A shareholder's perspective on POP MART's latest earnings drew a notable response from veteran investor Duan Yongping. When asked on the evening of August 20 about the company's 2026 semi-annual results, he remarked, "Don't you like it? As a shareholder, I actually feel quite good about it." Chairman Wang Ning also acknowledged the challenging environment in his opening remarks, stating, "There were many difficulties and challenges in the first half that we hadn't anticipated, but we still delivered results that I find reasonably satisfactory."
During the first half of 2026, POP MART generated revenue of RMB 17.17 billion, representing a 23.8% year-on-year increase, while adjusted net profit reached RMB 5.16 billion, up 9.5%. For most consumer companies, this would still be considered a solid growth report. However, POP MART had just experienced an exceptionally rapid 2025. Compared to last year's frequently doubling revenue growth, the first half of this year saw not only a significant slowdown in revenue momentum but also a dip in gross margin from 70.3% to 69.7%.
Wang Ning candidly shared during the earnings call that the difficulties encountered this year have been greater than initially anticipated, with even more pressure expected in the second half. He indicated that the 20% growth target set at the beginning of the year would likely not be achieved. The market reaction was swift, with POP MART shares opening down over 8% on August 21 before recovering to a 3.84% decline by 11 AM. Yet Duan Yongping's focus appears to be on factors beyond quarterly expectations. "I don't care about mass market expectations, only about where the company is headed in the future—otherwise, how would I make money?" he reasoned, emphasizing that his assessment centers on the company's business model and corporate culture.
Just days earlier, Duan had advised a 40-year-old investor facing potential career upheaval with HK$40 million in hand, suggesting, "Split it between Moutai and POP MART, don't touch it, don't go on Xueqiu, and don't worry about what others earn." This marks a significant evolution from the Duan Yongping who, over a year ago, admitted he "couldn't understand POP MART." His growing confidence in the business stems from an analogy drawn from his familiarity with gaming: virtual skins that offer no statistical advantages still command high prices and strong demand, leading him to conclude, "Emotional value is genuinely interesting." After viewing recent fan photos, he observed, "POP MART products shouldn't be examined too closely, or you'll easily fall down the rabbit hole."
The semi-annual report provides fresh insights into POP MART's business model, particularly its ability to continuously discover, operate, and amplify IPs beyond a single hit. While LABUBU remained the top-grossing IP with RMB 4.45 billion in first-half sales, THE MONSTERS overall revenue saw a year-on-year decline, with its revenue share dropping from 34.7% to 26%. Meanwhile, Xingxingren surged to RMB 2.65 billion in revenue, up 580.6% year-on-year, now representing 15.4% of total revenue. Six IPs surpassed RMB 1 billion in revenue during the period, with eleven exceeding RMB 100 million, indicating a reduced concentration on any single IP compared to the previous year.
Wang Ning emphasized this point repeatedly, noting that while last year's numbers were impressive, they somewhat masked underlying issues—stores plagued by sellouts, frenzied buying, and long queues were not, in his view, a sustainable normal state. This year is therefore designated as an "adjustment year," where sales are not the primary objective. When asked directly, he affirmed, "If you ask whether the company has become healthier, I believe it has." The overseas operations represent the most visible manifestation of this transition. In 2025, POP MART's international revenue reached RMB 16.27 billion, a 291.9% surge that accounted for 43.8% of group revenue, with overseas store count jumping by 95 to 185.
After visiting POP MART stores at Westfield and other locations across Hong Kong, Osaka, Tokyo, Los Angeles, and San Jose, Duan Yongping declared, "I'm starting to think POP MART might be the pioneer of Chinese product internationalization." He particularly praised the company's site selection capabilities, calling it "a major crocodile in POP MART's moat." However, the latest report shows Asia-Pacific revenue declined 9.7% year-on-year, Americas fell 16.5%, with overseas online sales experiencing especially sharp pullbacks. Management devoted considerable time during the call to discussing overseas store locations, merchandise forecasting, warehousing, logistics, local teams, and supply chain issues. While POP MART has proven Chinese original IPs can win global consumers, how this business model continues to function across different markets as traffic normalizes remains a key question. Both companies and investments require time. As Duan put it, "I probably won't sell within 10 years."
Addressing recent speculation about his holdings, Duan clarified on August 13 that he has not actively sold POP MART shares; some position changes resulted from options strategies involving puts and calls. He stated he has no specific timeline or price target for selling, perhaps for a very long time, adding, "At current levels, I believe POP MART is not expensive for the long term; the short term is unknown." Wang Ning provided a concrete signal of confidence during the August 20 call, announcing a share buyback plan of RMB 2 billion to RMB 5 billion over the next six months. As growth slows, it becomes clearer what lies beneath the surface beyond viral hits. Here are the key takeaways from Wang Ning's exchange with investors during the call.
Regarding the full-year revenue outlook, LABUBU's global marketing initiatives including World Cup promotions, and the future direction of the IP, Wang Ning explained that this year is defined as an "adjustment year" where sales are not the primary objective. He acknowledged that last year's rapid growth came with luck and unexpected traffic but also exposed internal management issues. The company is prioritizing long-term development over aggressive sales tactics, having faced more difficulties in the first half than initially projected due to global economic and geopolitical headwinds. Despite achieving over 20% growth in the first half, the high comparison base from last year's third quarter suggests greater pressure ahead, making the full-year 20% target unlikely. He emphasized that the company is healthier than last year, noting LABUBU's revenue contribution has already fallen to around 25% of total, reflecting a more balanced IP portfolio. While overseas online sales have declined significantly year-on-year, the Chinese market maintains over 40% growth, and physical stores remain the foundation of international operations. The renovated theme park has exceeded expectations, and the company continues to invest in brand elevation globally. He announced the share buyback plan as a testament to confidence in long-term development, even while acknowledging near-term challenges.
On the progress of the operational adjustment year, including overseas adjustments and China market potential, Wang Ning reflected that last year's "one beauty covers a hundred blemishes" masked operational issues. Customer experiences of sellouts, panic buying, and long queues were not considered normal. The company has been systematically addressing supply chain, store operations, and personnel management issues across regions. He stressed the importance of "respecting time and respecting operations," acknowledging that many operational details require patient, gradual resolution.
Discussing organizational changes, the most significant being the unification of four regional divisions under a single mid-platform management structure, Wang Ning explained that the company's stage has evolved beyond the "0-1" phase. The focus now is on creating a globally unified brand experience, including consistent service systems and store operations details. While some issues have improved with the centralization, new challenges have emerged, particularly around global supply chain complexity, geopolitical uncertainties, and lengthening logistics cycles. Despite the overseas year-on-year decline, comparing against 2023 and 2024 baselines shows healthy, stable development with maintained profit margins. He acknowledged that while overseas regional teams are relatively complete, talent pipelines remain insufficient, requiring continued support and development.
When asked about future IP and brand strategy priorities, plus dessert business progress and synergies, Wang Ning stated the company aims to become a comprehensive IP platform, strengthening its capability to continuously produce and operate quality IPs. While LABUBU's impact on overseas was significant, the Chinese market's solid foundation allowed Xingxingren to grow rapidly. He doesn't view LABUBU's recent fluctuations negatively, noting that all IP companies experience cycles tied to content release rhythms. The platform is becoming more robust and healthy, with growing confidence in IP operations. New businesses like dessert, incubated from the theme park and expanded to offline locations, are performing better than internal expectations, as is the renovated park.
Addressing the evolution from "useless use" philosophy to functional products and films, plus design innovation amid mixed LABUBU reviews, Wang Ning clarified that the original "useless use" concept emphasized intrinsic product value rather than rejecting functionality. As design resources strengthen with more artists and IPs, the company generates "design overflow" that can be applied across categories, either through licensing or in-house development. Regarding LABUBU new product reviews, he suggested evaluating each generation against its own merits rather than comparing to particularly successful predecessors. The Retro Barber Shop series, which involves consumer participation in design, exemplifies ongoing innovation efforts.
On the theme park's new area performance, inventory health, and production adjustments, Wang Ning reported that visitor traffic doubled month-on-month and grew nearly 40% year-on-year after the new area opened, with over 25% of visitors coming for night experiences. He personally visited frequently over the past two weeks, finding the nighttime atmosphere closely matching original visions, sometimes exceeding them. While queue times remain an issue during peak periods, the company is studying ways to optimize visitor flow. Seasonal considerations for Beijing's climate require ongoing operational planning. The park delivers significant long-term brand value, transforming visitors' understanding of POP MART. Future plans include further renovations, with Pop Street scheduled for a complete overhaul next year and concept design underway for Phase 2, which will incorporate new IPs.
Regarding IP portfolio balance, overseas potential, and store strategies, Wang Ning highlighted that SKULLPANDA and HIRONO perform strongly in China and Asia but excel particularly in Western markets, often ranking second or third and sometimes reaching first. Western consumers show preference for designs with emotional depth and thoughtfulness beyond mere cuteness. Nyota has demonstrated strong performance across markets, with a recent German signing event exceeding expectations. Peach Riot is gaining traction in Western markets with upcoming design releases and online content to deepen consumer engagement. Xingxingren leads in China and Asia but requires more work in Western markets. CRYBABY has more initiatives planned, and MOLLY will see breakthrough designs by year-end or early next year. The overseas strategy prioritizes quality over quantity, with stricter standards on location, size, and commercial terms—the company will wait rather than compromise. Store opening pace won't slow dramatically, but conditions will be more rigorously evaluated. In mature markets like Asia-Pacific, more effort will go into store renovations and relocations.
The company acknowledges that this year's difficulties exceed initial expectations, yet maintains that prioritizing long-term health over short-term targets is the correct approach. The buyback plan signals management's conviction in the company's trajectory, while the diversified IP portfolio and global expansion strategy aim to deliver more stable growth across different markets and product combinations.