After a 36% plunge, Pop Mart still receives strong support from major Wall Street banks: Labubu to launch version 4.0 next year, value not yet fully realized.

For investors focused on the consumer sector, POP MART’s latest developments deserve close attention. Citi pointed out that the market’s concerns about the sustainability of POP MART’s growth and the risk of relying on a single IP are overstated; the company’s core value lies in its unparalleled IP incubation and operation capabilities. Despite a correction in POP MART’s stock price, according to Chase Wind Trading Desk, on November 16, Citi reiterated its “Buy” rating on POP MART in a research report and set a target price as high as HK$415.00, representing a potential upside of 91.8% compared to the closing price of HK$216.40 on November 14. Specifically, the impact on investors is reflected mainly in the following points: Flagship IP Shows Strong Vitality: The core IP Labubu’s value is far from fully tapped, with its 4.0 version delayed to 2026. There are reports that Sony Pictures has acquired the film adaptation rights, indicating the IP’s potential ceiling may be further raised. Diversified Growth Engine: The company is proactively controlling the scale of online pre-sales to achieve sustainable IP operations, not because growth has stalled. Meanwhile, aside from Labubu, a leading IP matrix including SKULLPANDA, CRYBABY, and others has already formed, effectively diversifying risks. Globalization Progress Exceeds Expectations: Overseas markets, especially the US and Japan, are performing strongly. The company is accelerating its global store layout and channel enhancement through optimized operations and localized strategies. Valuation Is Attractive: At current price levels, the risk-reward ratio is very appealing. As the upcoming sales season arrives, stock momentum is expected to recover. Labubu’s Value Is Far from Unleashed, Sony Pictures May Bring It to the Big Screen The report first dispelled market doubts about the vitality of flagship IP Labubu, stating unequivocally that its value “has not been fully released.” Citi revealed that POP MART has established a series of plans to maintain the popularity of this IP. A key piece of information is that the originally scheduled Labubu 4.0 version release in 2025 has been postponed to 2026 due to the need to prioritize production capacity for the huge demand for Labubu 3.0. This indicates the current product’s great popularity. Additionally, the company plans to introduce more new products and designs in 2026, enriching its content ecosystem by bringing in more members of the Labubu family. A highly imaginative catalyst is that, according to Forbes’ report on November 14, Sony Pictures has acquired the film adaptation rights for Labubu and plans to develop a feature film. Citi expects this move will greatly enhance Labubu’s global IP recognition, opening up new space for long-term commercial value. Concerns on Sustainable Growth Are Overstated; Diversified IP Matrix Is Taking Shape Regarding market concerns of slowing quarterly momentum and reliance on a single IP, the report believes these worries are “excessive.” The report explains that the company proactively controlled the scale of online pre-sales in Q4 2025 to ensure “sustainability” in IP operations. This might partially offset strong seasonal sales but is a strategic adjustment, not a result of weak demand. Citi expects sales momentum to recover during the key months of November and December. As to IP risk diversification, POP MART has made significant progress. The report emphasizes that besides Labubu, other signature IPs like SKULLPANDA, CRYBABY, TWINKLE TWINKLE, HIRONO, etc., are also rising as new growth engines. The company relies on its integrated IP ecosystem to continuously incubate top IPs, each with its unique growth timeline. However, the report pragmatically points out that the more critical challenge now is how to deal with quality control issues brought about by the surge in scale and to avoid incidents similar to live streaming accidents which might damage brand value. The company is striving to improve product quality through optimized operations, hiring more professionals, and collecting market feedback more frequently. Strong Overseas Expansion Momentum, Further Deepening Global Operations Globalization is the key story for POP MART’s future growth. The report notes the company’s overseas expansion is strong, especially solid growth in the US market in 2025, prompting operational reforms in marketing, store management, and recruitment, including the replacement of the US logistics manager. Specific store expansion plans include: United States: Planning to operate over 60 stores by the end of 2025 (currently over 50), while raising standards, such as requiring larger store sizes. Canada: Planning to open several stores by the end of 2025. Latin America: Entered the Mexico market via Amazon, plans to open physical stores in Mexico in 2026, and will expand in Argentina and Brazil. Middle East: The newly opened Doha Airport store marks formal entry into the Middle Eastern market, with plans for more stores in 2026. Japan: Outstanding performance in 2025, now one of the top three markets in the Asia-Pacific region. To support globalization, the company insists on localized operations, including local IP collaborations, design, and discovering local artists to create new IPs. Supply Chain & Product Innovation: Flexible Strategies and Forward-Looking Layout To cope with rapid growth in demand, POP MART is optimizing its supply chain strategies. The currently deployed strategy is: first batch production covers an estimated 70% of sales, then flexibly replenishing inventory based on market dynamics. As more experience and online data accumulate, accuracy of sales forecasting is expected to improve. As for the overseas supply chain, to respond to US tariffs uncertainty in April, the company has accelerated overseas supply chain expansion, with 10-20% of blind box production capacity now in Vietnam. Also, the company plans to establish more local overseas warehouses by 2026. On product innovation, POP MART has set up a raw materials R&D center in Dongguan to provide creative inspiration for artists, demonstrating long-term commitment to innovation. Valuation & Risk: Attractive Under High Growth Expectations Citi gives POP MART a target price of HK$415, based on a 28x 2026 expected P/E ratio. The report believes, given the company’s improving growth outlook and execution, it deserves a premium 10% above its four-year historical average P/E. Although its valuation is higher than global peers, Citi thinks this is justified by faster growth due to overseas expansion. The report also highlights potential downside risks, including: 1) intensified competition in China’s trendy toy market; 2) overseas expansion falls below expectations; 3) insufficient IP commercialization capability; 4) failure to renew licensing; 5) stricter regulatory policies. Despite Citi’s quantitative system giving the stock a “high risk” rating, the analysts believe this rating is unnecessary given the company’s qualitative strengths such as execution and growth status. ~~~~~~~~~~~~~~~~~~~~~~~~ The above excellent content is from [Chase Wind Trading Desk](https://mp.weixin.qq.com/s/uua05g5qk-N2J7h91pyqxQ). For more detailed analysis, including real-time interpretation and frontline research, please join [Chase Wind Trading Desk·Annual Membership](https://wallstreetcn.com/shop/item/1000309). Risk Warning and Disclaimer The market has risks, investment needs caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Invest accordingly at your own risk.