LABUBU has been a global bestseller for half a year, has POP MART reached an emotional turning point?

POP MART (9992.HK) reported its first-half performance as expected, "exploding."

Revenue growth is expected to be no less than 200%; after deducting changes in the fair value of financial instruments, profit growth is expected to be no less than 350%.

Based on this calculation, POP MART's revenue in the first half of 2025 is expected to exceed 13.7 billion yuan, with net profit exceeding 4.5 billion yuan, both surpassing the total levels for the entire year of 2024.

Diversification of categories and an increase in overseas revenue proportion, combined with economies of scale, are significantly optimizing POP MART's profitability.

Institutions predict that the adjusted net profit margin for the first half will exceed 30%, a substantial increase from 22% in the same period last year.

However, the market seems to have anticipated this expectation in advance.

As a benchmark stock in the new consumption sector, POP MART's stock price has repeatedly hit historical highs since the beginning of the year, with an increase of 1.8 times.

JP Morgan believes that although the company's performance has significantly exceeded the consensus expectations of sell-side analysts by over 50%, it is only close to the lower limit of the buy-side expectation range (4.5-5.5 billion yuan).

Goldman Sachs also pointed out that despite the performance showing strong growth momentum and robust profit margin expansion, the actual performance only roughly aligns with its optimistic expectations, given that buy-side expectations have been significantly revised upward.

The day after the forecast was released, POP MART's stock price fell by over 4%.

Trendy toy IPs have their own life cycles, and LABUBU's current popularity will inevitably face a downturn in the future. At that time, how the high expectations stirred up in the secondary market and the cooling attention of the Hong Kong stock market will unfold remains uncertain.

Now at its peak, how will POP MART plan for its future?

LABUBU "Cooling Down"

The popularity of LABUBU and the vinyl plush series products is a key reason supporting POP MART's current market performance.

Since the launch of the LABUBU vinyl plush 3.0 series at the end of April, it has sparked a queuing craze worldwide.

In the secondary market, this doll is priced at more than twice its original selling price of 99 yuan.

The heat has even spread to other products in the LABUBU series, with offline store products once being sold out universally. A mint condition first-generation LABUBU sold for over a million at the Yongle auction.

It seems that POP MART is actively trying to burst the bubble.

It has successively stopped selling LABUBU series products in offline stores in multiple countries, including the UK, France, Japan, and South Korea, and released large-scale pre-sale orders in mid-June, leading to a subsequent drop in secondary market prices.

The market believes that this move helps alleviate the excessive consumption of IP value caused by supply tightness and the proliferation of counterfeit goods.

However, the scarcity of supply is not solely due to scalpers hoarding, but is also related to POP MART's own production capacity bottlenecks.

The domestic vinyl plush toy supply chain has reached a certain level of maturity.

One piece of evidence is that since the beginning of the year, many trendy toy brands, including TOPTOY, Finding Unicorn, TNT, 52toys, and Letsvan, have launched vinyl plush products under their IPs.

This inevitably raises questions in the market about POP MART's "artificially creating scarcity."

POP MART's founder Wang Ning once mentioned a "70% full" supply strategy.

This means that the actual production volume of the company is about 70% of market demand, with subsequent orders added based on market feedback POP MART adopts an OEM cooperation model for production, with its core factories almost exclusively dedicated to supply.

However, the popularity of LABUBU vinyl plush seems to repeatedly exceed production capacity planning.

At the April 2025 financial report meeting, POP MART admitted that production capacity had surged from an average of 300,000 units per month at the beginning of 2024 to 10 million units, stating that the current expansion curve "far exceeds the operational experience of normal enterprises."

Recently, in response to the global shortage phenomenon, the company once again explained: "The imbalance of demand far exceeding production capacity expectations is not an isolated event, but a continuous occurrence of forecasting deviations—whenever we believe we have reached the 'demand ceiling,' the market always refreshes expectations."

Correspondingly, POP MART is still accelerating the expansion of its vinyl plush product matrix.

In addition to LABUBU, IPs such as SKULLPANDA, CRYBABY, and Star People have also launched vinyl plush products.

If production capacity is overly concentrated on a single hit product, it may crowd out resources from other IPs and disrupt the overall development rhythm.

Moderately expanding the product line can help "cool down" the current scarcity halo of the LABUBU series.

However, according to Yang Aili, chief analyst of media at CITIC Construction Investment Securities, LABUBU vinyl plush is expected to become another evergreen product series for POP MART following "Molly's Day" and the SKULLPANDA temperature series.

Compared to most trendy toys in the industry that maintain a popularity cycle of about six months, the aforementioned two products have been bestsellers for over 30 months.

Based on this, Yang Aili believes that LABUBU 3.0, after the capacity ramp-up period, still possesses significant cross-cycle long-tail potential.

Ambition and Balance

Behind the impact of LABUBU's "massive traffic," POP MART still needs to seek a balance between IP value, scarcity, and scale revenue.

According to Wang Ning, the greatest advantage of the IP industry is its high extensibility, with many industries that can be linked. The real value of POP MART lies in the value of the IP industry.

This requires the company to continuously create good IPs and operate them meticulously, while making wise strategic choices during monetization.

In 2024, POP MART first disclosed its financial report by breaking down four major categories: figurines, plush toys, MEGA, and derivatives, revealing more of its ambitions in category expansion.

The monetization paths for IP include two methods: licensing and product sales.

For example, the core business model of IP copyright holders like Sanrio is image licensing. This model, leveraging light asset advantages, can quickly expand product lines and enhance IP market visibility, allowing the company to focus more energy on IP operations.

In the early stages, POP MART emphasized shaping and enriching IP expressiveness through external collaborations.

For instance, it collaborated with luxury brands like Moncler, BALMAIN, and Lamborghini, and engaged with trend-oriented brands like CLOT and VANS.

As the overall scale grows, billion-level core IPs have begun to penetrate high-frequency mass consumption scenarios through licensing collaborations in recent years.

For example, CRYBABY with if Coconut Water, Little Sweet Pea with Lays Potato Chips, and MOLLY and DIMOO with Chow Tai Fook gold beads, among a series of collaborations However, POP MART still maintains a relatively cautious attitude towards IP licensing.

In 2024, the revenue from external IP licensing business was only 567 million yuan, with the proportion of total revenue dropping from 6.8% in the same period of 2023 to 4.5%.

Liu Wenzheng, an analyst at Huaxi Securities, believes that the monetization methods of IP are related to fan demographics, IP attributes, and the development stage of the IP.

In the short term, POP MART's strict control over the design end and its direct sales model help to create a distinct style and maintain scarcity, accelerating brand awareness establishment.

While preventing the over-exploitation of IP asset value, POP MART also aims to maximize long-term benefits by controlling the core profits of high-value segments.

Since the beginning of this year, POP MART has strengthened its innovation in categories that are non-standardized, highly customized, and have significant premium space.

In February, POP MART opened a flagship store for the emotional IP "Hirono Xiaoye," introducing a large number of home and lifestyle SKUs; the clothing categories sold in the store extended from commonly seen co-branded T-shirts and sweatshirts to jackets, sweaters, and cotton clothing.

Four months later, it opened two more POPOP stores in Beijing and Shanghai, primarily selling silver jewelry priced between 500 yuan and 1300 yuan, and there were also reports of talent recruitment in the home appliance sector.

POP MART is promoting more content projects, further enriching content settings and the IP worldview through the upcoming LABUBU animation and the expansion of offline parks.

These actions are aimed at consolidating IP competitiveness rather than seeking quick monetization.

The "post-LABUBU" era has not yet arrived, but POP MART has already made its move