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?

On March 26, Pop Mart (09992.HK) experienced another sharp decline, with intraday drops exceeding 10%. Yesterday (March 25), the stock fell 22.51% for the day, marking a rare single-day decline since its listing on the Hong Kong Stock Exchange.

According to statistics, by the end of Q4 2025, 108 active funds held large positions in Pop Mart, with 16 funds having Pop Mart as their top holding. However, based on the net value changes on March 25, although these funds generally showed negative returns, their drawdowns were small, with a maximum decline of only 1.83%, and some less than 0.1%. There are clear signs of portfolio adjustments and stock switching.

In fact, Pop Mart’s 2025 financial report shows excellent performance, but industry concerns remain about its heavy reliance on a single IP. Meanwhile, recent Hong Kong Stock Connect trading data indicates that southbound funds continue to net buy this stock.

Pop Mart Faces “Sell-Off” Wave Again, Declines Exceed 30% in Recent Days

On March 26, Pop Mart opened with another large sell order, with intraday declines exceeding 10%. Yesterday, the stock closed down 22.51%, marking the largest single-day drop since its listing on HKEX.

Of course, this is not the first time Pop Mart’s stock price has plummeted since its listing. Compared to previous declines, the market’s view this time has shifted back to concerns over growth potential. According to the 2025 financial disclosures, the company’s revenue grew by 184.7% year-over-year that year. So why does the capital market remain cautious?

An industry insider told the “Daily Economic News” on March 26 that the company’s main business—popularly known as “blind boxes”—is well-loved by its audience. It also has hit phenomena IPs like LABUBU. But beyond that, the company’s business scope is quite limited. This is a key reason industry players worry about its future growth. Market analysis suggests that over-reliance on a single blockbuster IP can raise concerns about the company’s growth ceiling.

In the early days of its listing, many primary market investors were worried about the red ocean retail model of trendy toys, especially since Pop Mart lacked heavyweight IPs and was considered overvalued at the time. Between 2021 and 2022, Pop Mart’s stock price fell from about HKD 104.78 to HKD 9.77.

Later, as the company’s performance improved and product popularity surged, its stock price began to rise significantly in 2024. However, this also led to increasing divergence among investors. Wind data shows that from early March 2024 to late August 2025, although the stock price increased tenfold, it also experienced multiple sharp corrections, with several days seeing declines over 5%, and the largest single-day drop reaching 21.96%.

Nevertheless, industry insiders believe that Pop Mart remains a scarce consumer stock in the eyes of foreign investors, thus continuing to attract market attention. With the explosion of AI technology, market investment styles are shifting, and the value of such new consumer stocks is being reshaped again.

Some insiders admit, “From the market’s expectations, the company’s growth rate has not yet reached the level of phenomena IPs like LABUBU, which cannot be replicated. Future profitability is uncertain.” Others note, “The company’s performance is below market expectations, and with structural revenue imbalance, market feedback is clear.” Under the pressures of valuation, performance, and market style, a further “sell-off” in Pop Mart’s stock seems predictable.

Major Funds Hold Firm Amid Drawdowns, Clear Signs of Portfolio Rebalancing

Contrasting sharply with the sharp decline in stock price, major public funds that held large positions in Pop Mart have not shown significant withdrawals recently. Their performance, especially among active funds, remains relatively stable, with clear signs of portfolio adjustments.

For example, Minsheng JiaYin Value Discovery Fund’s Q4 report last year showed it held 130,500 shares of Pop Mart, with a market value of HKD 22.13 million at quarter-end, making it the fund’s largest holding. On March 25, despite the stock falling 22.51%, the fund’s Class A units’ net value only declined by 0.08%.

Similarly, Yinhua Digital Economy was also a top holding at the end of Q4 last year, with its market value ranking first. On the previous day, its Class A units only fell 0.16%. Notably, among funds that listed Pop Mart as their top holding at the end of last year, the maximum net value decline on March 25 was only 1.83%.

It’s clear that as buy-side institutions, especially active fund managers, have adopted a defensive investment strategy toward Pop Mart.

Meanwhile, sell-side analysts remain optimistic about its valuation prospects. Huaxi Securities (002926) highlighted the long-term value of its IP incubation platform. Pudong International Securities even stated that Pop Mart’s valuation is severely undervalued, and the recent sharp correction presents a good buying opportunity.

Are They Buying More on Dips? Southbound Funds Net Buy Pop Mart Recently

Despite the defensive stance of public funds, it’s worth noting whether investors are willing to re-enter the stock amid its sharp decline. Data shows that, even as Pop Mart’s stock price plunged, southbound funds have been net buyers.

According to Hong Kong Stock Exchange data, on March 24, the Shenzhen-Hong Kong Stock Connect recorded a net purchase of HKD 905 million worth of Pop Mart shares, with a net sale of HKD 257 million.

On March 25, among the top ten most active securities in the Shanghai-Hong Kong Stock Connect, Pop Mart had a trading volume of HKD 9.64 billion, with a net buy of HKD 5.516 billion and net sell of HKD 4.124 billion. Similarly, in the top ten in the Shenzhen-Hong Kong Stock Connect, it was the largest traded stock that day, with a net buy of HKD 3.267 billion and net sell of HKD 2.35 billion.

Top 10 Active Securities in Shanghai-Hong Kong Stock Connect as of March 25, Source: HKEX

Top 10 Active Securities in Shenzhen-Hong Kong Stock Connect as of March 25, Source: HKEX

Market analysts suggest that the investment value of Pop Mart depends on balancing “consumer attributes” and “IP attributes.” On one hand, the company has demonstrated strong capabilities in product design, channel operation, and user engagement, generating solid cash flow, making it a high-quality new consumer retail enterprise.

On the other hand, its IP system is still evolving. Compared to content-rich platform companies, its ability in content depth and cross-media development still has room for improvement. This means its valuation center may not sustain a high level comparable to pure IP companies over the long term.

Therefore, market pricing is shifting from “storytelling” to “performance-based valuation.” If Pop Mart can continue to develop IPs with lifecycle value and expand into broader content areas, its valuation could rise again. Conversely, if growth continues to rely on single blockbuster IPs or blind box sales, it is more likely to be valued as a consumer retail company with a relatively stable but limited valuation level.

As of the time of writing, the Hong Kong stock price of Pop Mart is HKD 149.20, with a maximum intraday decline of 11.82%.