Bank of America believes that while Labubu and Moutai both possess social currency attributes, there are significant generational differences.
Written by: Ye Zhen
Source: Wall Street News
The explosive Labubu is nicknamed "the Moutai of young people," so what are the similarities and differences between the two?
According to news from the Chasing Wind Trading Platform, Bank of America recently released a report comparing this trendy IP with traditional liquor giants, attempting to clarify whether it is a historical replay of the consumption cycle or a profound paradigm shift.
Bank of America analysts Alice Ma, Chen Luo, and Lucy Yu pointed out that although both are social coins, Labubu's social attributes are more based on the common interests and values of the younger demographic, while Maotai's social functions rely more on power and hierarchical relationships. This difference reflects the essential distinction between "new consumption" and "traditional consumption."
Bank of America pointed out that, similar to Moutai, Pop Mart also faces a dual test brought by the IP cycle and investment attributes. If there is a long gap between Labubu and the next hit IP, the company's global growth may slow down.
In addition, investors cannot ignore the two major risks of regulation and market congestion. The report warns that the current phenomenon of capital concentrating on the "new consumption" sector is quite similar to the previous trend of funds clustering around consumer blue-chip stocks represented by Moutai. The fragility of this crowded trading may have a huge impact on valuations.
Bank of America maintains a buy rating on Pop Mart with a target price of 275 HKD. According to statistics, Pop Mart's stock price has ranged from 34.4 to 283.4 HKD over the past 52 weeks, closing at 244.2 HKD on Monday.
Intergenerational Differences in Social Currency
The Bank of America research team believes that while Labubu and Moutai both possess social currency attributes, there are significant generational differences. The social function of Moutai is more reflected as a productivity tool serving as a "social/business lubricant," while Labubu represents the younger generation's pursuit of emotional value, providing consumers with immediate, nuanced, and affordable "dopamine" experiences in the digital social media era.
Analysts indicate that in a digital world where consumers face "meaninglessness" and increasing pressure, Labubu suggests that China is gradually shifting 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 the early stages, while Labubu, which aligns closely with the global zeitgeist, has already achieved significant global success.
Differences in social attributes: Moutai's social attributes rely more on power and hierarchical systems, primarily serving business occasions; Labubu represents the younger generation's socializing based on interests and values, emphasizing emotional value and instant gratification.
Consumption Motivation: Moutai can serve as a "productive tool" (business lubricant), while Labubu meets the young people's pursuit of emotional value and "dopamine" consumption in a digital social environment, reflecting China's trend of transformation from investment-driven to consumption-driven.
Globalization Process: Moutai is deeply rooted in traditional Chinese culture and is still in the early stages of globalization; Labubu, on the other hand, has achieved significant success globally, aligning with global trends.
The Double-Edged Sword of IP Cycle Risks and Investment Attributes
While experiencing rapid growth, American banks also pointed out the similar challenges faced by Bubble Mart and Moutai, namely the dual tests brought about by the IP life cycle and product investment attributes.
Bank of America believes that it doesn't matter whether Bubble Mart's net profit in 2025 is 8 billion or 10 billion yuan, as it depends on the shipping speed of Labubu. Instead, what is important is how to balance recent growth and the IP lifecycle.
IP lifecycle risk: Moutai, with its century-long history and official endorsement, has proven its ability to withstand cycles. In contrast, the histories of Pop Mart and LABUBU are only 15 years and 10 years, respectively, making the IP lifecycle a core risk.
The report suggests that as an IP platform, Pop Mart's diversified IP portfolio can mitigate risks, but LABUBU is crucial to its global success. If there is a prolonged gap between LABUBU and the next blockbuster IP, its global growth may slow down. Furthermore, the "mainstreaming" of subculture, while driving growth, may also dilute LABUBU's unique social identity, thereby alienating its core consumer group.
The pros and cons of investment properties: The history of Moutai indicates that "investability" is a double-edged sword, acting as a booster during upward cycles and becoming an amplifier during downward cycles.
The report noted that Pop Mart is actively managing second-hand market prices to ensure its appeal to young consumers and create a favorable environment for the release of new IP and products. The recent decline in the second-hand prices of the LABUBU plush toy series is seen as a result of Pop Mart's proactive management of supply and demand dynamics.
Unignorable Regulation and Market Congestion
The report emphasizes that regulation and market sentiment are two other risk factors that investors must face.
Regulatory risk: Moutai has always been affected by policies such as price controls and anti-corruption campaigns. Similarly, Pop Mart is not in a regulatory vacuum. A recent article in the People's Daily is a reminder of the risks associated with the market. However, Bank of America analysts believe that as Pop Mart's consumer base becomes increasingly diversified, "mainstreaming" has reduced its exposure to minors in the Chinese market. At the same time, growing overseas business, which is expected to account for more than half of sales in 2025, also helps to hedge against regulatory risks in the single market. However, this risk may still have a negative impact on the company's fundamentals or cause "headline noise" that can lead to stock price volatility.
The vulnerability of "crowded" trading: The capital market may experience dominant "crowded trades" in every cycle. The influx of funds into consumer blue-chip stocks, represented by Moutai from 2016 to 2021, is quite similar to the current concentration of funds in the "new consumption" sector, with Pop Mart as the focal point. Changes in capital flow and positions can have a huge impact on valuations—Moutai's forward P/E ratio was close to 60 times at the beginning of 2021, while it is currently only 18-19 times. Although recent changes in capital flows have put some pressure on "new consumption" stocks like Pop Mart, the report suggests that this "crowded" situation may continue for a while, given the scarcity of high-quality investment targets. The real turning point may only come when meaningful turning points appear in high-frequency data from overseas markets, or when a strong recovery in the Chinese economy provides more options for investors.
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Wall Street Talks LABUBU and Moutai: A Familiar Encounter or a Paradigm Shift?
Written by: Ye Zhen
Source: Wall Street News
The explosive Labubu is nicknamed "the Moutai of young people," so what are the similarities and differences between the two?
According to news from the Chasing Wind Trading Platform, Bank of America recently released a report comparing this trendy IP with traditional liquor giants, attempting to clarify whether it is a historical replay of the consumption cycle or a profound paradigm shift.
Bank of America analysts Alice Ma, Chen Luo, and Lucy Yu pointed out that although both are social coins, Labubu's social attributes are more based on the common interests and values of the younger demographic, while Maotai's social functions rely more on power and hierarchical relationships. This difference reflects the essential distinction between "new consumption" and "traditional consumption."
Bank of America pointed out that, similar to Moutai, Pop Mart also faces a dual test brought by the IP cycle and investment attributes. If there is a long gap between Labubu and the next hit IP, the company's global growth may slow down.
In addition, investors cannot ignore the two major risks of regulation and market congestion. The report warns that the current phenomenon of capital concentrating on the "new consumption" sector is quite similar to the previous trend of funds clustering around consumer blue-chip stocks represented by Moutai. The fragility of this crowded trading may have a huge impact on valuations.
Bank of America maintains a buy rating on Pop Mart with a target price of 275 HKD. According to statistics, Pop Mart's stock price has ranged from 34.4 to 283.4 HKD over the past 52 weeks, closing at 244.2 HKD on Monday.
Intergenerational Differences in Social Currency
The Bank of America research team believes that while Labubu and Moutai both possess social currency attributes, there are significant generational differences. The social function of Moutai is more reflected as a productivity tool serving as a "social/business lubricant," while Labubu represents the younger generation's pursuit of emotional value, providing consumers with immediate, nuanced, and affordable "dopamine" experiences in the digital social media era.
Analysts indicate that in a digital world where consumers face "meaninglessness" and increasing pressure, Labubu suggests that China is gradually shifting 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 the early stages, while Labubu, which aligns closely with the global zeitgeist, has already achieved significant global success.
The Double-Edged Sword of IP Cycle Risks and Investment Attributes
While experiencing rapid growth, American banks also pointed out the similar challenges faced by Bubble Mart and Moutai, namely the dual tests brought about by the IP life cycle and product investment attributes.
Bank of America believes that it doesn't matter whether Bubble Mart's net profit in 2025 is 8 billion or 10 billion yuan, as it depends on the shipping speed of Labubu. Instead, what is important is how to balance recent growth and the IP lifecycle.
IP lifecycle risk: Moutai, with its century-long history and official endorsement, has proven its ability to withstand cycles. In contrast, the histories of Pop Mart and LABUBU are only 15 years and 10 years, respectively, making the IP lifecycle a core risk.
The report suggests that as an IP platform, Pop Mart's diversified IP portfolio can mitigate risks, but LABUBU is crucial to its global success. If there is a prolonged gap between LABUBU and the next blockbuster IP, its global growth may slow down. Furthermore, the "mainstreaming" of subculture, while driving growth, may also dilute LABUBU's unique social identity, thereby alienating its core consumer group.
The pros and cons of investment properties: The history of Moutai indicates that "investability" is a double-edged sword, acting as a booster during upward cycles and becoming an amplifier during downward cycles.
The report noted that Pop Mart is actively managing second-hand market prices to ensure its appeal to young consumers and create a favorable environment for the release of new IP and products. The recent decline in the second-hand prices of the LABUBU plush toy series is seen as a result of Pop Mart's proactive management of supply and demand dynamics.
Unignorable Regulation and Market Congestion
The report emphasizes that regulation and market sentiment are two other risk factors that investors must face.
Regulatory risk: Moutai has always been affected by policies such as price controls and anti-corruption campaigns. Similarly, Pop Mart is not in a regulatory vacuum. A recent article in the People's Daily is a reminder of the risks associated with the market. However, Bank of America analysts believe that as Pop Mart's consumer base becomes increasingly diversified, "mainstreaming" has reduced its exposure to minors in the Chinese market. At the same time, growing overseas business, which is expected to account for more than half of sales in 2025, also helps to hedge against regulatory risks in the single market. However, this risk may still have a negative impact on the company's fundamentals or cause "headline noise" that can lead to stock price volatility.
The vulnerability of "crowded" trading: The capital market may experience dominant "crowded trades" in every cycle. The influx of funds into consumer blue-chip stocks, represented by Moutai from 2016 to 2021, is quite similar to the current concentration of funds in the "new consumption" sector, with Pop Mart as the focal point. Changes in capital flow and positions can have a huge impact on valuations—Moutai's forward P/E ratio was close to 60 times at the beginning of 2021, while it is currently only 18-19 times. Although recent changes in capital flows have put some pressure on "new consumption" stocks like Pop Mart, the report suggests that this "crowded" situation may continue for a while, given the scarcity of high-quality investment targets. The real turning point may only come when meaningful turning points appear in high-frequency data from overseas markets, or when a strong recovery in the Chinese economy provides more options for investors.