Pop Mart drops over 30% in two days, heavy-positioned funds adjust their holdings in advance, while southbound funds continue to buy against the trend?

Ask AI · How should heavily invested funds respond in advance to stock price volatility risks?

Reporter: Ren Fei Editor: Xiao Ruidong

On March 26, Pop Mart (09992.HK) experienced another significant drop, with intraday losses exceeding 10% at one point. Yesterday (March 25), the stock’s total decline reached 22.51%, marking a rare single-day drop since its listing on the Hong Kong Stock Exchange.

According to statistics, as of the end of the fourth quarter of 2025, 108 actively managed funds held significant positions in Pop Mart, with 16 funds listing Pop Mart as their largest holding. However, based on the net value fluctuations on March 25, although these funds generally showed negative returns, the retracement was relatively small, with the maximum drop only 1.83%, and some experiencing declines of less than 0.1%, indicating a clear trend of portfolio rebalancing.

In fact, Pop Mart’s performance report for 2025 is outstanding, but there are concerns within the industry regarding its heavy reliance on a single IP. Recent trading data from the Hong Kong Stock Connect suggests that northbound capital continues to net buy the stock.

Pop Mart encounters another “price drop” crisis, with declines exceeding 30% in the past two days.

On March 26, Pop Mart opened to heavy selling, with intraday losses once again exceeding 10%. Just yesterday, the stock closed with a total decline of 22.51%, setting a record for its largest single-day drop since its debut on the Hong Kong Stock Exchange.

Of course, this is not the first time Pop Mart’s stock has faced a sharp decline since its listing; compared to previous downturns, the market’s view on this drop has once again returned to concerns about growth potential. According to the disclosed data from the 2025 financial report, the company’s revenue growth rate for that year reached 184.7%, yet why is capital not optimistic?

An investor in the industry expressed to a reporter from the Daily Economic News on March 26 that the company’s main business is well-loved by its audience, especially the well-known “blind boxes,” and there are phenomenon-level IPs like LABUBU that have gone viral, but aside from that, the company’s business reach is severely lacking. This is a focal point of industry concerns regarding its future performance growth. Market analysis indicates that the extreme reliance on a single hit IP raises concerns about the limits of its performance growth.

In fact, early in Pop Mart’s listing, many investors in the primary market expressed concerns about its red ocean retail model for trendy toys, especially since Pop Mart was considered overvalued at that time due to a lack of heavyweight IPs. From 2021 to 2022, Pop Mart’s stock price fell from approximately 104.78 HKD to 9.77 HKD.

Subsequently, the company turned its performance around and increased product popularity, with its stock price experiencing a significant rise starting in 2024, but at the same time, capital divergence became increasingly evident. Data from Wind shows that from early March 2024 to the end of August 2025, although its stock price rose tenfold, it also experienced multiple substantial corrections, with several trading days seeing declines exceeding 5%, and at one point, it dropped 21.96% in a single day.

However, industry insiders believe that Pop Mart is viewed as a scarce consumer stock by foreign investors, and thus its stock price continues to garner market attention. With the explosion of AI technology, market investment styles are switching, and the value of such new consumer stocks is being reshaped once again.

Some industry insiders candidly state, “From the market’s expectations, the company’s performance growth has not yet been achieved; phenomenon-level IPs like LABUBU cannot be replicated, raising doubts about future profitability.” Other interviewees noted, “The company’s performance differs from market expectations, coupled with a structurally imbalanced revenue structure, leading to clear market feedback.” It is evident that under the triple pressures of valuation, performance, and market style, Pop Mart’s stock price encountering another “price drop” seems to be anticipated.

Heavily invested funds withstand retracement pressure, showing clear signs of portfolio rebalancing.

In stark contrast to the sharp decline in stock prices, public funds that previously held significant positions in Pop Mart, especially many actively managed products, have not shown significant retracement in performance in recent days, and clear signs of portfolio rebalancing are evident.

Taking Minsheng and Yin’s Value Discovery Fund as an example, last year’s fourth-quarter report showed that the fund held 130,500 shares of Pop Mart, with a market value of 22.1315 million HKD at the end of the quarter, making it the fund’s largest holding. On March 25, amidst a 22.51% drop in the stock, the net value of the fund’s Class A shares fell by only 0.08%.

Coincidentally, Yinhua Digital Economy was also a product heavily invested in Pop Mart at the end of last year’s fourth quarter, with its market value also ranking as the largest holding at the end of the quarter, and the fund’s Class A shares saw a decline of only 0.16% yesterday. It is noteworthy that among the actively managed funds that listed Pop Mart as their largest holding at the end of last year’s fourth quarter, the maximum net value drop on March 25 was only 1.83%.

It is clear that as buy-side institutions, public funds, particularly active fund managers, have shifted their investment strategy in Pop Mart to a defensive stance.

On the other hand, the sell-side market holds a generally optimistic outlook on Pop Mart’s future valuation performance. Huaxi Securities’ research report analysis points to optimism regarding the long-term value of its IP incubation platform. Puyin International further noted that Pop Mart’s valuation is severely underestimated, and the recent sharp stock price correction presents a good buying opportunity.

Buy more as prices drop? Southbound capital has recently net bought Pop Mart.

Of course, even if public institutions are rebalancing defensively, whether they are willing to regain their positions amidst falling stock prices is worth noting. The reporter observed that although Pop Mart’s stock price has recently dropped significantly, southbound capital has shown a clear net buying trend.

According to data disclosed by the Hong Kong Stock Exchange regarding the Shanghai and Shenzhen-Hong Kong Stock Connect, on March 24, data from the Shenzhen-Hong Kong Stock Connect indicated that the amount bought through the connect was 905 million HKD, while the amount sold was 257 million HKD.

On March 25, among the top ten most actively traded securities in the Shanghai-Hong Kong Stock Connect, Pop Mart ranked first with a trading volume of 9.64 billion HKD, with a buying amount of 5.516 billion HKD and a selling amount of 4.124 billion HKD; from the top ten most actively traded securities in the Shenzhen-Hong Kong Stock Connect, Pop Mart was also the largest trading target of the day, with a buying amount of 3.267 billion HKD and a selling amount of 2.350 billion HKD.

Top ten active securities before March 25 in the Shanghai-Hong Kong Stock Connect, source: Hong Kong Stock Exchange

Top ten active securities before March 25 in the Shenzhen-Hong Kong Stock Connect, source: Hong Kong Stock Exchange

Regarding how to view the investment value of Pop Mart, market analysis indicates that the investment value of Pop Mart needs to find a balance between its “consumer attributes” and “IP attributes.” On one hand, the company has proven its capabilities in product design, channel operation, and user operation, possessing a strong cash flow generation ability, essentially making it a high-quality new consumer retail enterprise.

On the other hand, its IP system is still evolving. Compared to some platform companies with content production ecosystems, its capabilities in content depth and cross-media development still have room for improvement, which also means that its valuation center may struggle to maintain a high level akin to pure IP companies in the long term.

Therefore, the market’s pricing of Pop Mart is shifting from “telling stories” to “looking for realization.” If it can continue to launch IPs with lifecycles and gradually expand into broader content areas, its valuation is expected to receive another boost; conversely, if growth continues to rely on single hit products or blind box sales, it is more likely to be anchored as a consumer retail company, enjoying a relatively stable but limited valuation level.

As of the time of publication, Pop Mart’s stock price on the Hong Kong market was at 149.20 HKD, with an intraday decline reaching a maximum of 11.82%.

Daily Economic News