Bubble Mart and Bruco, on the one hand, have their share price soaring, and on the other hand, are facing a huge amount of short orders.

On June 11, exchange data showed that the short sales of Bubble Mart and Bruco soared to 1.707 million shares and 256,800 shares respectively, a surge of more than 200% and 260% from the beginning of May, which was in sharp contrast to the continued decline in short sales of new consumer brands such as Gu Ming and Mao Geping.

In fact, on June 9, the day Brooke transferred to the Hong Kong Stock Connect, a change in market sentiment was already evident: its short selling volume surged 459% in a single day.Some arbitrage funds use southbound allocation expectations to push up stock prices, and then lock in earnings through short selling, forming a closed-loop trading strategy.

The deeper short selling logic is rooted in the risk of overdraft performance: Bubble Mart's share price has soared more than 400% in one year, and its market value has rebounded 10 times from its lowest point; Brooke's share price has risen by a maximum of 261% in the four months since its listing.Capital cashed in on growth expectations ahead of schedule, pushing the P/E ratio to a dangerous high-Bubble Mart's dynamic P/E ratio peaked at 89 times in March 2025, deviating from the average of the Hong Kong stock consumer goods sector by 276%.

IP dependence has become the "Achilles 'heel" of valuation.Brooke's Ultraman IP contributed 48.9% of revenue, but the copyright in China expires in 2027, and the license in nine Asian countries will end in 2025.Its IP costs are consuming profits at an alarming rate: in the first half of 2024, authorization fees reached 91.23 million yuan, a year-on-year increase of nearly 9 times, and the proportion of sales costs climbed from 1.2% in 2021 to 18.5%.

Although the Bubble Mart Labubu series achieved a miracle of annual revenue of 3.04 billion yuan, a year-on-year increase of 726.6%, it accounted for 23.3% of its total revenue, and the pressure on IP life cycle management has increased sharply.When Gen Z consumers turn to new IPs such as "Blue Prison" and "Spy House", dependence on a single hit may instantly disintegrate the foundation of valuation.

On the other hand, the decline in Gen Z repurchase rates has also exposed industry concerns.Third-party research shows that about 30% of blind box consumers reduce purchases due to "fading freshness".Brooke tried to use a low-price strategy to delay the recession. The average selling price dropped from 89 yuan in 2021 to 16.3 yuan in 2024. Although the nine-block and nine-blind-box strategy opened up the sinking market, it caused the gross profit margin to hover at 52.6% for a long time, far lower than Bubble Mart 66.8%.Although Bubble Mart's overseas expansion contributed a high gross profit margin of 71.3%, cultural output is still variable-LABUBU's popularity in Southeast Asia relies on Thai princesses, Lisa and other celebrities to bring goods, and has not yet formed a deep cultural identity.