Mainland Investors Entangled in Pop Mart’s “Emotional Maze”

A new wave of consumer trends is simultaneously stirring emotional responses among the public and institutional investors. During the 2024 New Year holiday, investor Xiao Yu encountered an unexpected scene while traveling in Thailand. In a newly opened shopping mall on the outskirts of Bangkok, he noticed a long queue of enthusiastic young people. Initially assuming it was a luxury boutique, he was surprised to find it was a newly launched Pop Mart concept store.

Seemingly overnight, Pop Mart has rapidly gained traction worldwide. Celebrities such as Lisa, Rihanna, and Beckham have increasingly showcased their Pop Mart collectibles. According to the company’s annual report, by the end of 2024, Pop Mart’s sales had expanded to more than 20 countries and regions, with overseas revenue surpassing domestic figures—signaling its transformation into a global entertainment company with revenue exceeding RMB 10 billion.

Investor interest in Pop Mart has surged in tandem with its popularity. Over the past year, the company's stock price has risen nearly 300%. As of the close on June 12, Pop Mart's market capitalization stood at HKD 358.3 billion (approximately RMB 320 billion), surpassing companies such as Luxshare Precision, Hikvision, and Hygon Information, and closely trailing consumer sector giants like Kweichow Moutai and Wuliangye.

As the company experiences unprecedented growth and globalization, fund managers are facing a growing emotional conflict. Optimists view Pop Mart as a representative of new-generation "emotional consumption" and assign it an unprecedented valuation. Meanwhile, more cautious institutions have long held a bearish view, citing concerns over static valuations and earnings performance, even though a predicted peak has not yet materialized.

The emotional pull of Pop Mart is not limited to consumers. It has also made its way into investment offices. Baoyin Fund, founded by Wang Qiang, one of China’s first futures traders, observed the trend early on when employees began placing Pop Mart figurines on their desks. Even staff over 40 began collecting them. This prompted one fund manager to conduct a systematic investigation into the company’s value through market research, seller reports, and social media tracking.

Prior to the popularity of the Labubu character, Baoyin Fund had already identified early signs of Pop Mart's appeal, especially in Southeast Asia. The firm concluded that Pop Mart had developed a self-sustaining, emotionally driven "consumer universe," earning it the nickname “Emotional Moutai.” In early 2024, Pop Mart’s stock was priced at HKD 20 per share. By June 11, 2025, it had reached nearly HKD 270. Baoyin Fund noted that the focus should not be on the share price alone but on the paradigm shift in investment that such growth represents. However, due to limited information, the fund’s exact holdings remain undisclosed.

Another RMB 10 billion private equity firm likened Pop Mart’s rise to the 2015 craze for Moutai’s zodiac series. At the time, strict supply control of the Year of the Goat edition led to dramatic price appreciation, with initial prices of around RMB 2,000 rising to RMB 30,000. Today, similar dynamics are evident in Pop Mart’s rare figurines, with reports of overseas purchases being detained at customs, fueling market speculation and increased investor interest.

One large private equity firm acknowledged entering late—only initiating research after Pop Mart’s strong performance. The firm had previously experienced significant losses due to an overemphasis on traditional consumer sectors, such as baijiu, home appliances, food and beverage, and pharmaceuticals—segments that have underperformed since 2021. The firm later discovered that investment targets offering emotional value tended to have higher gross margins, despite lower unit prices compared to other entertainment-related products. Shifting consumer behavior was also noted, such as former LEGO fans moving to alternative brands. At one point, Pop Mart became the firm's top holding, comprising nearly 20% of its portfolio.

Despite this, some peers continue to favor traditional consumer names based on valuation familiarity. The firm believes such approaches no longer reflect current market conditions. Many institutions previously focused on emerging consumer companies have shifted capital toward Pop Mart due to its proven performance. However, not all institutions have embraced this trend. Several explicitly stated they would not participate. Xia Junjie, founder of Renqiao Asset Management, commented that Pop Mart, Lao Pu Gold, and Mixue Bingcheng represent “self-pleasing consumption” and acknowledged significant stock price increases. However, he argued that the broader new consumer sector is overheated, with apparent bubbles forming.

He outlined a possible bubble progression: weak overall consumption → countertrend growth by “self-pleasing” companies → capital pursuit → fund inflows → mutual validation of fundamentals and price → trend momentum → eventual bubble. This mirrors the momentum-driven rally in A-share new energy stocks in 2021.

Another RMB 10 billion private equity firm remarked that investing in Pop Mart conflicted with their team's investment logic. They criticized some institutions for applying A-share momentum strategies to Hong Kong’s consumer sector, likening it to speculative behavior in biotech stocks and warning of distorted risk-reward dynamics. This debate over Pop Mart’s valuation and role in modern consumption investment may take a long time to reach a final conclusion.