LABUBU accounts for nearly 40% of revenue, with the share price falling 30% in two days. How will Pop Mart overcome its 'single IP dependency syndrome'?

Image source: Zheng Tan Jun

On March 25, Pop Mart (9992.HK) released its 2025 earnings report, showing annual revenue of 37.12 billion yuan, a year-on-year increase of 184.7%; net profit attributable to shareholders was 12.776 billion yuan, up 308.8% year-on-year.

Looking at a longer timeline, Pop Mart's revenue and net profit growth have reached new highs in recent years. In 2022-2024, Pop Mart's revenue was 4.617 billion yuan, 6.301 billion yuan, and 13.038 billion yuan respectively, with year-on-year growth of 2.8%, 36.5%, and 106.9%. The attributable profit for the company owners was 476 million yuan, 1.082 billion yuan, and 3.125 billion yuan respectively, increasing by -44.3%, 127.5%, and 188.8% year-on-year.

However, on the day the earnings report was released, Pop Mart's Hong Kong stock price closed at HKD 168.3 per share, falling by 22.51%. On March 26, its stock price fell again by 10.46%, closing at HKD 150.7 per share.

What concerns does the market have about Pop Mart's future amid its rapid development?

A single IP contributes nearly 40% of revenue

Pop Mart stated in its financial report that IP operation and creative design are the core drivers promoting its continuous and healthy development.

In 2025, the revenue from self-developed products composed of artist IPs and licensed IPs amounted to 36.788 billion yuan, increasing by 189.2% year-on-year, accounting for 99.1% of Pop Mart's total revenue.

Specifically, the revenue from artist IPs reached 33.406 billion yuan, growing by 200.4% year-on-year, accounting for 90% of total revenue. Among the main artist IPs, THE MONSTERS series generated revenue of 14.161 billion yuan, an increase of 365.7% year-on-year, with its revenue share rising from 23.3% the previous year to 38.1%; the SKULLPANDA series contributed 3.54 billion yuan, accounting for 9.5% of total revenue; the CRYBABY series brought in 2.929 billion yuan, representing 7.9% of total revenue; the MOLLY series earned 2.897 billion yuan, making up 7.8% of total revenue; the DIMOO series generated 2.777 billion yuan, contributing 7.5% of total revenue; and the Little Starman series made 2.056 billion yuan, comprising 5.5% of total revenue.

Clearly, in 2025, the THE MONSTERS series accounted for nearly 40% of Pop Mart's revenue and was also the primary driver of its revenue growth. The THE MONSTERS series began in 2015, with core characters including LABUBU, ZIMOMO, TYCOCO, etc. Other IPs with a revenue share exceeding 5% also had a lifecycle of more than five years.

In 2025, the continued popularity of IPs such as LABUBU also led to changes in Pop Mart’s product mix. In 2025, plush toy revenue reached 18.708 billion yuan, surging by 560.6% year-on-year, accounting for 50.4% of total revenue, becoming the highest revenue-contributing product category for Pop Mart for the first time. During the same period, figurine revenue amounted to 12.023 billion yuan, increasing by 73.7% year-on-year, with its revenue share declining from 53.3% to 32.4%. MEGA revenue was 1.916 billion yuan, growing by 13.8% year-on-year; derivative products and other revenue totaled 4.473 billion yuan, up 182.1% year-on-year. These two categories accounted for 5.2% and 12% of total revenue, respectively.

At the same time, the contribution of Pop Mart’s members has significantly increased. As of December 31, 2025, the cumulative number of registered members in mainland China grew from 46.08 million on December 31, 2024, to 72.58 million, adding 26.5 million new registered members. In 2025, member sales accounted for 93.7% of the total, compared to 92.7% the previous year; the member repurchase rate was 55.7%, compared to 49.4% the previous year.

However, a single IP contributing nearly 40% of revenue, along with reliance on 'older' IPs, has also raised concerns about Pop Mart's future growth.

Pop Mart's Chairman of the Board and CEO Wang Ning stated at the 2025 earnings briefing that Pop Mart is not just about LABUBU. Even if all LABUBU-related performance were removed, Pop Mart would still have achieved super rapid growth. Whether it’s the lifecycle of the single IP LABUBU or its market popularity, Pop Mart remains highly confident. As a platform, Pop Mart is becoming increasingly mature in operating existing core IPs as well as incubating new IPs.

In recent years, Pop Mart has been continuously enriching the ways its IPs connect with fans. In its financial report, Pop Mart stated that Pop Mart City Park, an important extension of its IP-centric business ecosystem, has continued to optimize service experiences and diversify performances since opening in Beijing in September 2023, launching several exciting themed events to create immersive theme scenarios.

In 2025, Pop Mart hosted numerous large-scale offline themed exhibitions in multiple key cities worldwide. These included THE MONSTERS Weird Convenience Store, Star People Delicious Moments, and You Are Most Precious series multi-city joint exhibitions; integrating IP characters such as MOLLY, DIMOO, HIRONO, and Zsiga into urban landmarks and cultural-tourism scenes. Additionally, in 2025, Pop Mart opened its first popop accessories store in Beijing and Shanghai respectively. The independent dessert brand POP BAKERY also held over ten themed pop-up events across several key cities in mainland China.

Meanwhile, stores in the Chinese market are focusing on store upgrades, shifting retail environments towards more narrative, artistic, and interactive brand experience venues.

Investment in overseas markets

Overseas markets have become a significant growth engine for Pop Mart.

In 2025, Pop Mart generated revenue of 20.852 billion yuan from China, representing a year-on-year increase of 134.6%, accounting for 56.2% of total revenue. Revenue from the Asia-Pacific region reached 8.011 billion yuan, up 157.6% year-on-year, accounting for 21.6% of total revenue; revenue from the Americas amounted to 6.806 billion yuan, surging by 748.4% year-on-year, making up 18.3% of total revenue; revenue from Europe and other regions hit 1.451 billion yuan, growing by 506.3% year-on-year, representing 3.9% of total revenue.

From this perspective, nearly half of Pop Mart’s revenue comes from overseas markets, which also exhibit higher growth rates compared to the domestic Chinese market. In its financial report, Pop Mart noted that in 2025 it opened its first physical stores in Germany, Denmark, Canada, and the Philippines, further expanding its international presence. Additionally, flagship stores were launched in landmark commercial complexes in global key cities like Bangkok, Shanghai, and Sydney.

In 2025, Pop Mart added a net total of 31 offline stores in the Asia-Pacific market, bringing the total number of stores to 85; in the Americas market, it added 42 stores, reaching a total of 64 stores; in the European market, it added 22 stores, bringing the total to 36 stores.

Notably, Pop Mart has also revised the intended use of its IPO proceeds. In its earnings announcement, the company stated that it raised a net amount of HKD 5.782 billion through its listing on the Hong Kong stock market in December 2020. As of December 31, 2025, approximately HKD 1.934 billion of the net proceeds remained unused, accounting for about 33.5% of the total net proceeds.The unused portion will be reallocated for purposes such as redirecting funds originally intended for IP acquisitions to expanding into overseas markets; reallocating digital construction funds to working capital and general corporate purposes; broadening potential investment areas to include building and expanding IP commercialization platforms (such as theme parks and exhibitions). The unused funds will now be utilized for overseas market expansion, working capital, and general corporate purposes.

According to data released in April 2025, Pop Mart announced the launch of a comprehensive upgrade of its global organizational structure, formally establishing four regional headquarters: Greater China, the Americas, Asia-Pacific, and Europe. To streamline key business scenarios across various market segments, the company's headquarters have been restructured into ten middle-office departments: brand marketing, brand visuals, store space design, business development, supply chain, technology R&D, public relations, IP licensing, information services, and customer service. This move is seen as a signal of Pop Mart's increased focus on overseas markets.

During the 2025 earnings briefing, Pop Mart stated that its previous market expansion model centered around capital cities. Moving forward, second- and third-tier cities will also have opportunities. Additionally, tourist destinations and flagship store projects will be given priority consideration.

However, despite achieving high growth in 2025, Wang Ning, chairman of the board and CEO of Pop Mart, stated that in 2026 the company aims to achieve a growth rate of no less than 20%. He emphasized that ensuring long-term, stable, and healthy growth remains Pop Mart’s core objective, and that in 2026 the company will not pursue overly aggressive growth.

Wang Ning's projection of 20% growth for 2026 reflects Pop Mart's strategic shift towards 'stable operations.' However, concerns remain over the sustainability of its growth, with nearly 40% of revenue still reliant on a single IP and a heavy dependence on mature IPs. Demonstrating its ability to continuously create the 'next LABUBU' will be Pop Mart's best response to address market concerns.

Author | Wu Ren

Source | Zhengtan Finance (ID: teccj6)

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