Labubu Craze Crashes: Pop Mart Loses $13B in Brutal Post-Hype Meltdown

Pop Mart (PMRTY) just ran into a brick wall. After rocketing more than 180% year-to-date on the back of its celebrity-backed Labubu doll craze, the stock plunged nearly 9% in Hong Kong tradingits worst drop since April. The selloff came after JPMorgan downgraded the stock from overweight to neutral, flagging what it sees as stretched valuations and thinning near-term catalysts. While Pop Mart remains the top performer on the Hang Seng Index, analysts warned that any small stumblewhether in fundamentals or media buzzcould now have outsize downside. The stock is trading at nearly 23x forward earnings, a level JPMorgan believes is already priced for perfection.

That perfection, though, is starting to fray. Since peaking on August 26, Pop Mart has shed nearly $13 billion in market capabout a quarter of its value. JPMorgan analysts, led by Kevin Yin, lowered their December 2026 price target to HK$300, a 25% cut, citing lower visibility around upcoming product rollouts like new Labubu editions and interactive toys. While Pop Mart is banking on animation releases and fresh IP to sustain momentum, JPMorgan noted that those catalysts remain speculative for now. The resale premium on Labubu dolls is also fading fast in China's secondary markets, suggesting the air may be leaking out of the hype bubble.

Labubu fever had turned Pop Mart into one of Asia's most explosive trades of 2024, helped along by celebrity endorsements from names like Lisa (BlackPink) and David Beckham. The company's meteoric rise earned it inclusion in both the Hang Seng Index and the Hang Seng China Enterprises Index this month. But now that the stock is under heavier institutional scrutinyand the buy rating ratio has slipped to 91%, its lowest in a yearinvestors may be waking up to a tougher reality: without fresh fuel, this rally could be running on fumes.