China’s Pop Mart to buy back shares worth up to US$740m as collectible-toy demand cools
Chinese toymaker Pop Mart International will launch a share buy-back plan worth up to 5 billion yuan (US$740 million) over the next six months, it said after the market closed on Thursday. The buy-back of between 2 billion yuan and 5 billion yuan comes amid softer domestic sales and normalising demand following last year’s strong performance, which was fuelled by blockbuster toy character Labubu.…
Hong Kong-listed toymaker Pop Mart International plans to repurchase up to 5 billion yuan (US$740 million) of shares over the next six months, according to a statement released after the market closed on Thursday. This buying back of shares comes after a decline in domestic sales and a return to normal demand following a strong performance in the previous year, driven by the popularity of the Labubu toy character.
Pop Mart's founder and CEO, Wang Ning, announced the share buyback plan during the company's interim-results earnings call. However, Wang expressed caution about the outlook, stating that the high base effect from the previous year's outstanding performance has put pressure on expectations for this year, particularly in the second half.
Pop Mart guided for a 20% revenue growth target for 2026 but now recognizes that this goal may be more difficult to achieve. The company has adjusted its priorities, with Wang stating that driving sales is no longer the top focus, and instead, corporate governance is showing positive momentum. In the first half of the year, Pop Mart reported revenue of 17.17 billion yuan, a 23.8% increase compared to the same period last year, and net profit rose by 10.14% to 5.04 billion yuan, according to its earnings report filed with the Hong Kong stock exchange.
Since launching its largest share buyback in 2022, the company has continuously increased shareholder returns through these initiatives. As of April, cumulative repurchases by Pop Mart totalled around HK$1.74 billion (US$222 million). The social media buzz surrounding Pop Mart has begun to fade, aligning with the decrease in secondary-market prices.
Sammi Xu, Deutsche Bank's head of China consumer discretionary research, noted that online sales of Pop Mart's products in China dropped another 21% year on year in July, despite the launch of Labubu 4.0 and new releases from other lines. This indicates that Pop Mart and the broader plush toy trend may be losing appeal among young consumers.
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