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Author: Ye Zhen, Source: Wall Street News
The popular Labubu is nicknamed “the Maotai for young people”. So what are the differences and differences between the two?
Bank of America recently released a report, benchmarking this trendy toy IP with traditional liquor giants, trying to clarify whether it is the historical reenactment of the consumption cycle or a profound paradigm shift behind it.
Bank of America analysts Alice Ma, Chen Luo and Lucy Yu pointed out that although both are social currencies, Labubu’s social attributes are more based on the common interests and values of young groups, while Moutai’s social functions rely more on power and hierarchy relationships.This difference reflects the essential difference between “new consumption” and “traditional consumption”.
Bank of America pointed out that similar to Moutai, Pop Mart also faces the dual tests brought by IP cycle and investment attributes. If there is a long window between Labubu and the next popular IP, the company’s global growth may slow down.
In addition, the two major risks of regulation and market congestion cannot be ignored by investors.The report reminds that the current phenomenon of capital concentrating on the “new consumption” track is quite similar to the previous fund-grouping consumer blue-chip stocks represented by Moutai. The fragility of this crowded transaction may have a huge impact on valuation.
Bank of America maintains Pop Mart’s buy rating with a target price of HK$275.According to statistics, Pop Mart’s stock price has been from HK$34.4-283.4 in the past 52 weeks, and was close at HK$244.2 as of Monday.
Intergenerational differences in social currency
The Bank of America research team believes that although Labubu and Moutai both have social currency attributes, there are obvious generational differences.Moutai’s social functions are more reflected in the role of productivity tools as a “social/business lubricant”, while Labubu represents the younger generation’s pursuit of emotional value, providing consumers with an instant, delicate and affordable “dopamine” experience in the era of digital social media.
Analysts point out that in a digital world where consumers face “lack of meaning” and increasing pressure, Labubu hints that China is gradually changing from an investment-driven model to a consumption-driven model.Moutai is deeply rooted in Chinese traditional culture, and its globalization process is still in its early stages. Labubu, which is highly consistent with the global spirit of the times, has achieved significant global success.
Differences in social attributes: Moutai’s social attributes rely more on power and hierarchy systems, mainly serving business and other occasions; Labubu represents the younger generation’s social interaction based on interests and values, emphasizing emotional value and instant satisfaction.
Consumption motivation: Moutai can be used as a “productivity tool” (business lubricant), while Labubu meets the pursuit of emotional value and “dopamine” consumption in a digital social environment, reflecting China’s transformation trend from investment-driven to consumption-driven.
The process of globalization: Moutai is deeply rooted in Chinese traditional culture, and globalization is still in its early stages; Labubu has achieved remarkable success on a global scale and is in line with global trends.
Double-edged sword of IP cycle risk and investment attributes
While growing rapidly, Bank of America also pointed out similar challenges to Pop Mart and Moutai, namely the dual tests brought by the IP life cycle and product investment attributes.
Bank of America believes that it doesn’t matter whether Pop Mart’s net profit in 2025 is 8 billion yuan or 10 billion yuan, because it depends on the shipment speed of Labubu.Instead, it is important to balance recent growth and IP lifecycle.
IP life cycle risk: Moutai, which has a century-old historical accumulation and official endorsement, has proved its ability to travel through cycles.The history of Pop Mart and LABUBU is only 15 years and 10 years respectively, and the IP life cycle is still the core risk.
The report believes that as an IP platform, although Pop Mart’s diversified IP portfolio can diversify risks, LABUBU is crucial to its global success.If there is a long window between LABUBU and the next popular IP, its global growth may slow down.In addition, while driving growth, the “mainstreaming” of subcultures may also dilute LABUBU’s unique social identity, thereby alienating its core consumer groups.
Pros and cons of investment attributes: Moutai’s history shows that “investability” is a double-edged sword, a booster in an upward cycle and an amplifier in a downward cycle.
The report notes that Pop Mart is actively managing second-hand market prices to ensure its attractiveness to young consumers and to create a favorable environment for the release of new IPs and products.The recent decline in the second-hand price of the LABUBU plush toy series is seen as the result of Pop Mart’s active management of supply and demand dynamics.
Regulation and market congestion that cannot be ignored
The report finally emphasized that regulation and market sentiment are another two major risk factors that investors must face.
Regulatory risks: Moutai has always been affected by policies such as price control and anti-corruption campaigns.Similarly, Pop Mart is not in a regulatory vacuum.A recent article in the People’s Daily reminds of market-related risks.However, Bank of America analysts believe that as Pop Mart’s consumer group becomes increasingly diversified, “mainstreaming” has reduced its exposure to minors in the Chinese market.At the same time, the growing overseas business (which is expected to contribute more than half of the sales in 2025) will also help hedge the regulatory risks of a single market.But this risk may still have a negative impact on the company’s fundamentals or trigger “headline noise” that causes stock price fluctuations.
The fragility of “group-to-group” trading: Dominant “crowded trading” may occur in every cycle of the capital market.From 2016 to 2021, funds poured into consumer blue-chip stocks represented by Moutai, which is quite similar to the current “new consumption” track with Pop Mart as the focus.Changes in capital flows and positions may have a huge impact on valuation – Moutai’s forward price-earnings ratio was close to 60 times at the beginning of 2021, but now it is only 18-19 times.Although recent changes in capital flows have put some pressure on “new consumer” stocks such as Pop Mart, the report believes that in the context of scarcity of high-quality investment targets, this “crowding” situation may continue for some time.The real turning point may not come until a meaningful turning point appears in high-frequency data in overseas markets, or when China’s strong economic recovery provides investors with more options.
