Pop Mart's Shares Decline After Morgan Stanley Drops Stock from Focus List
Shares of Pop Mart, the Chinese toy company behind the wildly popular Labubu collectible series, continued their decline on Friday. The company’s stock, listed in Hong Kong, dropped over 5%, extending a slide from the previous session where it lost 5.3%. This marks the stock’s first negative week since early May, registering a cumulative loss exceeding 13%. Despite this setback, Pop Mart still sports remarkable year-to-date gains of more than 160%.
Morgan Stanley’s Shift in Focus
Late Wednesday, investment bank Morgan Stanley announced it was removing Pop Mart from its China and Hong Kong focus list, replacing it with an insurance firm. The bank has not elaborated on its decision. Interestingly, just days earlier on June 10, Morgan Stanley had upgraded Pop Mart’s price target significantly — from 224 to 302 Hong Kong dollars (~$38.47 USD) — signaling confidence in the company’s long-term growth potential.
Analysts noted that while Pop Mart's rapid growth in 2025 seems fully priced in, market conviction about sustained long-term performance remains mixed. The elevated valuation suggests the impressive momentum might not continue through upcoming quarters.
Pop Mart’s Market Surge and International Expansion
The Beijing-based toy giant, which rose to fame with its innovative “blind box” concept, has aggressively expanded overseas through online platforms and physical stores in regions including the United States and the United Kingdom. These blind boxes, usually priced between $5 and $10, offer buyers the thrill of discovering rare collectible figurines, fueling a massive craze.
The Phenomenon of the Labubu Collection
Among Pop Mart’s most notable successes is the Labubu line, featuring an elf-like character that recently took the global market by storm. The craze has captured not just toy enthusiasts but also audiences in fashion and pop culture circles worldwide. To meet soaring demand, Pop Mart has diversified Labubu merchandise to include plush toys, pillows, and related collectibles.
At a recent Beijing auction, a 4-foot Labubu figure drew significant attention, while more affordable versions quickly sold out across mainland China. Industry observers have drawn parallels to past viral trends, such as the capybara stuffed toy sensation, underscoring the recurring appeal of “cute” collectibles.
Industry Perspectives and Sales Milestones
Jacob Cooke, CEO of a marketing firm specializing in Asia-Pacific online sales, remarked that Pop Mart’s success is partly driven by market timing and a growing adult interest in collectible toys. He views the company’s popularity as a fortunate convergence rather than purely strategic market dominance.
Highlighting the company’s rapid ascent, Pop Mart’s overseas sales for 2024 alone have already surpassed its total sales from 2021. The company reported total sales of 4.49 billion yuan ($624.6 million) in 2021. In contrast, 2024’s international revenues reached an impressive 5.1 billion yuan, a staggering 373% increase compared to the previous year, while sales within mainland China climbed to 7.97 billion yuan.
Looking Ahead
Despite recent market jitters reflected in its stock price, Pop Mart’s footprint continues to expand both domestically and internationally. The unfolding Labubu trend highlights the brand’s cultural resonance and market influence, positioning the company at the forefront of collectible toy innovation.
