POP MART's Q1 Revenue Growth Significantly Exceeds Expectations with Strong Performance in China and the US, but US Credit Card Data Turns Negative in April

A sharp divergence between financial report data and high-frequency tracking indicators is pushing POP MART back to the forefront of the battle between bulls and bears.

On May 12, JPMorgan and Goldman Sachs released research updates on POP MART's Q1 performance and April high-frequency data, respectively. The former recorded results far exceeding expectations: overall Q1 revenue increased 75%-80% year-over-year, with the mainland China market doubling (+100%-105%) and the Americas market growing 55%-60% year-over-year. The latter presented a completely different picture—US credit card tracking data, long regarded by shorts as the "core basis for shorting POP MART," recorded only low single-digit positive growth in Q1, and plummeted in April with a year-over-year decline of approximately 43%, bringing the cumulative decline for Q2 to date to about 40%.

The huge gap between the financial report and credit card data raises a fundamental question: How much reference value does this high-frequency indicator actually have?

The Q1 results clearly indicate that credit card data systematically underestimates POP MART's true sales. However, the high base effect driven by the blockbuster success of the third Labubu plush toy series last year is now fully manifesting in Q2. The steep decline in April credit card data has become a potential risk signal that investors cannot ignore amidst the joy of strong Q1 performance.

Q1 Financial Report: Comprehensive Beat, China Doubles, Americas Shine Against the Trend

The highlight of the Q1 performance was the simultaneous beat of market expectations across multiple markets.

Overall revenue increased 75%-80% year-over-year, surpassing buy-side expectations. Breakdown by region: Mainland China surged 100%-105% year-over-year, with offline channels growing 75%-80% and online channels soaring 150%-155%; The Americas grew 55%-60% year-over-year; Europe and other regions grew 60%-65% year-over-year; Asia-Pacific grew 25%-30% year-over-year.

Notably, Goldman Sachs had previously predicted POP MART's overall Q1 sales growth at around 70%, making the actual figures significantly higher. Regarding the Americas market, the vast gap between the low single-digit growth shown by Q1 credit card tracking and the actual 55%-60% revenue increase directly illustrates structural defects in the coverage and accuracy of credit card data for the company's US market sales.

JPMorgan maintains an Overweight rating on POP MART with a target price of HKD 350, corresponding to approximately 24.5x predicted P/E for 2026 and 20.4x predicted P/E for 2027. During the company's Q1 earnings call, market focus centered on: updated full-year growth targets by region, progress on new IP product pipelines, and profit margin guidance for 2026.

April Credit Card Data: High Base Effect Hits, US Market Drops ~43% Year-Over-Year

The base effect is fully "biting."

According to Bloomberg credit card data, POP MART's US credit card sales fell approximately 43% year-over-year in April (March saw a year-over-year decline of about 46%), with a cumulative year-over-year decline of about 40% for Q2 to date. This continues the trend from Q1, which showed only low single-digit positive growth, but the decline has expanded significantly.

The core explanation lies in the high base from the same period last year: In Q2 2025, the third Labubu plush toy series became a massive hit, leading to a significant increase in supply volume and raising the comparison base. The blockbuster effect from that period has now become a heavy "burden" on this year's Q2 year-over-year data.

Several auxiliary indicators simultaneously confirm the phased cooling of the US market: The average resale price of Labubu in the US secondary market is discounted by about 54%; POP MART App monthly active users (MAU) in the US decreased month-over-month; and Google search trends in the US also showed a slight decline. In contrast, Google search trends in Europe and Southeast Asia remained generally stable, with Southeast Asia App MAU basically flat, indicating a clear divergence in overseas markets.

China Market: Strong Online Acceleration, but Secondary Market Premiums Continue to Narrow

Operational momentum in the Chinese market remains strong overall, but there are several marginal changes worth examining.

Combined sales from Tmall and Douyin flagship stores in April grew 96% year-over-year, accelerating further from March's 67%, corroborating the strong performance of the China business in the Q1 financial report. However, tracking data from the Douyin flagship store shows that while plush toy sales in April exceeded those in March, the run rate for May as of May 10 has lagged behind April.

The continued narrowing of secondary market premiums is a potential warning signal.

Major Labubu series currently trade at a discount of about 30%-40% in the secondary market. Although this has stabilized recently, it has widened compared to March; FIFA plush keychains have shifted from a premium to a discount of about 10%; the average price of the Twinkle Twinkle series has shifted from a low single-digit positive premium in March to a mid-single-digit negative premium; and IPs such as Molly, Crybaby, and Dimoo have also seen slight expansions in discounts. The narrowing of secondary premiums is often a leading indicator of marginal cooling in the popularity of core IPs.

Nevertheless, POP MART's efforts in ecosystem building continue to release positive signals. After completing upgrades and renovations, Beijing Pop Land sold out all tickets for the May Day holiday (May 1 to 4), with the average visitor stay extending from the previous 3-4 hours to over 6 hours. The company also launched a Labubu co-branded refrigerator, priced at RMB 5,999, limited to 999 units globally. A mid-single-digit percentage premium has already emerged in the Chinese secondary market.

Bull-Bear Debate: How to Correctly "Price" POP MART?

Q1 data has proven that US credit card tracking data has significant limitations in predicting POP MART's actual revenue. The divergence of tens of percentage points between the two may partly stem from blind spots in credit card data coverage regarding offline cash transactions, gift card consumption, and changes in channel structure.

However, even if credit card data systematically underestimates sales, its directional signals cannot be ignored. The approximately 43% year-over-year decline in April was mainly driven by the high base, but this pressure, combined with declining US consumer confidence—Goldman Sachs' US consumer team has lowered its forecast for growth in US consumers' disposable cash inflows for 2026 for the second time to +3.7% (from +4.2% in early April)—and shrinking consumer spending against the backdrop of tariffs, creates uncertainty about whether the US market can achieve positive revenue growth in Q2.

Regarding valuation, the divergence between the two top-tier institutions is highly pronounced: Goldman Sachs maintains a Neutral rating on POP MART with a target price of HKD 184, based on a 15x predicted P/E for 2027 discounted; JPMorgan gives an Overweight rating and a target price of HKD 350, nearly double the former.

The nearly doubled difference in target prices profoundly reflects the high divergence among institutional investors regarding the company's sustained growth potential and reasonable valuation—a divergence that is likely to persist for quite some time before the turning point of the base effect becomes clear.

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