POP MART’s Two-Day “Darkest Hour”: People’s Daily Slams Blind Boxes, Morgan Stanley Removes Stock List as Scalpers Get Stuck with Labubu

TradingKey - In just two days, POP MART (9992.HK), the global trendsetter behind the sought-after Labubu collectibles, has faced a series of setbacks. The company’s stock fell more than 5% for two consecutive days, retreating from recent record highs. Unannounced restocking caused the resale value of its once-highly coveted Labubu toys to plummet by half, while official media criticized the blind box model, adding pressure on investor sentiment.

As of June 20, POP MART shares had fallen approximately 5% to HKD 236. The day before, the stock had already declined 5.33%.

POP MART Stock Price, Source: Yahoo Finance

An article published by the People’s Daily on June 20 pointed out that blind boxes and blind cards — marketed around the element of surprise — have become wildly popular among children and teenagers. 

However, the report criticized the business model as a “commercial trap” that encourages irrational consumption among minors. It called for stricter regulation, including detailed technical oversight, to govern the market.

Although the article did not specifically name POP MART, the company has been the most visible representative of the blind box craze due to the popularity of its Labubu IP, prompting an immediate reaction from capital markets.

On June 18, Morgan Stanley removed POP MART from its list of key stocks in China and Hong Kong without providing specific reasons.

Earlier in the month, Morgan Stanley had raised its price target for POP MART from HKD 224 to HKD 302, citing strong long-term growth potential. But it also noted that such performance may not be sustainable over the next few quarters.

Also on June 18, POP MART released a large number of new units through multiple official channels, quickly cooling off the previously intense scarcity-driven frenzy. On secondhand platforms, the average transaction price for full sets of Labubu dropped by 45%.

Analysts warned that POP MART faces risks of overvaluation and potential correction, with fluctuations in Labubu prices exposing the fragility of the collectible toy market.