Key Takeaways:
Pop Mart International Group (9992.HK) reported first-half 2026 net profit of CNY 5.04 billion, up 10.1 percent from a year earlier but short of the CNY 6.64 billion consensus, as revenue growth slowed sharply from fiscal 2025's 2.8-fold surge.
"Like an F1 racing car pulling into the pits, we are taking a break, refueling, and changing tires," founder and Chairman Wang Ning said at a March earnings briefing, adding the company would not pursue growth that boosts revenue without lifting profits.
Revenue rose 23.8 percent to CNY 17.17 billion, missing the CNY 19.1 billion to CNY 19.98 billion consensus compiled by QUICK-FactSet. Adjusted net profit climbed 9.5 percent to CNY 5.16 billion, with the adjusted margin narrowing to 30 percent from 33.9 percent. Gross margin eased to 69.7 percent from 70.3 percent, and the board declared no interim dividend.
The miss stems from a reversal in overseas markets that had driven the toy maker's expansion. Asia-Pacific revenue fell 9.7 percent to CNY 2.58 billion and the Americas dropped 16.5 percent to CNY 1.89 billion, as online-channel momentum cooled and the Labubu craze peaked. Overseas's share of revenue shrank to 29 percent from 40.3 percent a year earlier. China, by contrast, surged 47.3 percent to CNY 12.2 billion, or 71 percent of total, helped by a 62.7 percent jump in online sales.
The plush category became the top growth driver, rising 60 percent to CNY 9.82 billion and accounting for 57.2 percent of revenue, versus 30.2 percent for figurines. THE MONSTERS, led by Labubu, still topped the IP rankings at CNY 4.45 billion but fell 7.5 percent year over year. Twinkle Twinkle climbed to second place with CNY 2.65 billion, up 580.6 percent, while CRYBABY, DIMOO and SKULLPANDA each topped CNY 1.5 billion. MOLLY dropped 33.7 percent to CNY 900 million.
Profitability took a hit from foreign-exchange losses of CNY 720 million, against a CNY 120 million gain a year earlier, a swing of roughly CNY 840 million. Operating profit rose 11.3 percent to CNY 6.73 billion, well below revenue growth, while distribution costs climbed 23.1 percent on higher lease and staff expenses. Inventory turnover days stretched to 201 from 123 on advance overseas stocking.
Wang warned on the earnings call that operating pressure in the second half will exceed the first, making it likely the company misses its initial full-year 20 percent growth target. Management plans a share buyback of CNY 2 billion to CNY 5 billion over the next six months, after repurchasing and cancelling 11.22 million shares for about HK$1.74 billion in the first half.
The guidance cut forces investors to reassess valuations built on high growth, with the stock having surged through 2025. The key question is whether Pop Mart can build its next growth engine beyond Labubu, with the pace of overseas inventory destocking and the ramp of new IPs such as Twinkle Twinkle the metrics to watch in the second half.
This article is for informational purposes only and does not constitute investment advice.
