on June 11, 2025, it had approached HKD 270 per share.

This surge is reminiscent of NVIDIA, and in the view of BaoYin Fund, the stock price is not the core issue; rather, "one should be alert to the quiet change in investment paradigms that is occurring."

However, how much did this hedge fund actually buy? Due to limited information, we cannot know.

"Zodiac Moutai" Reappearing?

Another large-cap private equity firm, seeing the POP MART phenomenon, instinctively recalled the 2015 craze for Moutai zodiac liquor.

At that time, the liquor industry was still in a deep adjustment period, and Moutai strictly controlled the production of the Year of the Sheep Moutai, making it the most scarce zodiac liquor. The collectible value of zodiac liquor was continuously amplified, with an issuance price of over 2,000 yuan, eventually being speculated to a price of 30,000 yuan, with annualized returns far exceeding many financial products.

For a time, zodiac liquor became hard currency. Now, POP MART also reflects this: recently, there have been travelers purchasing rare POP MART figurines overseas, which were temporarily detained by customs, increasing the market's perception, interpretation, and accumulation of "demand."

Too Many Institutions "Got On Too Late"

It is reported that another large private equity firm has "fully" participated in the market value growth of POP MART since the fourth quarter of 2024, allowing its severely retracted products to achieve net value recovery.

This institution admitted to ZhiShiTang: "We got on board too late, only starting to research after POP MART's performance exploded."

In fact, this "latecomer" institution had a strong cognitive inertia that led to significant losses over the past three years, as it overly bet on traditional consumer companies This inertia can be seen in many "public-to-private" fund managers, who have made liquor, home appliances, food and beverages, and pharmaceuticals the core of their consumer holdings. However, since 2021, the market style has moved away from these assets.

"Emotional Consumption"

The billion-yuan private equity that lamented "too late" further stated: After sorting through the previously undervalued Hong Kong stocks internally, they found that investment targets providing emotional value have higher gross margins, while the unit prices are also lower than similar entertainment toy consumer products.

"We found that the current consumer group is not simply upgrading or downgrading, but there is a shift in consumption. For example, people who like playing with LEGO puzzles are starting to switch to other toy brands," said this fund manager.

It is reported that at its peak, POP MART was not only the top holding of this institution but also accounted for nearly 20 percentage points of their holdings, meaning nearly one-fifth of their funds were directed towards this company.

One can imagine the significant "boost" to net value from the stock price increase.

This private equity also revealed that some of their peers still invest in consumption "inertia," as they are familiar with low valuations, but this no longer aligns with the new phenomenon.

The new phenomenon is that institutions that previously bet on some emerging consumer companies, after some companies' performance was disproven, naturally "shifted" their funds to companies like POP MART that have performance realization.

Some Still "Refuse to Participate"

Research by Zhitang found that very few stock private equities dare to openly participate in chasing rising stocks, but several institutions clearly stated they would not join this trend.

Xia Junjie (founder of Renqiao Asset), who specializes in low-valuation investments, recently pointed out:

"POP MART, Laopu Gold, and Mixue Ice City have become representatives of 'self-consumption.' Over the past year, their stock prices have risen significantly, but the new consumption overall is overheated, and stock prices show obvious bubbles. In fact, any bubble arises from undeniable rationality."

This fund manager further "forecasts" the path of this bubble bursting:

Weakness in consumer goods → Counter-cyclical growth of "self-consumption" companies → Various funds cherish this opportunity → Increased capital inflow → Fundamentals and stock prices mutually verify → Trend power emerges → Ultimately leads to bubble formation.

This evolutionary path almost replicates the capital chasing trend in the A-share new energy sector in 2021.

Another billion-yuan private equity bluntly stated that investing in POP MART contradicts their team's investment logic, and some funds have directly copied the previous A-share "board hitting" style to the Hong Kong consumer sector, similar to the speculative mentality of innovative drugs, distorting the risk-return ratio.

This debate may take a long time to reach a real conclusion.

(The investors mentioned in the article, such as Xiao Yu, are pseudonyms.)

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