26th August 2026 – (Hong Kong) A share price that has fallen more than 55 per cent from its high, roughly HK$250 billion in market value erased, and a founder whose paper fortune has contracted by US$14.1 billion — down 53 per cent from a US$26.6 billion peak — is the headline arithmetic of Pop Mart’s decline. But the headline obscures a more textured reality. The company is not collapsing. It grew revenue 23.8 per cent to RMB 17.17 billion in the first half of 2026 and lifted adjusted net profit 9.5 per cent to RMB 5.16 billion. What has burst is not the business, but the expectation that priced it. And the gap between those two things is where the real story sits.
In 2025, Pop Mart posted full-year revenue growth of 184.7 per cent and adjusted profit growth of 284.5 per cent. First-quarter 2026 revenue rose 75 to 80 per cent. Yet the half-year figure settled at 23.8 per cent, which mathematically implies a severe second-quarter slowdown that management has declined to quantify. When a company that was compounding at triple digits guides toward missing its own modest 20 per cent annual target, and its own chief executive labels 2026 “a year of internal adjustment,” the market is right to reprice. A valuation built on the assumption of perpetual hyper-growth cannot survive the arrival of ordinary growth.
Overseas revenue, which surged 291.9 per cent in 2025 and lifted the international contribution to 43.8 per cent of the group, reversed in the first half of 2026, falling 11.1 per cent to RMB 4.97 billion and shrinking back to roughly 29 per cent of the total. The Americas dropped 16.5 per cent even as the store count there nearly doubled from 41 to 86 outlets. This is the most diagnostic figure in the entire report. When you double physical distribution and revenue still falls, the problem is not access. It is demand. Meanwhile the domestic base — mainland China, Hong Kong, Macau and Taiwan — grew 47.3 per cent and now carries 71 per cent of the group. The company has, in effect, retreated to the market that understands it.
The Monsters franchise, which houses Labubu, recorded its first-ever revenue decline, falling 7.5 per cent to RMB 4.45 billion and shedding its share of group revenue from 34.7 to 26 per cent. Chief operating officer Si De’s admission on the earnings call was unusually candid: much of 2025’s overseas surge was driven by Labubu, many new international buyers knew little of Pop Mart’s wider portfolio, and much of the overseas workforce remains inexperienced. This is the anatomy of a fad. A single character pulled millions of first-time buyers who never converted into collectors of the broader universe, and when the character cooled, so did the cohort.
The margin picture confirms that the quality of growth has changed. Gross margin slipped to 69.7 from 70.3 per cent, but adjusted net margin fell more sharply, by 390 basis points to 30 per cent, as selling and administrative costs climbed nearly RMB 895 million. More telling is the balance sheet: inventory rose to RMB 6.10 billion and turnover days ballooned from 123 to 201. Goods are moving through the system more slowly, a classic signal of demand that has run ahead of what the retail network can absorb, particularly overseas where air-freight reliance and supply constraints add cost.
Twinkle Twinkle grew 580.6 per cent to RMB 2.65 billion, becoming the second-largest property at 15.4 per cent of revenue, while Crybaby, Dimoo, Skullpanda and Hirono each cleared RMB 1 billion. Plush toys now represent 57.2 per cent of sales, up 60 per cent. This is the character factory working as designed — spreading risk across intellectual properties so that no single fading star, whether Labubu or the 33.6-per-cent decline in Molly, can sink the ship. The problem is that this diversification is demonstrably a China phenomenon. It has not yet proven exportable.
The competitive backdrop tightens the frame further. Miniso’s Top Toy has refiled to list in Hong Kong, with Kayou and 52Toys advancing, and Frost & Sullivan pegs China’s collectible-toy market at RMB 110 billion this year. Pop Mart’s response — theme-park zones, a bakery chain, an accessories line and a live-action Labubu film with Sony — is a bet on turning characters into durable entertainment franchises. These are structurally slower, capital-heavier businesses that pay off over years, not quarters. The RMB 2–5 billion buyback plan and RMB 3.15 billion in dividends signal a company allocating capital toward shareholders rather than reinvestment at any cost, which is prudent but also an admission that the era of frictionless expansion has ended.
The bubble that has deflated was the market’s, not the company’s. Pop Mart remains profitable, cash-generative and dominant at home. The unresolved question is narrower and harder i.e. whether it can build a second act abroad that does not depend on the next viral craze arriving on schedule.
