(Yicai) Aug. 21 -- Shares of Pop Mart International Group, the Chinese toymaker best known for its Labubu collectables, stumbled after Chief Executive Officer Wang Ning said the company could fall short of the 20 percent sales growth target it set for this year as overseas sales weaken.

After tumbling by as much as 8.8 percent in Hong Kong earlier today, Pop Mart [HKG: 9992] closed 3.1 percent lower at HKD149 (USD19) per share.

“We won’t adopt an aggressive strategy, so it’s possible that the company may not meet the 20 percent annual target set at the beginning of the year,” Wang, who founded Beijing-based Pop Mart in 2010, said on the company’s first-half earnings conference call.

“Although Pop Mart achieved growth of more than 20 percent in the first six months, the third quarter of last year had a very high comparison base,” Wang said. “This suggests that pressure in the second half will be greater than in the first half. But I believe the firm’s overall governance and health are much better than last year."

Revenue surged 24 percent to CNY17.1 billion (USD2.5 billion) in the six months ended June 30 from a year earlier, the company’s semi-annual report showed yesterday. But while income from the Chinese market soared 47 percent to CNY12.2 billion (USD1.8 billion), accounting for 71 percent of the total, that from abroad fell almost 12 percent to CNY5 billion (USD740 million).

Sales shrank 10 percent in the Asia-Pacific region to CNY2.6 billion (USD372 million) and 17 percent in the Americas to CNY1.9 billion, while in Europe and other markets they grew 5.9 percent to CNY506 million (USD75.2 million).

Overseas business is under pressure this year, said Chief Financial Officer Yang Jingbing. One reason is that the international popularity of Labubu, its flagship furry elf-like characters, has cooled, he said. Another is the continuing investment required to expand the firm’s global retail network.

Pop Mart will continue upgrading selected stores in key countries and regions, according to Chief Operating Officer Si De. However, opening large stores is not part of the firm’s overall strategy. Instead, it will open them selectively in key markets, Si said.

Pop Mart will repurchase between CNY2 billion and CNY5 billion (USD298 million and USD744 million) of its own shares over the next six months, the company also said yesterday. Buybacks are generally aimed at buoying a firm’s stock price by removing some of its equity from the market. Pop Mart’s shares have fallen more than 20 percent since the end of last year.

In terms of the first-half performance of individual intellectual properties, The Monsters family, which includes Labubu, generated income of CNY4.4 billion (USD654,6 million), a drop of 7.5 percent year on year. Its share of group revenue fell to 26 percent from 35 percent.

Twinkle Twinkle, a cute star-inspired character, delivered explosive growth, with sales soaring almost seven-fold to CNY2.6 billion (USD386.8 million). Its contribution to group revenue jumped to over 15 percent from almost 3 percent, making it Pop Mart’s second-largest IP.

Twinkle Twinkle has become a phenomenon in China and most Asian markets, Si said. In this half of the year, Pop Mart plans to bring its costumed character performances to Singapore and other places, with the aim of building brand awareness and an overseas fan base more quickly.

Editor: Kim Taylor