Shares of Chinese toymaker Pop Mart rallied nearly 10 per cent on Tuesday morning after the company announced its first share buy-back in nearly two years, following a decline from last year’s peak.
Pop Mart’s Hong Kong-listed shares rose to HK$198.70 as investors welcomed the move.
The stock remains below last year’s closing level of HK$200.20, and about 42 per cent off its August peak, suggesting softer momentum amid fierce competition and sluggish consumption.
The company repurchased 1.4 million shares for a total of HK$251 million (US$32 million) on Monday, according to an exchange filing. The shares were bought at prices ranging from HK$177.70 to HK$181.20.
“Pop Mart’s share buy-back signals management’s confidence and a healthy balance sheet,” said Wang Qi, chief investment officer at UOB Kay Hian’s private wealth management division in Hong Kong. With over 13 billion yuan (US$1.8 billion) in cash, the company had ample room for such initiatives to enhance shareholder returns, Wang added.
The Beijing-based toymaker is famous for selling “blind boxes”, which hide their content in opaque packaging. Its most popular product is Labubu, an elfin figure with a toothy grin embraced by celebrities from Lisa of girl band Blackpink to US singer Rihanna and influencer Kim Kardashian.
