Pop Mart drops over 30% in two days, heavy-asset funds adjust positions in advance, and southbound funds are still buying against the trend?

On March 26, Pop Mart (09992.HK) experienced another sharp decline, with intraday drops exceeding 10%. Yesterday (March 25), the stock fell 22.51% for the day, marking a rare single-day decline since its listing on the Hong Kong Stock Exchange.

According to statistics, by the end of Q4 2025, 108 actively managed funds held large positions in Pop Mart, with 16 funds having it as their top holding. However, based on the net asset value changes on March 25, although these funds generally showed negative returns, the pullback was small, with a maximum decline of only 1.83%, and some less than 0.1%. There are clear signs of portfolio adjustments and stock rotations.

In fact, Pop Mart’s 2025 financial report was impressive, but industry concerns remain about its heavy reliance on a single IP. Recent Hong Kong Stock Connect trading data shows that southbound funds continue to net buy this stock.

Pop Mart Faces “Sell-Off” Wave Again, Declines Over 30% in Two Days

On March 26, Pop Mart opened with heavy selling, with intraday declines exceeding 10%. Yesterday, the stock closed down 22.51%, marking a rare single-day largest drop since its listing on the Hong Kong Stock Exchange.

Of course, this is not the first time Pop Mart’s stock price has plummeted since its listing. Compared to previous declines, the market’s view this time has once again shifted to concerns over growth potential. According to the 2025 financial report, the company’s revenue grew by 184.7% year-over-year, yet investors remain skeptical.

An industry insider told the Daily Economic News on March 26 that the company’s main business—popularly known as “blind boxes”—is well-loved by its audience, and IPs like LABUBU have become phenomenally successful. However, beyond that, the company’s business scope is quite limited. This is a key concern for future growth. Market analysts point out that heavy dependence on a single blockbuster IP raises fears about the upper limit of earnings growth.

In the early days of its listing, many primary market investors worried about the red ocean retail model of trendy toys, especially since Pop Mart lacked heavyweight IPs and was considered overvalued at the time. Between 2021 and 2022, its stock price fell from about HKD 104.78 to HKD 9.77.

Later, as the company’s performance improved and product popularity surged, its stock price began to rise significantly in 2024. However, funding disagreements also became more apparent. Wind data shows that from early March 2024 to late August 2025, although the stock price increased tenfold, it experienced multiple sharp corrections, with several days seeing declines over 5%, and the largest single-day drop reaching 21.96%.

Nevertheless, industry insiders believe that Pop Mart remains a scarce consumer stock in the eyes of foreign investors, continuing to attract market attention. With the explosion of AI technology, market investment styles are shifting, and the value of such new consumer stocks is being reshaped once again.

Some industry insiders admit, “Based on market expectations, the company’s growth rate has not yet reached that level. Phenomena like LABUBU cannot be replicated, so future profitability is uncertain.” Others note, “The company’s performance is below market expectations, and with structural revenue imbalance, market feedback is clear.” Under the pressures of valuation, performance, and market style, another “sell-off” for Pop Mart seems predictable.

Major Funds Hold Firm Amid Pullback, Clear Signs of Portfolio Rebalancing

Contrasting sharply with the sharp stock price decline, major public funds that held large positions in Pop Mart, especially active funds, have not shown significant withdrawals in recent days. Portfolio rebalancing is evident.

For example, Minsheng JiaYin Value Discovery Fund’s Q4 report last year showed it held 130,500 shares of Pop Mart, with a market value of HKD 22.13 million at quarter-end, making it the fund’s largest holding. On March 25, despite the stock falling 22.51%, the fund’s Class A units’ net value only declined by 0.08%.

Similarly, Yinhua Digital Economy was also a top holding at the end of Q4 last year, with its market value ranking first among holdings. On the previous day, its Class A units only fell 0.16%. Notably, among active funds that listed Pop Mart as their top holding at the end of last year, the maximum net value decline on March 25 was only 1.83%.

It’s clear that as buy-side institutions, especially active fund managers, have adopted a defensive investment strategy toward Pop Mart.

On the other hand, the sell side remains optimistic about its future valuation. A research report from Huaxi Securities highlights the long-term value of its IP incubation platform. Puyin International even states that Pop Mart’s valuation is severely undervalued, and the recent sharp correction presents a good buying opportunity.

More Dips, More Buying? Southbound Funds Net Buy Pop Mart Recently

Even if public funds are rebalancing defensively, whether they are willing to re-enter the stock after the price drops is worth noting. Data shows that despite the recent sharp decline, southbound funds have been net buying this stock.

According to Hong Kong Stock Exchange data, on March 24, the Shenzhen-Hong Kong Stock Connect showed that the amount bought through the scheme was HKD 905 million, with HKD 257 million sold.

On March 25, Pop Mart ranked first among the top ten most active securities in the Shanghai-Hong Kong Stock Connect, with a total turnover of HKD 9.64 billion, of which HKD 5.52 billion was bought and HKD 4.12 billion sold. Similarly, in the top ten in the Northbound trading, it was the most traded stock, with HKD 3.27 billion bought and HKD 2.35 billion sold.

Regarding how to evaluate Pop Mart’s investment value, market analysts suggest that it requires balancing “consumer attributes” and “IP attributes.” On one hand, the company has demonstrated strong capabilities in product design, channel operation, and user engagement, with solid cash flow generation, making it a high-quality new consumer retail company.

On the other hand, its IP system is still evolving. Compared to platform companies with content ecosystems, its content depth and cross-media development still have room for improvement, which means its valuation center may not sustain at the level of pure IP companies long-term.

Therefore, the market’s valuation of Pop Mart is shifting from “storytelling” to “performance.” If it can continue to launch IPs with lifecycle and expand into broader content areas, its valuation could rise again. Conversely, if growth continues to rely on single hits or blind box sales, it is more likely to be valued as a consumer retail company with relatively stable but limited valuation levels.

As of press time, the Hong Kong stock price of Pop Mart is HKD 149.20, with a maximum intraday decline of 11.82%.

Daily Economic News