Labubu maker Pop Mart shares rise; HSBC hikes target on strong outlook

Pop Mart International (HK:9992) shares gained after HSBC significantly hiked its price target to HK$331.5, citing robust overseas sales potential for its Labubu brand. HSBC increased its 2025 overseas revenue forecast by 34% to $2 billion, driven by Labubu's surging international popularity following celebrity endorsements. This bullish outlook, contributing to a 580% gain over the past year, contrasts with the stock's recent removal from Morgan Stanley's focus list and calls for increased regulation of the blind box model in China.

Analysis

Pop Mart International (HK:9992) is experiencing a significant upward re-rating driven by strong international growth prospects, as evidenced by HSBC's decision to hike its price target to HK$331.5 from HK$215.5. The core catalyst is the surging overseas popularity of its Labubu brand, leading HSBC to increase its 2025 overseas revenue forecast by 34% to $2 billion, which implies a dramatic 183% year-over-year growth. This bullish outlook is supported by the stock's powerful momentum, having risen 580% over the past 12 months and 177% year-to-date in 2025. However, investors should note the presence of significant counter-signals. The stock recently faced headwinds after Morgan Stanley removed it from its focus list, and a key regulatory risk is emerging from Chinese state media, which has called for tighter controls on the blind box business model, a foundational element of Pop Mart's commercial success.

Key Decisions for Investors

• Given the substantial upward revision in overseas revenue forecasts and strong brand momentum, investors may consider the stock's significant growth potential, though its 580% rally in the last year warrants caution regarding valuation.
• Monitor for any official policy announcements from Chinese regulators concerning the blind box industry, as this represents a primary risk to the company's domestic revenue model.
• The conflicting signals from HSBC's upgrade and Morgan Stanley's recent removal from its focus list suggest investors should prepare for potential volatility and closely watch institutional fund flows.