Labubu Maker Pop Mart Shares Fall On Demand Concern, Post-Hang Seng Entry Selling

Pop Mart International Group Ltd.’s shares tumbled, reflecting concerns over product demand for the Chinese toy maker and profit taking after the stock’s inclusion into two major indexes. 

The Labubu doll-producer’s Hong Kong-listed stock fell as much as 8.9%, the most in five months, as it became a member of the Hang Seng Index and the Hang Seng China Enterprises Index on Monday. 

Worries about Pop Mart’s outlook have surfaced since it launched a new mini Labubu doll late last month, following signs of weaker demand in the secondary market. Traders also pointed to selling pressure from investors hoping to cash in on the stock’s gains accumulated in the run-up to its index inclusion. 

“For Pop Mart’s products like Labubu, secondary market prices have been declining due to restocking and cooling demand for some series,” said Jeff Zhang, an analyst at Morningstar Inc. “Also, we note more negative feedback on the quality of new products, an issue that management needs to timely address.”