To The Moon

$POP MART(09992)$ has taken the collectibles world by storm, and its flagship character, Labubu, is leading the charge. With a human-sized Labubu figure fetching $150,000 at auction and the company’s stock hitting a record high of HK$269.80 in Hong Kong, Pop Mart’s valuation has soared to a jaw-dropping $34 billion—surpassing the combined worth of Barbie, Hello Kitty, and G.I. Joe. But as the Labubu frenzy grips fans worldwide and new IPs like Crybaby, Skullpanda, and Hirono gain momentum, the big question looms: Is Pop Mart’s bubble about to burst, or does its IP incubation prowess signal unlimited growth ahead?

The Case for Pop Mart’s Unlimited Potential

Pop Mart’s rise isn’t just luck—it’s a masterclass in IP creation and marketing. Labubu has evolved from a quirky collectible into a global status symbol, with fans like BLACKPINK’s Lisa amplifying its cultural clout. The company’s ability to churn out new hits like Crybaby and Skullpanda shows a robust pipeline that keeps collectors hooked. The recent release of Labubu’s third-generation vinyl plush series, "High Energy Ahead," sparked a buying frenzy, proving Pop Mart knows how to stoke demand.

Financially, Pop Mart is a powerhouse. Its $34 billion valuation reflects sky-high investor confidence, and its stock has held strong in Hong Kong even as other new consumer stocks—like three peers that recently pulled back from their highs—have faltered. This resilience hints at a unique strength. Add to that the global angle: Pop Mart’s app is climbing U.S. rankings, and Labubu’s appeal is crossing borders. If the company can crack international markets while keeping its IP engine humming, the sky might truly be the limit.

The Bubble Warning: Too Hot to Handle?

But here’s the flip side: when everyone’s piling into a trend, it’s often a signal to cash out. The investment community’s whispering that Pop Mart’s meteoric rise could be a classic bubble in the making. A $34 billion valuation is no small feat, but is it sustainable? Without diving deep into financials, it’s hard to say if the numbers back up the hype.

The collectibles market is notoriously fickle. Today’s obsession—Labubu—could be tomorrow’s dust-collector if tastes shift. Pop Mart’s growth hinges on its IPs staying relevant, and that’s a gamble. Plus, high valuations invite competition. Rivals could flood the market with their own characters, chipping away at Pop Mart’s dominance.

Then there’s the broader market context. While Pop Mart has defied the pullbacks seen in other Hong Kong consumer stocks, history suggests that what goes up fast can come down just as quickly. The $150,000 Labubu sale might scream “peak hype,” and smart investors know that euphoria can precede a fall.

Striking a Balance: What’s Next for Pop Mart?

So, where does Pop Mart stand? It’s a tale of two forces. On one hand, its IP incubation capabilities are top-notch—few companies can match its knack for turning vinyl figures into cultural icons. The global potential is real, and if Pop Mart keeps innovating and expanding, it could solidify its place as a toy industry titan. On the other hand, the risks are glaring: an overheated valuation, a trend-driven market, and the spectre of competition.

For investors, this isn’t a black-and-white call. Pop Mart’s resilience and growth story are compelling, but caution is key. The collectibles craze could propel it higher—or leave it vulnerable if the bubble pops. My take? There’s still upside if Pop Mart plays its cards right, but don’t bet the farm without a solid exit plan.

As always, Do Your Own Due Diligence and ensure risk management > prediction. Trade smart, stay adaptable, and don’t let emotions chase candles.