$Pop Mart International Group Limited(POPMF)$  (9992.HK): Bubble About to Pop, or IP Incubator with Disney-like Potential?

1. The Bull Case – More Than Just Toys.

Pop Mart isn't simply riding the “Labubu mania.” What many overlook is that the company is actively building a multi-IP entertainment platform with licensing optionality. IPs like Skullpanda, Crybaby, Hirono, and Dimoo are early-stage assets with potential for monetisation via:

Animated series (already underway in mainland China)

Mobile games (early pipeline visible)

Global retail footprint (Pop Mart stores now in 20+ countries)

Think of it as Funko meets Marvel, but at an earlier, less-discovered phase.

2. The Bear Case – Froth and FOMO.

Recent price action reflects classic signs of retail-driven exuberance:

HK trading forums filled with FOMO chatter about Labubu drops

Multiple IPs now launching in quick succession — possible IP fatigue?

Revenue still 90%+ reliant on blind boxes — lack of diversified revenue channels

Valuation-wise, Pop Mart is trading at over 7× P/S (Price-to-Sales), rich for a consumer discretionary stock with gross margins under pressure (55–57%) as it expands overseas.

3. My View – Bubble? Maybe. But a Good One.

This may sound contradictory — but I believe Pop Mart is in a bubble, yet still a viable long-term hold if one treats it like a volatile IP growth stock, not a consumer staple.

Here's why:

Most bubbles form around something real. Just as Tesla was in 2020, or Meta during its mobile pivot, Pop Mart is surfacing early in a market (Asia-native IP branding) with structural growth.

The IP incubation model, if successful, builds a flywheel: successful characters → fan base → licensing and media → cross-border sales → more creator partnerships.

4. How I'm Trading It:

Core position size: Small (~2% of portfolio), due to high volatility and execution risk

Trading around the edges: Took profit on 15% of holdings above HK$35, looking to re-enter below HK$30

Catalyst to watch: International IP co-deals (e.g. a Netflix or Tencent animation), and gross margin stabilisation in the next 2 quarters

5. Risks to Watch:

Over-reliance on a single IP cycle (e.g. Labubu peak)

Poor international sell-through (U.S. retail market still shallow)

Regulatory pushback if blind-box mechanics are deemed exploitative for minors