Pop Mart International is riding another wave of success, this time with its Ne Zha toy line, following the massive popularity of its Labubu figurines. The latest collection sold out within days of its release on January 30, driven by the record-breaking box office success of Ne Zha 2, China’s highest-grossing animated sequel. According to the state-run China Movie Database, the film has surpassed The Battle at Lake Changjin in all-time ticket sales after an exceptional Lunar New Year run.
The company’s ability to capitalize on trending intellectual properties (IP) has fueled its rapid expansion. Pop Mart’s Labubu, a mischievous elf adored by millions, including a member of Blackpink, contributed to the brand’s global success and helped its stock surge 350% in Hong Kong last year. Investment bank Morgan Stanley has recognized Pop Mart’s potential, naming it one of its top stock picks. Analysts believe Pop Mart will become a preferred partner for global IP owners looking to monetize their brands through collectible toys.
While third-party IPs like Ne Zha account for only 15-20% of Pop Mart’s revenue, they have been instrumental in attracting new customers. The popularity of Ne Zha 2, which has grossed over 6.5 billion yuan ($892 million) in ticket sales, is expected to grow as the film debuts in markets such as the US, Canada, Australia, and Singapore later this month.
Despite a 2.1% dip in share price to HK$99.40 on Thursday, Pop Mart’s stock has surged 441% over the past year, significantly outperforming the Hang Seng Index’s 28% gain. Morgan Stanley anticipates a strong earnings upgrade for the company, following a 70% jump in net profits to 3 billion yuan in the first half of 2024. Sales outside mainland China rose 260% to 13.5 billion yuan, accounting for nearly 30% of total revenue.
The demand for Pop Mart’s collectibles remains high, with Ne Zha figurines being resold on second-hand trading platforms like Xianyu for up to 180 yuan, nearly triple their original price of 69 yuan. In response, Pop Mart is adjusting production schedules to meet growing demand.
Meanwhile, Labubu toys remain popular, though speculative hype has slightly cooled after the company ramped up production to improve accessibility. With strong Lunar New Year sales across Asia, Pop Mart continues to expand, operating 374 retail stores and over 2,189 vending machines in mainland China, along with 85 stores and 143 vending machines overseas—more than double from the previous year.
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