Shares of the Laboubou producer fell the most since April due to fresh doubts about growth
The volume of bearish bets on Pop Mart stock has increased sevenfold since the beginning of the fall
Quotes of Chinese toy maker Pop Mart collapsed in trading on October 23 by almost 11%. This collapse reflects a new wave of investor concerns about the long-term sales forecasts of the manufacturer of viral dolls Labubu, which appeared in spite of the strong performance in the third quarter, writes Bloomberg.
Details
The fall in Hong Kong-traded Pop Mart shares on Thursday was the sharpest since April, Bloomberg noted. The collapse wiped out a 2.4% rise a day earlier, following the popular toy maker's report of a 250% increase in sales for the third quarter.
On October 21, ahead of Pop Mart's third-quarter sales report, the company's shares plunged 8.1%. The company's quarterly financial results announced after the close of trading - sales growth in mainland China by 190% and almost fivefold in markets outside of China - briefly calmed investors.
What the analysts are saying
"Third-quarter revenue growth beat the market consensus forecast, but investors may be more concerned about the risk of a slowdown [in growth] in the coming quarters," Bloomberg quoted Morningstar analyst Jeff Zhang as saying. - We expect Pop Mart's revenue growth to peak in 2025, followed by a slowdown starting in 2026."
According to FactSet, most analysts recommend Pop Mart stock to buy, with a consensus rating of Buy. Calculated by MarketScreener site, the average target price of Labubu producer's securities implies the potential growth of quotations by 41%.
Context
This fall, traders have been actively building up short positions on Pop Mart shares: from early September to Oct. 21, the cumulative volume of "bearish" bets increased seven times, Bloomberg reports, citing S&P data.
Although shares of the Laboubou producer are now still worth 2.5 times what they were at the beginning of 2025, their rally has lost momentum in recent months. After peaking in late August, the stock has fallen 30% amid profit-taking and fears that the rush for Pop Mart products will subside.
This article was AI-translated and verified by a human editor
