Labubu blockbuster ambitions have an M&A solution

By Ka Sing Chan

HONG KONG, Dec 22 (Reuters Breakingviews) - Labubu has a growth problem. Parent Pop Mart’s 9992.HK falling share price has upped the pressure to milk its toothy plush doll’s viral success. With a market value of $37 billion in early December, the company wants to imitate Walt Disney DIS.N, but making movies or running theme parks can be hit or miss. Buying a domestic studio like the struggling Huayi Brothers would be a better way into show business.

Pop Mart began life by selling figurines in a so-called blind box, so customers wouldn’t know what they had bought until unwrapping it. The global success of one of the collectibles, Labubu, turned the 15-year-old toymaker into one of the most-watched stocks of 2025. Its share price more than tripled in the first eight months of the year, and the company joined Hong Kong’s benchmark index. By the end of November, though, it was 33% below its peak.

Sales of its hairy monsters contributed 40% to its first-half revenue in 2025, driving earnings 300% higher year-on-year. Yet the concern is that Labubu might be a one-hit wonder for Pop Mart with a limited shelf life.

The company is feeling the pressure. Chief Operating Officer Si De told Reuters in an interview in September that it is turning to Disney’s playbook in order to milk its intellectual property over the longer term. That seemed to be an unsubtle hint that Pop Mart would develop its own movies and theme parks – and in November the Hollywood Reporter wrote that Sony Pictures had agreed to make a Labubu film. Such blockbuster investments can be hit or miss. Developing theme parks can be riskier. Dalian Wanda and Huayi Brothers, which a decade ago were China’s biggest commercial landlord and movie producer, respectively, had separately stated ambitions to take on the Mouse House. Both are now financially troubled, as the property downturn that started in 2020 hit their theme park businesses.

That’s an opportunity for Pop Mart. Huayi Brothers’ market value in early December, for example, was less than $1 billion after a 95% plunge in its Shenzhen-listed shares since 2015. Buying it would immediately add some of the showbiz expertise Pop Mart lacks. Even after its own stock-market slide, the mooted acquirer could easily make an all-share offer, splash some of its cash – which stood at $1.7 billion at the end of June – or borrow from undoubtedly willing state banks, or a combination of the three. That could be a smarter way to follow Mickey Mouse’s lead.

This is a Reuters Breakingviews prediction for 2026.

Pop Mart’s cash position has been strengthening