Pop Mart’s second-half growth target looks difficult, sparking share selloff
Collectible toy brand Pop Mart International Group Ltd. (9992.HK) on Thursday reported its revenue rose 23.8% year-over-year to 17.17 billion yuan ($2.55 billion) in the first half of the year, while its net profit rose 10% to 5.04 billion yuan.
The Labubu toy maker reported a gross margin of 69.7%, down 0.6 percentage points from a year earlier. The squeeze was primarily driven by a shrinking contribution from higher-margin overseas sales, compounded by elevated raw material prices that inflated procurement costs.
Pop Mart Chairman and CEO Wang Ning said he expects the company to face heavier pressure in the second half of this year, noting a high probability that it will fall short of its 20% annual revenue growth target set at the beginning of the year.
Scrambling to cushion the blow of the anticipated shortfall, the company rolled out a plan to purchase between HK$2 billion and HK$5 billion of its stock over the next six months.
Shares of Pop Mart opened down 8% at HK$141.10 on Friday. The stock is down over 50% from its 52-week high.
By Lau Chi Hang
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