China Fortune Media | New Consumer Daily News October 30th (Researcher Liang Youyun), since the disclosure of Pop Mart's third-quarter report, the strong overseas performance growth has led many investment institutions to issue bullish opinions and increase their holdings, while the company's stock price has also reached a new high in recent years. However, on the second day after the disclosure of the third-quarter report, the Hong Kong Stock Exchange disclosed the notification of the collective shareholding reduction by Pop Mart's core executives.

Specifically, Wang Ning's GWF Holding reduced its holdings of Pop Mart by 10.85 million shares at a price of HK$71.98 per share through UBS Trustees (B.V.I.) Ltd., involving a total investment of approximately HK$0.781 billion. At the same time, Wang Ning holds 40.96% of the shares, while the company executives such as Yang Tao, Liu Ran, and Si De jointly established Pop Mart Hehuo Holding Limited and also reduced 10.85 million shares, realizing approximately HK$0.781 billion.

Centralized shareholding reduction situation in Hong Kong stock market

According to the calculation of the ultimate beneficiaries, through the two companies mentioned above, Wang Ning completed the reduction of 21.7 million shares, involving approximately HK$1.562 billion (equivalent to RMB 1.432 billion).

After a round of intensive shareholding reductions, Wang Ning's personal shareholding percentage in Pop Mart decreased from 50.34% to 48.73%. However, combined with other funds and subsidiary shareholdings, he still remains the absolute controlling shareholder of the company.

In addition to the executives of Pop Mart Hehuo reducing their shareholding for cash through Pop Mart Hehuo, the company's Chief Operating Officer, Si De, also individually reduced his shareholding by 2.1 million shares, cashing out 0.151 billion Hong Kong dollars (approximately RMB 0.139 billion). As the top 'hero' in the growth of this outbound business, Pop Mart's Overseas Business President Wen De also disclosed a reduction of 0.125 million shares, cashing out 8.9975 million Hong Kong dollars (approximately RMB 8.2541 million) in this round.

A comprehensive calculation shows that after the sharp rise in the third-quarter report, the collective reduction of Pop Mart executives amounts to 23.925 million shares, with a cash-out amount of approximately HK$1.7 billion (equivalent to RMB 1.559 billion).

The rapid reduction in shareholding in this round quickly impacted the upward trend of Pop Mart's stock price, leading to dissatisfaction expressed by many investors in the stock community. On October 24th, Pop Mart's Hong Kong stock price reached its highest point in nearly two years, closing at 76.619 Hong Kong dollars per share. After the executives completed their share sell-off, the company's stock price quickly experienced a steep decline, setting a new record for the largest single-day drop in the company's performance for the year, followed by continuous fluctuations.

As of the draft on October 30, Pop Mart's stock price has fallen by 5.68% from its peak, with the latest price closing at 71.7 Hong Kong dollars per share, below the price at which the collective shareholders sold their shares.

In the previous round, Wang Ning's personal share sell-off occurred in November 2021. At that time, Pop Mart's growth prospects and performance were questioned, causing the company's stock price to drop from its peak (105 Hong Kong dollars per share) to half (56.782 Hong Kong dollars per share). Wang Ning then sold 13.042 million shares at the peak, cashing in 0.74 billion Hong Kong dollars. When the company's stock price hit rock bottom in 2022, Wang Ning and Yang Tao increased their holdings significantly, but not to the extent of their previous sell-off.

It is worth noting that in addition to the concentrated sell-off at this high point, other executives of Pop Mart have also engaged in share sell-off activities within the year. He Yu, an investor at Black Ant Capital and an early investor in Pop Mart and the current non-executive director of the company, sold 2.0883 million shares at an average price of 32.32 Hong Kong dollars per share after the company's first significant rise in April this year, cashing in 67.4939 million Hong Kong dollars.

Similarly, Tu Zheng, also a non-executive director and an early investor in Pop Mart, completed two sell-offs in May and October this year, with a cumulative sell-off of 21 million shares, realizing 0.856 billion Hong Kong dollars, making it the second largest sell-off action by Pop Mart in the year.

Tu Zheng's share sell-off situation in May and October this year

However, looking at the trend of Pop Mart's stock this year, the overall impact of executives' shareholding reduction on the company's stock performance is limited.

Since the beginning of 2024, the stock price of Pop Mart in Hong Kong has accumulated a 249.9% increase. The current reason supporting the sharp rise in Pop Mart's stock price is the overseas performance exceeding expectations during the year. With the arrival of the peak season for overseas consumption in the fourth quarter, many investment institutions have given Pop Mart a buy rating.

Guosen Securities research reports indicate that in terms of pop mart's domestic business, by actively promoting IP and product diversification, conducting differentiated positioning and refined operation of channels, it has driven the growth of revenue in various channels on the mainland. The company's overseas operations have now entered a rapid development stage with a focus on the DTC model, strengthening the brand and IP influence by directly facing consumers. Regarding overseas offline business, the company opened multiple overseas stores in the third quarter, with the first stores in France, the Netherlands, and Italy combining local characteristics and IP receiving a warm welcome from consumers.

Meanwhile, Haitong International Securities research reports also suggest that pop mart's overseas business in Asia is strong, and expansion in Europe and America is accelerating. Currently, the company's overseas stores are mainly located in East Asia, Hong Kong, Macao, Taiwan, Japan, and South Korea, but expansion in Southeast Asia and Europe and America is gradually speeding up. The company plans to open 30-40 new stores in the second half of the year, far exceeding the 12 in the first half, with a focus on North America and Southeast Asian markets. With the continuous enhancement of pop mart's IP operation depth and breadth, both domestic and overseas businesses are expected to benefit.