Pop Mart shares slump most since April on JPMorgan downgrade

The premium once commanded by Labubus — the firm’s rabbit-eared plush dolls sought by celebrities from BlackPink’s Lisa to David Beckham — is narrowing in secondary markets in China

Shares of Pop Mart International Group Ltd. slumped the most since April on Monday after JPMorgan Chase & Co. downgraded the stock to neutral citing a lack of catalysts and an unattractive valuation.

The Chinese toymaker’s stock slumped nearly 9% in Hong Kong to the lowest level in more than a month. It is still up more than 180% year-to-date and remains the top performer on the Hang Seng Index. Pop Mart’s shares are trading at nearly 23 times their 12-month forward earnings estimate.

“We believe the valuation is priced for perfection and any small fundamental miss/negative media reports (i.e. resale price drop and third-party licensing) might drive underperformance,” JPMorgan analysts including Kevin Yin write in a note.

The Wall Street bank’s downgrade comes amid signs that the hype surrounding Pop Mart’s designer toys is cooling. The premium once commanded by Labubus — the firm’s rabbit-eared plush dolls sought by celebrities from BlackPink’s Lisa to David Beckham — is narrowing in secondary markets in China.

Pop Mart’s stock too is witnessing a sharp draw-down, having lost almost a quarter of its value since reaching a record on Aug. 26. It more than quadrupled in 2024 as Labubu sparked a craze across many Asian markets, and was added to the Hang Seng Index and the Hang Seng China Enterprises Index this month.

Pop Mart is planning to release animation and a new version of Labubu before Christmas and is also seeking to launch interactive toys, JPMorgan analysts noted. Those catalysts, however, have “low visibility,” they added while downgrading the stock to neutral from overweight, and lowering their December 2026-price target for the stock by 25% to HKD$300.

Overall, the ratio of buy ratings to total recommendations on the stock has dropped to 91%, the lowest level in a year, according to data compiled by Bloomberg.