Pop Mart’s Hong Kong-listed shares dropped nearly 23% on Wednesday even as the Chinese toy company reported a surge in annual revenue, according to the company’s earnings update that prompted investor scrutiny of how sustainable its latest boom might be. The selloff underscored a question investors are asking after Labubu dolls—tied to Pop Mart’s “The Monsters” characters—drew global attention and helped drive strong results in 2025.
In its report for 2025, Pop Mart said it earned 37.1 billion yuan (about $5.4 billion) in annual revenue, up 185% from the prior year. The company also reported that its full-year profit rose to 12.8 billion yuan (about $1.9 billion), up more than 300% from 3.1 billion yuan in 2024. Analysts said the revenue growth was robust, but the stock reaction reflected concerns that the business may be overly dependent on Labubu.
Labubu’s popularity accelerated after 2024 as the toothy monster dolls gained traction on social media and appeared on celebrity handbags, the earnings coverage said. Pop Mart stores drew long queues in multiple cities as fans sought out new editions. That wave helped push the company’s sales and built expectations for whether the trend could keep expanding into 2026.
Jeff Zhang, an equity analyst at Morningstar, said the market’s main concern still centered on the earnings growth outlook. Zhang said Pop Mart’s reliance on Labubu was “likely part of the reason for Wednesday’s share price fall,” and he noted that Pop Mart’s “The Monsters” proprietary characters generated about 38% of revenue, including Labubu.
Zhang also said Pop Mart’s shares remained up 33% over the past year despite the Wednesday decline. He described the Labubu frenzy as likely “yet to cease,” but investors still appeared to focus on whether the company can sustain growth without another major driver emerging beyond Labubu-related products.
Gary Ng, a senior economist at French bank Natixis, said there was “an emerging concern that there is no second growth driver.” Ng said if growth momentum from Labubu and related products stalls, the company could face a “concentration risk” that would weigh on investor sentiment. He cited that Pop Mart’s other characters include Molly and Skullpanda.
At an earnings conference on Wednesday, Chief Executive Wang Ning sought to address those worries. Wang said, “People have expressed worries when talking about Labubu,” including “(About) whether it might just be a craze, and if it would be experiencing huge fluctuations.” He added, “However, based on our observations, we are pleased to see that it is becoming a lifestyle for more and more people,” and said the company has “strong expectations and confidence for (its) future.”
Beyond its toy lineup, Pop Mart said it has a theme park in Beijing and recently confirmed a partnership with Sony Pictures Entertainment for a new movie featuring Labubu. The company also pointed to expanding its global reach and production capabilities, including manufacturing partners in countries such as Cambodia, Indonesia and Mexico in addition to China, according to the report.
In the short term, the combination of rapidly rising revenue and a stock drop suggested investors may be more focused on growth diversification than on past gains alone. For Pop Mart, that means its next challenge may be proving that demand for Labubu can translate into broader earnings momentum rather than leaving the business vulnerable to a single breakout character.