Shares of toymaker Pop Mart International Group Ltd. slumped the most since April on Monday after JPMorgan Chase & Co. downgraded the stock to neutral, citing a lack of catalysts and an unattractive valuation.
The stock slumped nearly 9% in Hong Kong to the lowest level in more than a month, as JPMorgan’s move added to concerns over the waning popularity of the company’s products. This follows some social media articles pointing to weak demand for the newly launched product ‘SKULLPANDA.’
"We believe the valuation is priced for perfection and any small fundamental miss/negative media reports (i.e. resale price drop and third-party licensing) might drive underperformance,” JPMorgan analysts including Kevin Yin wrote in a note.
The stock is trading at nearly 23 times its 12-month forward earnings estimate and is still up more than 180% year-to-date. - Bloomberg
