One of China's most prominent value investors, billionaire Duan Yongping, finds himself in a potentially awkward position of being nearly "trapped" in an investment.
According to disclosures from the Hong Kong Stock Exchange on July 10th, the well-known investor Duan Yongping recently increased his stake in Pop Mart (ASX: PMRTY), bringing his total holdings to 102 million shares.
Based on Pop Mart's latest share price of HK$157, Duan Yongping's portfolio value now exceeds HK$16 billion, equivalent to approximately RMB 13.8 billion.
However, this multi-billion-dollar investment may now be on the verge of a temporary "trap." Recently, Pop Mart's stock price has been hovering around HK$155 per share, which is very close to the estimated average cost of Duan's holdings.
The future direction of this real-time "big investor story" is certainly worth watching closely.
Duan Yongping's Massive Investment in Pop Mart
Relevant information indicates that Duan Yongping likely purchased Pop Mart shares through his overseas investment vehicle, H&H International Investment.
H&H currently holds 101.86 million shares of Pop Mart, representing 7.65% of the total share capital, with the total investment scale exceeding RMB 13.8 billion.
It is speculated that H&H's investment portfolio, valued at over RMB 100 billion, consists largely of assets belonging to Duan Yongping and his associates. Based on clues such as shareholding ratios and investment platforms, Pop Mart appears to be the most significant new position Duan has established in recent years.
An Investment Style Mirroring Buffett's
Duan Yongping has delivered outstanding investment returns over his more than two-decade career. Notably, his investments are not in exclusive "insider deals" inaccessible to ordinary investors, such as strategic placements alongside major players or pre-IPO shares in hot stocks.
Duan's primary investments have involved heavily buying publicly traded common stock of listed companies in full view of the market, subsequently reaping substantial gains. Examples include Apple, NetEase, Kweichow Moutai, and China Shenhua.
Consequently, Duan is widely regarded as the Chinese investor most resembling Warren Buffett: a major player who earns money in the secondary market through genuine skill.
A Unique Method of Acquiring Pop Mart Shares
Interestingly, Duan's recent move is also highly reminiscent of Buffett's tactics.
First, he chose a stock that attracts significant attention but also considerable controversy: Pop Mart.
Second, he employed a Buffett-esque method of establishing a position: selling put options.
Selling put options means Duan provided "insurance" to all option buyers, giving them the right to sell Pop Mart shares to him at a predetermined price.
In return, Duan received substantial option premiums as compensation for selling this insurance. In terms of his accumulation strategy, this is equivalent to Duan gaining the possibility of buying Pop Mart shares at an effective price lower than the strike price.
Buffett has also used similar accumulation strategies.
A Surprisingly Rapid Accumulation
Theoretically, building a position through selling options should take a relatively long time. But Duan's process was not slow this time.
This is because Pop Mart's stock price fell too rapidly.
The swift decline led to a large number of the put options being exercised, allowing Duan to accumulate shares at a very fast pace.
Information shows that in April, Duan sold a large volume of put options with strike prices between HK$145 and HK$150. However, starting in May, a significant portion of these options began to be exercised, forcing Duan to start buying substantial amounts of Pop Mart stock.
Possibly to raise liquidity, Duan even liquidated his long-held position in China Shenhua – a domestic coal company renowned for its stable performance, high technical capabilities, and comprehensive coal-chemical industry chain.
To fund the purchase of Pop Mart shares, Duan has cleared out his holdings in China Shenhua.
The Rationale Behind Buying Pop Mart
Judging from the decision to sell existing stock to buy Pop Mart, at least in Duan's current view, Pop Mart's value is higher than that of China Shenhua.
However, a year ago, Duan did not hold this view. His attitude towards Pop Mart underwent a complete 180-degree shift within the past year.
Around August 2025, when Pop Mart was experiencing global popularity, with Labubu figurines selling out instantly, limited-edition second-hand items fetching multiples of their original price, and long queues forming at offline stores, Duan's assessment of the company was not as high as it is now.
At that time, he commented somewhat like a skeptical "old-school value investor": The company's products are indeed interesting, and the founder is impressive, but he couldn't envision what the company would look like in ten years.
By January 2026, his stance had softened slightly but remained cautious: "I've looked at it roughly, and it's indeed quite impressive. However, I still can't understand why people need this product. What if everyone stops wanting it in a couple of years?"
This attitude definitively changed on March 30, 2026. At that time, Pop Mart had just released its 2025 annual report. Because it provided modest profit growth guidance, the stock price plummeted.
Yet, in March of this year, Duan posted on an investment social platform stating that he had decided to retract his previous statement about not investing in Pop Mart.
He said he felt that Wang Ning (founder of Pop Mart) possessed a level of understanding and pursuit for his product comparable to that of Steve Jobs (former Apple chairman), and that he would at least reach that level in the future.
He even "lavished praise," suggesting that Wang Ning's business acumen might be slightly stronger than Jobs's.
Subsequently, he accelerated his buying, becoming Pop Mart's second-largest shareholder, behind only founder Wang Ning, in less than four months.
What Triggered the Change in Perspective?
From this year's perspective, Pop Mart's stock price seems explainable by fundamentals.
First, for the full year 2025, Pop Mart's revenue reached RMB 37.12 billion, a year-on-year increase of 184.7%; adjusted net profit was RMB 13.08 billion, up 284.5% year-on-year, with a gross profit margin as high as 72.1%.
However, the performance growth guidance provided for the following year in the annual report was around 20%.
Although the release of Pop Mart's first-quarter operational data showed revenue growth of 75% to 80% year-on-year, the deliberate omission of profit figures easily leads to less-than-favorable assumptions.
But Duan, who focuses on the long term, seems to think differently. Over the past few months, he has expressed increasingly positive affirmations about Pop Mart.
In April, he detailed his cognitive shift process, stating at the time:
"It was only after seeing this quarterly report that I really seriously researched Pop Mart. Before, I had only seen some fragments of Wang Ning's words and some short videos. My previous impression of Wang Ning was very good, but I always felt this business was too far from me, hard to understand, and I didn't know about its sustainability. I've seen many toys that were popular for a while, like Tamagotchis, hula hoops, Rubik's cubes, etc. Initially, my intuition felt this was somewhat similar to those things, and the P/E ratio last year and the year before was also very, very high. I'm curious if my understanding of the gaming industry will be rewarded again here with Pop Mart. In short, my Pop Mart insurance company is officially open for business."
From this, it can be inferred that Duan's shift regarding Pop Mart is primarily based on two factors:
First, he came to understand Pop Mart's business model and intuitively linked the company to the gaming industry, which he is adept at researching.
Second, he holds Wang Ning in very high regard, which supported his decision to buy into Pop Mart.
What Will Be the Outcome?
In the short term, the market clearly does not share Duan's confidence. On July 10th, when Duan "announced" his purchase of over RMB 10 billion worth of Pop Mart shares, the stock actually closed at HK$150.7. Its price has fallen 55.7% from its peak and is also below Duan's estimated cost basis.
However, for someone like Duan, holding a company is clearly not for short-term trading over one or two years; it is highly likely for the long haul.
Therefore, a short-term paper loss may have no impact on Duan—it might not even cause a ripple in his composure.
What truly affects Duan is Pop Mart's revenue and performance over the next 5 to 10 years. This is the key determinant for his multi-billion-dollar investment.
This key factor can be broken down into three prerequisites:
1. The industry in which Pop Mart operates must maintain a long-term growth rate significantly higher than global GDP.
2. Pop Mart's own position within its industry must remain highly secure over the next 5 to 10 years.
3. Pop Mart's corporate governance must remain excellent, allowing Duan and other secondary market investors to share relatively fully in the company's growth benefits.
In this regard, the greatest test among the three prerequisites is arguably the first one: the crucial growth rate of the industry itself.
The judgment of this future prospect will determine the success or failure of Duan's current investment.
Buffett Also Once "Didn't Understand" Disney
In fact, challenges similar to Duan's were also faced by Buffett in the past.
This pertains to Disney in the 1960s.
In 1966, Disney's market capitalization was only $90 million, with ample cash on hand. The 36-year-old Buffett spent $4 million to acquire about a 5% stake.
At the time, he valued Disney as a film company. He sold the investment a year later for $6.2 million. However, if that investment had been held until the 1990s, its value would have exceeded $1 billion.
Nearly 30 years later, in 1995, when Disney acquired the American Broadcasting Company (ABC), Buffett regained approximately a 3.6% stake through share exchange and additional purchases. This time he held for longer but sold out in early 2001, once again missing out on the stock's surge over the subsequent 20 years.
At that time, Disney more resembled a content empire with multiple monetization paths. Valuing it solely as a film company could indeed underestimate its growth potential.
However, even the greatest IP empire can face stagnation. Disney's current stock price is around $96, having fallen about 20% over the past year.
Perhaps, determining the true value of a company built on IP and emotional connections is a question even Buffett would find difficult to answer perfectly.
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