Shares of POP MART (HK: 9992) plunged as much as 8.85% in early Hong Kong trading on Friday, hitting their lowest intraday level in nearly five months. The sharp decline follows Morgan Stanley's decision to lower its price target on the stock from HK$214 to HK$203, citing second-quarter sales that came in below the bank's expectations.

By 9:38 a.m. Beijing time, POP MART shares were down 6.4% at HK$143.90. Despite the revenue shortfall, Morgan Stanley analysts, including Dustin Wei, noted in a report that the resilience of the company's core operating profit margin has far exceeded expectations. This strength was attributed to improved profitability in the domestic Chinese market and increased flexibility in overseas cost structures.

The investment bank has revised down its sales forecast for POP MART for the second half of 2026 by 7%. However, it anticipates that fourth-quarter sales trends will benefit from favorable seasonal factors and continued store expansion. Morgan Stanley highlighted that while sales remain the primary risk, market sentiment regarding the company's margin outlook is expected to turn increasingly positive.