3 6 Ke·2025-12-23 00:33Core Viewpoint - The scarcity of Pop Mart has diminished significantly due to a substantial increase in production capacity, leading to a wave of short-selling by institutions and a collective sell-off by previously profitable investors, resulting in a market value loss of HKD 197.2 billion since the stock peaked in late August [1][4]. Group 1: Stock Performance - As of December 19, Pop Mart's stock closed at HKD 192.9, down 0.16%, with a cumulative decline of 43.23% from its historical high of HKD 339.8 four months prior, equating to a market value evaporation of HKD 197.2 billion [1][4]. - On December 22, the stock rebounded by 4.61%, reaching HKD 200, with a total market value of HKD 271 billion [1]. - The stock's volatility has been accompanied by heightened emotional and controversial discussions among investors, contrasting with the more stable declines of other companies in the same sector [1][2]. Group 2: Investor Sentiment - Following the stock's decline, discussions among investors have surged, with debates centering on whether Pop Mart represents a bubble or a rational market correction [2]. - Investors have been actively assessing foot traffic and restocking in physical stores to determine whether to buy more shares or cut losses [2]. Group 3: Company Actions - Despite the stock's downturn, Pop Mart has not issued any statements or conducted buybacks, focusing instead on operational strategies, including the appointment of LVMH's former president for Greater China to its board [4]. - On December 19, Pop Mart announced the launch of a new product series priced at 79 yuan each, marking its second price increase since 2021 [4]. Group 4: Fund Activity - Data shows that the number of public funds holding Pop Mart shares peaked at 311 in Q2, with a total of 72.3 million shares, but dropped to 197 funds and 51.7 million shares by Q3, indicating a significant sell-off of 2.06 million shares and a 28.52% decrease in holding ratio [5]. Group 5: Short Selling - As the stock price fell, short-selling activities intensified, with Pop Mart leading the home appliance and goods sector in short-selling amounts, reaching HKD 341 million and a short-selling ratio of 21.47% on December 19 [7]. Group 6: Market Dynamics - The recent stock decline is attributed to a combination of "overdrawn expectations" and "reality gaps," with analysts noting that the stock's rise was based on high expectations that are now being corrected [8]. - The stock experienced a 17.25% drop in September, with market confidence in the scarcity premium of Pop Mart's IP beginning to wane [10]. - Despite a strong Q3 earnings report, the stock continued to decline by 16.94% in October, as the market adjusted its expectations [10]. Group 7: Future Outlook - Analysts predict a slowdown in sales growth for Pop Mart, with expectations for Q4 sales growth in the U.S. to drop below 500%, down from over 1200% in Q3 [11]. - Concerns have been raised about the sustainability of Pop Mart's business model as it transitions from explosive growth to a phase of sustainable growth, with warnings about the diminishing scarcity of its products [11][12]. - The company is taking steps to address these challenges by ceasing point redemption for discounts and focusing on content production to enhance its IP [16].