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Morgan Stanley bullish on Labubu maker Pop Mart’s shares despite 10% slump
The US investment bank is optimistic about the toymaker’s growth potential as it continues to launch popular new products
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Yuke Xiein Beijing
The decline in Labubu-maker Pop Mart International Group’s shares of as much as 10 per cent over the last month amid growth concerns presents a buying opportunity, analysts say, noting that the company is well positioned to capture rising global demand.
“Some investors may perceive that Pop Mart’s momentum has stalled somewhat since Labubu v3, but it continues to launch popular new products,” Morgan Stanley wrote in a report on Friday. “For reference, when Pop Mart launched Labubu v1 at end-2023 and v2 in mid-2024, they were key sales drivers, but it took time for investors to recognise that.”
The US investment bank added that while store queues and resale prices have moderated, the metrics do not reflect weaker demand, as most of Pop Mart’s products were mass-market items rather than limited editions. Increasing supply through restocking “will likely lead to a sustainable balance”, it added.
Pop Mart’s extensive direct-to-consumer coverage – which accounts for 90 to 95 per cent of all sales – also gives the company access to granular, real-time data that “can effectively indicate when to reduce supply”, Morgan Stanley said.
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