Key Takeaways:
Famed investor Duan Yongping has begun accumulating a stake in toy manufacturer Pop Mart, using put options to build his position after the company's stock fell 50% from its recent high.
"I haven't felt this kind of excitement for a long time," Duan said, after studying the company's strong recent earnings report.
Duan is selling put options, a strategy that allows him to collect premiums and, should the stock fall below the strike price, acquire shares at a lower effective price. The move comes after Pop Mart's stock has been cut in half from its August 2025 peak. The exact size of Duan's planned investment has not been disclosed.
Duan's public endorsement of a consumer stock, a departure from his usual tech focus, could draw significant new investor attention to Pop Mart and the broader "new consumption" sector in China.
Duan, a well-known value investor famous for his early bets on companies like Apple and Pinduoduo, said his interest in Pop Mart was piqued by its recent profitability. "I've now figured out the sustainability issue," he commented, indicating a long-term view. He revealed he has become a "fan" of Pop Mart's founder, Wang Ning.
He outlined what he sees as Pop Mart's competitive moat:
The move comes as analysts reassess China's consumer sector. Yin Weichun, a fund manager at Zhong Ou Asset Management, noted that valuations for "new consumption" stocks, including toy makers, have become more attractive after a recent sell-off.
"The younger generation's focus on emotional value and personalization has fueled the rise of new consumer brands," said Zhou Han, a fund manager at Huitianfu. He believes these companies, while not always large, are more adaptable to fast-changing consumer tastes.
Duan Yongping's investment serves as a significant vote of confidence in Pop Mart's business model and the longevity of the "new consumption" trend. Investors will be closely watching Pop Mart's next earnings release to see if the growth momentum that attracted Duan can be sustained.
This article is for informational purposes only and does not constitute investment advice.
