Pop Mart Joins Hang Seng Index Blue Chip; New Mini Labubu Launch on Friday Poised to Be a Hit

TradingKey - On August 22, the Hang Seng Index Company announced its quarterly review results, with Pop Mart International (9992.HK) being included as a constituent stock of the Hang Seng Index, elevating it to blue-chip status. 

Pop Mart, long considered a frontrunner for inclusion, is now not only a newly minted blue-chip but also the first new consumer stock to enter the index.

Additionally, Pop Mart has been added to the Hang Seng China Enterprises Index, whereas J&T Express (1519.HK) has been removed. The Hang Seng Index also welcomed JD Logistics (2618.HK) and China Telecom (0728.HK), increasing the total number of constituents from 85 to 88. These changes will be effective after the market closes on September 5th, taking effect on September 8th.

Industry insiders were not surprised by Pop Mart's inclusion in the Hang Seng Index. Following the release of its FY2025H1 earnings, JP Morgan noted that Pop Mart remains a top choice in China’s consumer sector and anticipated its potential inclusion in the index. Nomura Securities stated that its addition to the index could serve as a strong positive catalyst for its stock price.

Cheung Chi Wai, co-director of Prudential Brokerage Ltd, mentioned that Pop Mart already met the criteria for blue-chip status due to its market capitalization and trading volume. However, given the recent 20% surge in Pop Mart’s stock price over five days driven by its robust financial results, he does not expect the index inclusion to trigger another sharp rally.

Bloomberg highlighted that the results of this quarterly review are closely watched as they serve as an important indicator of listed companies' performance in terms of market cap and trading volume. Since the Hang Seng Index is one of the world's best-performing major indices, Pop Mart’s inclusion is likely to attract investments from index funds.

Nonetheless, the key driver of stock price remains its fundamentals. Jefferies forecasts that Pop Mart's sales in the second half of the year could grow by 90%, leading to an annual growth of at least 130%. Given that the second half is typically a peak season, the net profit margin is expected to reach 35%. Based on these projections, Jefferies raised its target price from HKD 315 to HKD 358.2, maintaining a "buy" rating. Meanwhile, according to financial information website MarketWatch, the average target price set by analysts is HKD 372.

Furthermore, on August 22, Pop Mart officially launched a new mini version of its Labubu. In China, the online release is scheduled for August 28, with offline sales starting August 29. The product will also be available to global customers via Alibaba's AliExpress platform. CEO Wang Ning stated that this version of Labubu can be attached to bags or phones, and it is poised to become the next major hit. The company's stock price may continue to rise as a result.