The share price of Chinese collectible toymaker Pop Mart International Group Ltd. fell approximately 30% following the release of its 2025 annual report on Tuesday, March 25. The sharp decline is attributed to investor concerns over the company's heavy and growing dependence on revenue from its "The Monsters" intellectual property (IP), which includes the viral character Labubu.
According to the financial results, sales from "The Monsters" IP reached 14.16 billion Chinese yuan (about $2 billion) in 2025, accounting for roughly 40% of Pop Mart's total annual revenue. This represents a significant concentration risk, as the proportion was just 23% in the previous financial year, with sales of 3.04 billion yuan.
Revenue Growth Masks Underlying Risk
Despite the stock market reaction, Pop Mart posted blockbuster sales growth of 184.7% for the year. Total revenue surged from 13.04 billion yuan in 2024 to 37.12 billion yuan in 2025. In a research note published on March 25, investment bank Jefferies maintained its "buy" rating on the stock, stating the company's growth outlook remains "solid."
However, the market's focus shifted to the imbalance in the revenue stream. The report also indicated that the proportion of revenue from Pop Mart's other major IPs, Skullpanda and Crybaby, was lower in 2025 compared to 2024, further highlighting the dominance of "The Monsters."
Signs of a Bursting Bubble
The news follows more than a year of viral success for the Labubu character, fuelled by the global collectibles boom and blind-box mania. However, data suggests the frenzy may be cooling. In October, figures from the Chinese resale platform Qiandao showed that mini Labubu resale prices had fallen below their original retail prices, indicating a potential saturation in the secondary market.
Pop Mart's stock is now down approximately 60% from its peak in August 2024, with the recent 30% drop occurring since the earnings announcement.
Extending the IP Lifespan
In response to these market dynamics, Pop Mart has been actively working to extend the commercial lifespan of the Labubu brand. This strategy includes collaborations with established, evergreen IPs such as Sanrio's Hello Kitty and My Melody.
In a more ambitious move, the company announced on March 19 a partnership with Sony Pictures Entertainment to produce a feature film centred on Labubu. The project will be directed by Paul King, known for "Paddington" and "Wonka." The screenplay will be written by Labubu's original creator, Kasing Lung, alongside American playwright Steven Levenson, a Tony Award winner for "Dear Evan Hansen."
Pop Mart's representatives did not respond to a request for comment from Business Insider, which first reported the stock movement and earnings details.