POP MART (09992.HK) saw its shares plummet 5.15% in Thursday's pre-market trading, following concerns over falling resale prices of its popular Labubu toys and increased short selling pressure. The toy maker, which has seen its stock soar 186% year-to-date, is now facing challenges in maintaining its growth momentum.

According to recent analysis, the resale prices of POP MART's Labubu toys, part of "The Monsters" series that accounted for over a third of the company's first-half revenue, have been declining rapidly. Data from Chinese art toy resale platform Qiandao showed that the price of the "Luck" Labubu character, launched in April, has fallen from its June peak of over 500 yuan to around 108 yuan. This drop has raised questions about the sustained demand for POP MART's products.

Adding to the pressure, Hong Kong Stock Exchange data revealed that POP MART topped the list of stocks with the highest short selling amounts, reaching 1.723 billion. This significant short selling interest suggests that some investors are betting on further declines in the stock price. While POP MART has attributed the falling resale prices to increased supply rather than weakening demand, the market appears to be reacting cautiously to these developments, leading to today's sharp decline in stock value.