"Annual sales of 400 million pieces!" After the "Labubu era," can POP MART's high growth be sustained?

On February 9, POP MART announced that by 2025, the global sales of all IP and all product categories of the company will exceed 400 million pieces, with THE MONSTERS global sales of all product categories exceeding 100 million pieces.

In 2025, POP MART experienced a typical "single super IP + category breakthrough" growth, with revenue expanding nearly threefold year-on-year. The core driving force comes from Labubu's global breakout and the significant amplification of IP monetization efficiency through plush toys. The latest operational data shifts market attention to "after the hit products."

According to Chasing Wind Trading Desk, HSBC Global Research analyst Lina Yan judged in a report that "the ultra-fast growth brought by Labubu will fade, but the platform's capabilities will continue," defining 2026 as a year of "re-establishing the foundation." UBS believes that the data helps alleviate market concerns about reliance on a single hit product, while the new IP Twinkle has a strong start in early 2026, providing an observation window for growth continuity.

HSBC lowered the target price for POP MART from HKD 392.5 to HKD 354, while UBS maintained it at HKD 326, with both institutions maintaining a "buy" rating. Based on the closing price of HKD 257.2 on February 9, the implied upside potential is approximately 38% and 26.7%, respectively, but the common premise is that the explosive growth of 2025 is difficult to replicate.

For investors, the key variable is shifting from "panic buying acceleration" to "normal retail expansion + new product rhythm." HSBC has lowered its revenue and profit growth forecasts for 2026, pointing to a decline in the intensity of member repurchases and a downgrade in growth rates, but also emphasizes that valuations have already accounted for IP lifecycle risks to some extent, with a greater focus on the execution of new product incubation and globalization.

2025 Breakdown: Labubu and Plush Toys "Rebuild," but the Foundation is Not Hollow

HSBC breaks down the high growth of 2025 into two levers. By IP segmentation, The Monsters (Labubu) revenue is estimated to grow approximately +582% year-on-year, with revenue contribution estimated to rise to 47% (previously about 23%). By category segmentation, plush toy revenue is estimated to grow approximately +720% year-on-year, with contribution rising to 60% (previously about 22%). This makes POP MART's growth more akin to the hit product cycle in consumer goods, where the popularity of IP combined with the release of new categories leads to higher frequency, higher average transaction value, and more easily spreadable product forms.

However, HSBC also emphasizes the "foundation excluding hit products." Under its estimation, excluding The Monsters, the revenue in 2025 is still expected to grow approximately 106% year-on-year, and excluding plush toys, revenue is still expected to grow approximately 51% year-on-year. This means that while the incremental growth in 2025 is highly concentrated, the company's original business base has not stagnated.

In mainland China, the most easily overlooked source of incremental growth is the repurchase member ARPU. HSBC states that in the revenue growth of mainland China in 2025, the contribution of ARPU from repurchase members (annual purchase frequency > 2 times) accounts for "nearly half." Structural data points to strong purchasing intensity during the "supply tight" phase: in 2025, mainland members contribute approximately 91% of sales, with repeat purchases accounting for approximately 55.8%, and the repeat purchase group contributing approximately 83% of sales. This slope driven by scarcity determines that once the supply-demand mismatch eases, a decline in growth rate is almost a logical inevitability

2026 Reestablishing the Foundation: Normalization of ARPU, Growth Returning to the "Expansion Year" Framework

HSBC's core judgment for 2026 is that after the "rush-to-buy" effect recedes, the repurchase member ARPU will normalize, thereby pulling growth back from an explosive state to the normal trajectory of retail expansion. Based on this change, HSBC has lowered its revenue growth forecast for 2026 from 30.6% to 23.7%, and its net profit growth forecast from 29.1% to 21.3%, while also cutting its earnings forecast for 2026-2027 by 11%-13%. The target price downgrade mainly stems from the reduction in earnings forecasts rather than a complete overhaul of the valuation framework, with its DCF key assumptions of WACC at 10% and perpetual growth rate at 3% remaining unchanged.

In terms of regional structure, HSBC expects the revenue growth in the PRC for 2026 to be around 13.0%, while overseas is expected to be about 35.7%. The overseas market is seen as a core buffer against the decline in domestic ARPU, but the logic has shifted from "gaining volume" to "expanding," relying more on the execution of offline locations: the number of overseas retail POS is expected to increase from 218 in 2025 to 331 in 2026. For the market, this means that the visibility of growth will depend more on details such as site selection, supply matching, hot product rhythm, and localized operations.

Risks are therefore more tilted towards the "execution side." HSBC has identified disturbances including supply chains failing to keep up with demand, scalpers driving up prices and squeezing out real consumers, shareholder placements causing short-term stock price pressure, counterfeit products affecting the brand, risks of renewing exclusive contracts with collaborating artists, and capital mismatches from entering new businesses/acquisitions, along with intensified competition and disturbances in offline foot traffic.

Valuation and Relay: Can New IP Fill the "Post-Labubu" Growth Gap

In terms of valuation, HSBC believes the market has already digested the "Labubu lifecycle risk" through valuation compression. This is based on the fact that since the beginning of 2025, the company's one-year forward EPS has risen by about 394%, but the one-year forward PE based on consensus expectations has fallen by about 45% compared to the average level of 2025, and by about 65% compared to the peak of 2025. Against this backdrop, HSBC is more focused on whether the "platform capability" can continue to incubate and globalize new IPs, rather than simply betting on the prolonged popularity of hit products.

UBS's "Relay Observation" focuses on new products and overseas interactions. It points out that the newly launched IP Twinkle performed strongly at the beginning of 2026, with Valentine's Day products selling over 30,000 and 46,000 units on Tmall and Douyin respectively, and plush toys for the Spring Festival selling over 20,000 units on Tmall on the first day of launch. Overseas, the Skull Panda x My Little Pony collaboration series sold out in the home delivery channel on the North American official website, with an Instagram preview receiving 460,000 likes. UBS also notes that markets like the U.S. still need to strengthen consumer interaction and build local IPs and brands, with a high proportion of new employees overseas and users' awareness of multiple IPs still being cultivated.

Both institutions view subsequent data as verification points. UBS states that the annual report and Q1 2026 sales data will be used to assess the sequential performance of the Chinese and overseas markets, especially the U.S. market. For investors, the core issue in the "post-Labubu era" is not whether 2025 is brilliant, but whether from 2026 onwards, the new product matrix, overseas location expansion, and more sustainable membership management can catch the transition from explosive to normalized growth