By Sherry Qin


Pop Mart launched a massive buyback to buoy investor confidence following a record stock plunge fueled by worries about the toy maker's reliance on Labubus for growth, helping shares stabilize on Friday.

The Chinese toy maker bought back 3.9 million shares for HK$599.7 million, equivalent to US$76.6 million, on Thursday, according to an exchange filing. The single-day stock repurchase--the company's third this year--was its largest ever, according to data compiled by Wind Information.

The move came after investors drove the company's Hong Kong-listed shares 31% lower over two days despite strong annual results, wiping out more than US$11 billion off its market capitalization, unconvinced that the toy maker can keep churning out hits to sustain its rapid growth.

Shares were recently 0.9% higher at 152 Hong Kong dollars on Friday, though the stock remains on track for its worst week ever.

Morningstar viewed the buyback as mildly supportive of Pop Mart's valuation, given that the repurchase prices were meaningfully below the stock's estimated fair value. However, that doesn't address investors' concerns about slowing earnings growth, analyst Jeff Zhang said.

Those concerns have been reflected in Pop Mart's share price, which has lost more than half of its value since hitting a peak of HK$335.40 in August.

To support a flagging stock, Pop Mart has had to step up its buyback efforts recently, repurchasing 5.84 million shares for HK$947.6 million so far this year.

Some more convincing might be needed. With the Labubu hype waning, investors are wondering if the company can find the next blockbuster product.

Earlier this week, Pop Mart released stellar results, with net profit quadrupling and revenue nearly tripling last year, but its overseas markets, which have been driving growth, recorded sequentially lower revenue in the fourth quarter.

The company also issued a revenue growth target of at least 20% for 2026, sharply below the more-than tripling of its top line last year.

That likely only added to concerns that its recent success is only a fad.

"Sustained international expansion and further diversification of its business will be more effective in underpinning Pop Mart's share price over time," Morningstar's Zhang said.


Write to Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

03-27-26 0155ET