The growth rate of shares of the Chinese toy manufacturer Pop Mart, known for its Labubu dolls, suddenly slowed down. The company lost nearly $13 billion in market capitalization, and its shares on the Hong Kong stock exchange declined by 9%. This is reported by Bloomberg.
This happened after the investment bank JPMorgan Chase & Co. downgraded Pop Mart shares, citing weak financial prospects and overestimation of value.
Although Pop Mart shares have shown impressive growth since the beginning of the year (over 180%), the market is reacting to the first signs of “cooling off”. JPMorgan analysts note that the popularity of toys, especially Labubu plush dolls, which have become a hit among Hollywood celebrities, is no longer so high. In secondary markets in China, the resale price is decreasing, indicating a decline in hype.
Forecasts for the future are also vague. Although Pop Mart plans to release new animated projects and toys before Christmas, analysts believe these catalysts are not strong enough to support the high share price.