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(Sharecast News) - Shares in Pop Mart tumbled more than 20% on Wednesday after the Chinese toymaker's annual results highlighted continued heavy reliance on its blockbuster Labubu franchise, raising concerns about the sustainability of its rapid growth.
The Hong Kong-traded group reported a 185% surge in 2025 revenue to around CNY 37.1bn (4.02bn), slightly below analyst expectations, while profit attributable to shareholders rose more than fourfold to about CNY 12.8bn, modestly ahead of forecasts.
Despite the strong headline growth, investors were unsettled by a slowdown in momentum during the fourth quarter and signs that earnings expansion may be peaking after a breakout year.
Labubu, the snaggle-toothed character at the centre of Pop Mart's 'Monsters' series, remained the dominant driver of performance.
Sales from the range climbed more than 365% to roughly CNY 14.2bn, accounting for close to 40% of total revenue, up sharply from about a quarter a year earlier.
The concentration underscored the company's dependence on a single intellectual property, even as management looked to broaden its portfolio.
Other key product lines delivered mixed results.
While some newer characters performed well, established brands such as Molly and Crybaby fell short of expectations, highlighting the difficulty of replicating Labubu's global success.
Additional pressure came from a reduction in the dividend payout ratio to 25% from 35% a year earlier, as well as perceived execution risks tied to expansion into licensing and theme parks.
Analysts also pointed to cooling secondary market prices for Labubu products as a potential signal that demand may be normalising after a surge in popularity.
Chief executive Wang Ning sought to reassure investors that growth was not solely dependent on Labubu and said the company expected revenue to increase by at least 20% in 2026, with a focus on maintaining profitability.
Pop Mart said it was continuing to expand internationally, adding stores across the Americas, Asia-Pacific and Europe, strengthening its supply chain with new manufacturing capacity, and pushing into new categories including home products.
The company was also investing in its intellectual property ecosystem through initiatives such as theme parks, licensing deals and a planned film collaboration with Sony, as it attempted to evolve from a fast-growing collectibles retailer into a broader global entertainment brand.
Shares in Pop Mart International Group closed down 22.51% in Hong Kong on Wednesday.
Reporting by Josh White for Sharecast.com.