Deutsche Bank AG reiterated its “Sell” rating on Pop Mart International Group Ltd., cutting its price target by 11% to 140 Hong Kong dollars and warning of potential negative revenue growth in 2026.
“Overseas market is cooling, domestic market shows fatigue,” Deutsche Bank analyst Sammi Xu wrote in a May 7 report, forecasting a 24% miss on 2026 consensus net profit if current trends persist.
The bank’s bearish analysis stands in stark contrast to recent market sentiment. The stock jumped nearly 7% on Friday after famed investor Duan Yongping disclosed he had rotated his entire position in China Shenhua into Pop Mart, citing confidence in Chairman Wang Ning. Deutsche Bank’s new price target implies roughly 14% downside from the stock’s recent price of 162.2 HKD.
The core of the bank’s thesis rests on a sharp sequential slowdown. It projects first-quarter overseas sales fell 27% from the prior quarter, led by a 41% drop in Europe, and sees signs of IP fatigue as new toy series trade at discounts in the secondary market.
Deutsche Bank’s report paints a cautious picture ahead of Pop Mart’s first-quarter operational data release in mid-May. The bank’s 2026 revenue forecast was lowered by 14% to 36.5 billion yuan, with adjusted net profit pegged at 11.5 billion yuan.
The downgrade is rooted in concerns about both international and domestic performance. While year-over-year overseas growth may appear strong due to a low base in early 2025, the bank estimates a significant quarter-over-quarter decline. Domestically, analysts noted that recent IP launches like "The Monsters x Sanrio" are trading at up to 40% discounts on secondary markets, a sign of waning heat.
The institutional pessimism clashes with a wave of retail enthusiasm sparked by Duan Yongping. Known for his long-term value investing, Duan’s high-profile purchase and sale of put options equivalent to a 3% stake provided a powerful catalyst for the shares. His actions have driven significant Southbound Stock Connect inflows.
Investors are now focused on four key areas ahead of the company’s first-ever quarterly management call: the true quarter-over-quarter trend in overseas markets, April and May sales data, guidance on operating profit margins, and the launch progress of the critical "Labubu 4.0" series.
The divergence between the bank's fundamental analysis and the investor-driven rally sets up the upcoming data release as a key test for Pop Mart's stock. The results will likely determine whether the bearish forecast from Deutsche Bank or the bullish conviction of Duan Yongping dictates the share price's next major move.
This article is for informational purposes only and does not constitute investment advice.
