Pop Mart 1H2026 Results: The Star IP Effect Is Fading.

Performance Below Expectations as the Star IP Effect Begins to Fade

Table 1: Pop Mart 1H Results vs. Market Expectations

In CNY’ Billion, unless otherwise stated.	Estimate	Actual	Est. Growth	Actual Growth
Revenue	20.0	17.2	44.0%	23.8%
Operating Profit	7.6	6.7	25.5%	11.3%
Adjusted Net Profit	6.7	5.2	41.5%	9.5%
Source: Bloomberg, iFAST Compilations. Data as of 30 June 2026.

Whether measured against last year's y-o-y growth rates or in absolute terms, Pop Mart's 1H2026 results missed market expectations across the board, dealing a fresh blow to a share price that has been weak since March.

We noted in our previous article that LABUBU is a double-edged sword for Pop Mart. While the IP has driven enormous revenue growth and propelled the share price higher since last year, once its popularity starts to fade, the company's revenue structure would begin to show its fragility, triggering a downward re-rating — and this half-year's results are proof of exactly that.

Table 2: Pop Mart's Top 5 IPs by Revenue

Rank	2025 IP	Revenue (CNY’ Billion)	% of Revenue	2026 IP	Revenue (CNY’ Billion)	% of Revenue
1	The Monsters	4.8	34.7%	The Monsters	4.5	26.0%
2	Molly	1.4	9.8%	Twinkle Twinkle	2.7	15.4%
3	SKULLPANDA	1.2	8.8%	CRYBABY	1.6	9.5%
4	CRYBABY	1.2	8.8%	DIMOO	1.6	9.4%
5	DIMOO	1.1	8.0%	SKULLPANDA	1.6	9.0%
Source: Company reports, iFAST Compilations. Data as of 30 June 2026.

As of 1H2026, The Monsters remains Pop Mart's highest-earning IP. Even though the IP boosted its exposure this year through appearances at the World Cup opening ceremony and pop-up stores, a 7.5% y-o-y revenue decline suggests the IP's popularity may be starting to wane.

Across the overall IP portfolio, every franchise except Molly and The Monsters posted revenue growth, with Twinkle Twinkle surging 580.6% y-o-y to become Pop Mart's second-largest IP by revenue. Overall, although The Monsters’ share of total revenue has declined, Pop Mart's revenue structure remains centred on this single franchise, and growth from other IPs has not been enough to offset the shortfall — exposing the fragility of the company's revenue base.

That said, Pop Mart's revenue performance still has bright spots when viewed by product category.

Chart 1: Pop Mart Revenue by Product Category

Plush toys generated CNY 9.83billion in revenue in 1H2026, up 60% y-o-y — a far sharper increase than for figure toys or other IP-related products. Plushy toys also grew as a share of total revenue, rising from 44.2% in the same period last year to 57.2% this year, underscoring its growing role as the key driver of revenue growth.

In terms of product characteristics, plush toys have more diverse use cases and offer greater interactivity — they can be reshaped, switched between multiple forms, or even worn as accessories. Their stronger companionship value, relative to other categories, deepens the emotional connection between the IP and consumers and drives repeat purchases.

Overseas Expansion Slows, but Investment Continues

Chart 2: Revenue Proportions of Mainland China and Overseas Businesses

Last year, riding on LABUBU’ popularity, overseas operations became a key driver of Pop Mart's revenue growth. However, after peaking at 43.8% of total revenue last year, the overseas share fell sharply to 29% in 1H2026, even below the 2024 level. Last year's “high-traffic” operating environment prompted Pop Mart to pursue a relatively aggressive expansion strategy; diversified sales channels combined with a surge in IP popularity drove substantial growth in overseas revenue last year. However, as most of that overseas growth was driven by a single IP, this means the impact on overseas operations is more pronounced now that the IP's popularity is fading this year.

Chart 3: Pop Mart Lease Liabilities and Finance Costs

Pop Mart's lease liabilities increased by CNY 870 million in 1H2026, and finance costs — driven mainly by lease expenses — rose to CNY 81.2 million, close to the full-year 2025 level. As retail stores account for the bulk of Pop Mart's right-of-use assets, it can be inferred that most of the lease interest stems from the retail store business. Physical stores have always been a key part of how Pop Mart creates a distinctive shopping experience, and to raise brand awareness, the net increase in the number of Pop Mart's physical stores in 1H2026 reached 46, of which 67.4% were in the Americas and Europe, showing that the company's expansion plans have not stopped despite the slowdown in overseas revenue growth.

However, with overseas revenue declining and Pop Mart's current IP portfolio strategy facing challenges, revenue from new stores may not fully cover the costs of opening them. Pop Mart's interest-bearing debt (mainly lease liabilities) as a share of total assets has also risen from 8.9% at the end of last year to 12% in 1H2026, and the additional interest expense could further constrain the recovery of the company's profit margins.

Growth Pains Emerge; Target Price Cut

Pop Mart CEO has said that, given the high base effect and the company's organisational restructuring, it will likely be unable to meet its 20% growth target this year. We believe Pop Mart has now entered a period of growing pains after a year of rapid expansion. Although the 1H2026 IP revenue mix shows LABUBU’s share declining, the structural issues left behind by past over-reliance on a single IP will likely take longer to digest and resolve before a more balanced revenue structure can be achieved. Because a hit IP's popularity involves a significant degree of chance, building a more resilient growth trajectory may require Pop Mart to keep discovering new IPs and build out more comprehensive promotional channels for its existing IP portfolio, in order to increase the diversity of its product mix.

On the other hand, Pop Mart's overseas expansion has also run into headwinds. Although rising raw material costs have already pressured margins in the relevant segment, the core reason overseas performance has fallen short of expectations is that local consumers have yet to develop full brand awareness, with relatively limited recognition of Pop Mart's IP portfolio — which also amplifies the fragility of overseas revenue. At the same time, the company is maintaining its existing overseas expansion plans: opening stores, holding events, and seeking promotional partners all require substantial upfront costs. Should overseas revenue growth fail to keep pace, these rising costs would become an additional financial burden, further weighing on overall profitability.

Chart 4: 12-Month Forward P/E of Pop Mart

Pop Mart's 12-month forward P/E ratio has retreated sharply from its peak to the current 12.9x, and we believe Pop Mart's revenue and profit growth will slow further. Combined with our previously stated concerns about the company's growth prospects, which remain unresolved and show no clear signs of improvement, we are lowering our fair P/E multiple for Pop Mart from 15x to 14x, well below its 5-year average of 27.1x. Our end-of-2028 target price is correspondingly cut to 169.9 HKD, implying upside of 10.1% as of 26 August 2026, reflecting our view that share price upside may remain limited unless the company's structural issues improve. That said, Pop Mart also announced at its results briefing that it will launch a large-scale share buyback program of approximately CNY 2–5 billion in the second half of 2026, providing some cushion against downside risk to the share price.

Table 3: Valuation and EPS Forecast of Pop Mart

	2025A	2026E	2027E	2028E
EPS(HKD)	10.7	11.0	11.6	12.1
EPS Growth Rate	284%	2.9%	5.8%	4.4%
P/E Ratio	14.5	14.0	13.3	12.7
Target Price at the end of 2028 (Based on 13x Forward P/E)				169.9
Potential upside				10.1%
Source: Bloomberg Finance L.P., iFAST Compilations Date as of 26 August 2026.

Declaration:

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold a NIL position in the abovementioned securities. 

This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.