Investment Rating - The report maintains a "Strong Buy" rating for the company [3] Core Insights - The company achieved a revenue of 2.24 billion (+155.6%) and an adjusted net profit of 580 million (+702.1%) in 2024, with an adjusted net profit margin of 26.1% (+17.8 percentage points) [1][6] - The company is a leading player in the domestic building block toy market, with significant market share and brand recognition [1] - The growth momentum is driven by strong IP resource reserves, continuous new product launches, channel expansion, and overseas market development [1][6] - The company has expanded its IP portfolio from approximately 27 to about 50, adding several strong IPs such as DC Superman, DC Batman, Harry Potter, and Star Wars [6] Financial Performance - The company reported a revenue of 1.2 billion (+110.8%) and an adjusted net profit of 290 million (+248.2%) in the second half of 2024 [6] - The revenue from licensed IPs includes 1.1 billion from Ultraman (+96.8%) and 450 million from Transformers (+263.0%) [6] - The gross margin for building block toys increased from 48.4% in 2023 to 52.9% in 2024, contributing to an overall gross margin increase to 52.6% (+5.3 percentage points) [6] - The company expects adjusted net profits of 1.04 billion, 1.62 billion, and 2.02 billion for 2025, 2026, and 2027 respectively [6] Market Expansion - The company has established operations in the UK, Indonesia, Malaysia, and Singapore to expand its overseas market presence, with overseas revenue reaching 64 million (+518.2%) in 2024 [6] - The company has launched 682 SKUs, targeting various age groups, including 132 for children under 6 years old and 519 for ages 6 to 16 [6] Financial Ratios - The company’s adjusted net profit margin is projected to improve to 24.7%, 25.7%, and 26.2% for 2025, 2026, and 2027 respectively [8] - The return on equity (ROE) is expected to reach 113.1%, 64.2%, and 44.6% for 2025, 2026, and 2027 respectively [8] - The asset-liability ratio is projected to decrease from 258.8% in 2023 to 62.5% in 2027, indicating improved financial stability [8]

Summary of the Conference Call for Bluko Company Industry and Company Overview - The conference call focuses on Bluko Company, which operates in the toy industry, specifically in the segment of building blocks and licensed IP products. Key Points and Arguments - **Financial Performance**: Bluko Company reported a revenue of 2.2 billion yuan for the fiscal year 2024, representing a year-on-year growth of 186%. The adjusted net profit margin reached 26.1%, an increase of 18 percentage points year-on-year. The core business segment, platform character building blocks, generated 2.2 billion yuan in revenue, accounting for 98% of total revenue, with sales volume reaching 130 million units, a 269% increase year-on-year. The gross margin improved by 5.3 percentage points to 53% [2][3] - **IP Growth**: Licensed IP products such as Ultraman and Transformers saw revenue growth of 97% and 263%, respectively, while free IP products also experienced over 100% growth, indicating a strong impact from IP-driven sales [2][4] - **Cost Control**: The company effectively reduced sales and R&D expense ratios by 9 percentage points and 2 percentage points, respectively, demonstrating improved profitability and cost management [2][3] - **Market Expansion**: Domestic distribution channels performed strongly, while overseas market revenue surged by 518% to 60 million yuan, highlighting the company's potential for expansion in both domestic and international markets [2][4] - **Product Strategy**: Bluko plans to launch high-value products priced at 9.9 yuan, such as the Transformers series, and expand its product range with premium versions priced between 100 to 200 yuan to attract a broader consumer base, including adult enthusiasts [2][6] - **Marketing and User Engagement**: The company is enhancing user engagement through diverse marketing strategies, including the BFC mini-program community and building block competitions. It currently has approximately 150,000 domestic outlets and aims to accelerate expansion while targeting more female consumers [2][7] - **Competitive Advantage**: Bluko's modular design system provides a cost advantage compared to international leaders like Bandai. As downstream demand grows and IP releases increase, the company is expected to maintain a high growth rate, with room for valuation improvement [2][8] Additional Important Insights - **Future Development Strategies**: Bluko will continue to focus on its IP matrix, product iteration, and channel expansion. The company holds over 5,000 patents, six classic IP series, and more than 600 SKUs, which will strengthen its competitive moat [5] - **SKU Growth**: The company anticipates increasing its SKU count from over 680 to between 800 and 1,000 by 2025, further contributing to sales growth through targeted product offerings for different demographics [6] - **International Market Coverage**: Bluko has established a presence in North America with 6,000 terminals and plans to expand to 60,000 terminals in Asia by mid-2025 [7]

Investment Rating - The report initiates coverage with a "Buy" rating for the company [2][9]. Core Insights - The company is reducing its reliance on a single IP and is expected to achieve strong growth through market penetration and international expansion [8][20]. - The company has demonstrated significant revenue growth, with a projected increase in revenue from 8.77 billion RMB in 2023 to 41.07 billion RMB in 2025, reflecting a growth rate of 83% [7][26]. - The company is expanding its IP portfolio and product offerings, with a notable increase in SKUs to 682 in 2024, enhancing its competitive edge [8][18]. Financial Data and Profit Forecast - Revenue projections for 2023 to 2027 are as follows: 8.77 billion RMB (2023), 22.41 billion RMB (2024), 41.07 billion RMB (2025), 61.82 billion RMB (2026), and 76.51 billion RMB (2027) [7][26]. - Adjusted net profit is expected to grow from 742.63 million RMB in 2023 to 1.09 billion RMB in 2025, with corresponding growth rates of 133.37% and 87.41% [7][26]. - The gross margin is projected to remain stable, with a slight increase from 47.33% in 2023 to 53.57% in 2025 [7][26]. Growth Drivers - The company is diversifying its IP portfolio, reducing the share of its main IP, Ultraman, from 57% in the first half of 2024 to 41% in the second half [15][11]. - The company is targeting lower-tier markets with a successful 9.9 RMB product series, which has shown strong sales and potential for further penetration [20][21]. - International expansion is a key focus, with overseas revenue expected to reach 353 million RMB in 2025, reflecting a growth rate of 450% [30][26]. Market Positioning - The company is leveraging its extensive sales network and product development capabilities to enhance its IP acquisition and product differentiation [8][18]. - The introduction of new IPs and products is anticipated to broaden the customer base, particularly among women and older demographics [20][21]. - The company is positioned to benefit from a growing demand for affordable and high-quality building toys, with a strong market presence in Southeast Asia and North America [21][26].

Investment Rating - The report suggests a positive outlook for the company, indicating a strong growth potential driven by its product mix and market strategies [1][3][6] Core Insights - The company achieved a revenue of RMB 2.241 billion, a year-on-year increase of 155.6%, and an adjusted annual profit of RMB 585 million, reflecting a significant year-on-year increase of 702.1% [1] - The sales revenue from building block toys decreased by 62.9%, indicating a strategic shift towards building character toys, which generated sales of RMB 2.201 billion [1][3] - The company has invested RMB 192 million in R&D, accounting for 8.6% of total revenue, highlighting its commitment to product innovation [1] - The gross profit margin improved to 52.6%, showcasing enhanced supply chain efficiency and product structure optimization [3] Summary by Sections Revenue Growth - The revenue growth is primarily attributed to product mix optimization and channel penetration strategies, effectively reaching consumers across various demographics and price ranges [3][4] - The company plans to introduce 800-1000 new SKUs and over 300 new products in 2025, further enhancing its product offerings [4] Market Expansion - The company is expanding its IP matrix, currently holding nearly 50 licensed IPs and planning to add over 25 more, including popular franchises like Star Wars and Pokémon [4][5] - Domestic market penetration is supported by over 450 distributors, while international expansion is achieved through brand partnerships and localization strategies, with overseas sales revenue increasing by 518.2% [1][4] Future Growth Drivers - The company is focusing on developing female-oriented products to address specific market needs, including ease of assembly and aesthetic appeal [5] - Forecasts indicate net profits of RMB 941 million, RMB 1.381 billion, and RMB 1.991 billion for 2025-2027, with corresponding P/E ratios of 30x, 20x, and 14x, reflecting strong market confidence in sustained profitability [6]

Investment Rating - The report indicates a strong investment potential for the company, suggesting to pay attention to its growth prospects [6]. Core Insights - The company achieved a revenue of RMB 2.241 billion, a year-on-year increase of 155.6%, and an adjusted annual profit of RMB 585 million, up 702.1% [1]. - The sales revenue from building block toys decreased by 62.9%, indicating a strategic shift towards building character toys [1]. - The company has a robust IP matrix with nearly 50 licensed IPs and plans to add over 25 more, which is expected to drive sales growth [4]. - The gross margin improved to 52.6%, reflecting enhanced supply chain efficiency and product structure optimization [3]. - The company is expanding its market presence both domestically and internationally, with overseas sales revenue increasing by 518.2% [1][4]. Summary by Sections Financial Performance - The company reported a total revenue of RMB 2.241 billion for the fiscal year, with a significant increase in adjusted profit to RMB 585 million [1]. - The sales of character building toys reached RMB 2.201 billion, while sales of building block toys saw a decline [1]. Strategic Initiatives - The company is implementing a "three-full strategy" (full price range, full demographics, globalization) to penetrate deeper into the market [3]. - The company plans to launch 800-1000 new SKUs and over 300 new products in 2025, focusing on popular IP collaborations [4]. Market Expansion - The company is leveraging over 450 distributors to cover first and second-tier cities while accelerating penetration into lower-tier markets [5]. - Internationally, the company is making strides in Southeast Asia and the Middle East, with a reported overseas revenue of RMB 64 million [4][5]. Future Outlook - Analysts predict net profits for 2025-2027 to be RMB 941 million, RMB 1.381 billion, and RMB 1.991 billion respectively, with corresponding P/E ratios of 30x, 20x, and 14x [6]. - The company is expected to continue its growth trajectory through its IP and channel strategies, despite potential industry risks [6].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% compared to the benchmark index [4][9]. Core Insights - The company reported significant revenue growth and improved profitability in 2024, with total revenue reaching 2.241 billion yuan, a year-on-year increase of 155.6%. The adjusted net profit was 585 million yuan, up 702.1% year-on-year, despite a net loss of 401 million yuan [2][4]. - The gross margin for 2024 was 52.6%, an increase of 5.28 percentage points from the previous year, while the adjusted net profit margin improved by 17.8 percentage points to 26.1% [2][4]. - The company has expanded its IP matrix and product offerings, achieving a revenue of 2.201 billion yuan from building block toys, a growth of 186.2% year-on-year, and a gross margin increase to 52.9% [2][3]. Revenue and Profitability - The company achieved a total revenue of 2.241 billion yuan in 2024, with a year-on-year growth rate of 155.6% [6][8]. - The adjusted net profit for 2024 was 585 million yuan, reflecting a substantial increase of 702.1% compared to the previous year [2][4]. - The gross profit margin improved to 52.6%, up from 47.33% in 2023, indicating enhanced profitability [8]. Product and Market Expansion - The company has broadened its IP matrix, now holding two self-developed IPs and approximately 50 licensed IPs, resulting in a diverse product range of 682 SKUs [2][3]. - The introduction of a new product at a price point of 9.9 yuan is expected to enhance market penetration in lower-tier markets [2]. - The building block toy segment saw a revenue decline to 39 million yuan, a drop of 62.9% year-on-year [2]. Channel and Geographic Development - The company reported offline sales revenue of 2.085 billion yuan, a year-on-year increase of 171.09%, while online sales reached 156 million yuan, growing by 46.52% [3]. - The company has established subsidiaries in the UK, Indonesia, Malaysia, and Singapore, with overseas revenue reaching 64 million yuan, a remarkable growth of 518.2% [3].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% compared to the benchmark index [4][7]. Core Insights - The company reported significant revenue growth and improved profitability in 2024, with total revenue reaching 2.241 billion, a year-on-year increase of 155.6%. Adjusted net profit was 585 million, up 702.1% [2][4]. - The gross margin for 2024 was 52.6%, an increase of 5.28 percentage points from the previous year, while the adjusted net profit margin improved by 17.8 percentage points to 26.1% [2][4]. - The company has expanded its IP matrix and product offerings, with revenue from building block toys declining significantly by 62.9% to 39 million [2][3]. Revenue and Profitability - The company achieved a total revenue of 2.241 billion in 2024, with a year-on-year growth rate of 155.6% [6][8]. - The adjusted net profit for 2024 was 585 million, reflecting a substantial increase of 702.1% compared to the previous year [2][4]. - The gross profit margin improved to 52.6%, while the adjusted net profit margin reached 26.1% [2][4]. Product and Market Expansion - The revenue from character building toys was 2.201 billion, representing a growth of 186.2% and accounting for 98.2% of total revenue [2][3]. - The company has developed a diverse product portfolio with 682 SKUs, including two self-developed IPs and around 50 licensed IPs [2][3]. - The introduction of a new product at a price point of 9.9 yuan is expected to enhance market penetration in lower-tier markets [2][3]. Channel and Geographic Development - Offline sales generated 2.085 billion in revenue, a year-on-year increase of 171.09%, while online sales reached 156 million, up 46.52% [3]. - The company has established subsidiaries in the UK, Indonesia, Malaysia, and Singapore, with overseas revenue growing by 518.2% to 64 million [3][4].

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 15% compared to the benchmark index [4][7]. Core Insights - The company reported significant revenue growth of 155.6% year-on-year, achieving total revenue of 2.241 billion yuan in 2024. Adjusted net profit reached 585 million yuan, a remarkable increase of 702.1% [1]. - The gross margin improved to 52.60%, up by 5.28 percentage points from the previous year, while the adjusted net profit margin increased by 17.8 percentage points to 26.1% [1]. - The company has expanded its IP matrix, with revenue from building block toys declining significantly, while character-based toys saw a revenue increase of 186.2% [2][3]. Summary by Sections Financial Performance - In 2024, the company achieved a revenue of 2.241 billion yuan, with a year-on-year growth of 155.6%. The adjusted net profit was 585 million yuan, marking a 702.1% increase [1][6]. - The gross margin for 2024 was reported at 52.60%, an increase from 47.33% in 2023, while the adjusted net profit margin reached 26.1% [1][8]. Product and Market Development - The character-based toys segment generated 2.201 billion yuan in revenue, accounting for 98.2% of total revenue, with a gross margin of 52.9% [2]. - The company has developed a diverse product portfolio with 682 SKUs, including two proprietary IPs and around 50 licensed IPs, enhancing its market presence [2]. Channel and Geographic Expansion - The company reported a 171.09% increase in offline sales, totaling 2.085 billion yuan, while online sales grew by 46.52% to 156 million yuan [3]. - The company has established subsidiaries in the UK, Indonesia, Malaysia, and Singapore, with overseas revenue reaching 64 million yuan, a growth of 518.2% [3].

Investment Rating - The report gives a "Buy" rating for the company with a target price of HKD 136.71 per share based on a 35x PE for 2025 [3] Core Views - The company is positioned as a leading player in the domestic character building block toy market, leveraging the popularity of its products, particularly the Ultraman series, leading to explosive revenue growth in 2023 and 2024 [1][10] - The company has a strong competitive advantage through differentiated product offerings, effective content marketing strategies, and a robust supply chain [2][43] - The growth strategy focuses on expanding its IP matrix and penetrating lower-tier markets, with significant revenue contributions from key IPs [2][62] Summary by Sections Investment Logic - The company has transitioned to focus on character building blocks, achieving revenues of HKD 8.77 billion and HKD 22.4 billion for 2023 and 2024, respectively, representing year-on-year growth of 169% and 156% [1][10] - The gross margin is expected to improve to 52.6% in 2024, with a net profit of HKD 5.85 billion, reflecting a net profit margin of 26.1% [1][13] Competitive Advantages - The company offers high cost-performance products with a complete pricing range from HKD 9.9 to HKD 399, excelling particularly in the sub-HKD 50 segment [2][48] - The product development cycle is rapid, with 30-90 new SKUs launched quarterly, catering to various age groups [2][46] Growth Potential - The company has a diverse IP matrix, with the top four IPs contributing over 90% of revenue in 2024, including Ultraman, Transformers, and self-owned IPs [2][24] - The company has expanded its distribution network to approximately 150,000 offline points, focusing on lower-tier markets [2][65] Financial Forecasts - The adjusted net profit is projected to grow to HKD 9.08 billion, HKD 12.69 billion, and HKD 16.67 billion for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 55%, 40%, and 31% [3][6] - The company’s P/E ratio is expected to decrease from 29.83 in 2023 to 16.25 in 2025, indicating a favorable valuation trend [6][3]

Investment Rating - The report gives a "Buy" rating for the company with a target price of HKD 136.71 per share based on a 35x PE for 2025 [4] Core Views - The company is positioned as a leading player in the domestic character building block toy market, leveraging the popularity of its products, particularly the Ultraman series, leading to explosive revenue growth in 2023 and 2024 [2][14] - The company has a strong market share of 30.3% in the Chinese character building block toy market as of 2023, ranking first [2][22] - The financial outlook is positive, with projected adjusted net profits of HKD 9.08 billion, HKD 12.69 billion, and HKD 16.67 billion for 2025, 2026, and 2027 respectively, indicating significant growth [4] Summary by Sections Investment Logic - The company has transformed to focus on character building blocks, resulting in revenue of HKD 8.77 billion and HKD 22.4 billion for 2023 and 2024, respectively, representing year-on-year growth of 169% and 156% [2][14] - The gross margin is expected to improve to 52.6% in 2024, with a significant reduction in sales expense ratio to 12.6% [2][18] - The company plans to raise HKD 17.9 billion through its IPO to enhance its IP matrix, build factories, and improve product design and development capabilities [2] Competitive Advantages - The company has a differentiated product positioning with a focus on high cost-performance, offering a wide range of products priced from HKD 9.9 to HKD 399 [3][54] - The product development strategy includes a rich SKU offering with rapid iteration, launching 30-90 new SKUs each quarter [3][52] - The company has established a strong offline distribution network, covering approximately 150,000 retail points, primarily targeting lower-tier markets [3][39] Growth Potential - The company is expanding its IP matrix, with significant contributions from major IPs like Ultraman, Transformers, and its own Hero Unlimited, which collectively account for over 90% of revenue in 2024 [3][29] - The company is actively developing its presence in lower-tier markets, which presents further growth opportunities [3][75] - The character building block toy market in China is expected to grow from HKD 58 billion in 2023 to HKD 325 billion by 2028, with a CAGR of 41.3% [24][26] Financial Forecast and Valuation - The company is projected to achieve adjusted net profits of HKD 9.08 billion, HKD 12.69 billion, and HKD 16.67 billion for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 55%, 40%, and 31% [4][8] - The report anticipates a diluted EPS of HKD 2.35 in 2024, increasing to HKD 6.69 by 2027 [8]