YAOJI TECHNOLOGY(SZ:002605) Hua Er Jie Jian Wen·2025-09-18 16:31Core Viewpoint - The card market has cooled significantly compared to 2024, with a decline in both transaction volume and consumer interest, largely due to the lack of leading IPs to drive the market [1] Group 1: Market Dynamics - The interest in card games has waned as consumer attention shifts towards other trends, such as the vinyl and plush toy craze led by Pop Mart [1] - The competitive narrative in the domestic card game market is diversifying, moving away from the dominance of a single leading player [1] - Despite the cooling market, various capital sources are accelerating their entry into the card game sector [1] Group 2: Company Developments - Flash Soul, a new entrant in the card game market, completed a significant financing round of several hundred million RMB, marking the largest disclosed financing in the card sector in the past year [2] - Founded in 2023, Flash Soul has a strong founding team, including the chairman of Yaoji Technology and a former market director from Card Game [2][3] - Flash Soul's rapid rise has led it to be referred to as a "dark horse" in the card industry [5] Group 3: Product Strategy - Flash Soul's collaboration with NetEase on the game "Identity V" quickly gained market traction, with its second product selling out within a month of launch [6][7] - Unlike competitors focusing on younger audiences, Flash Soul targets game IPs, establishing a clear competitive strategy [10] - The company is investing heavily in trading card games (TCG), which emphasize community interaction among players, as opposed to collectible card games (CCG) that rely on rarity [12] Group 4: Strategic Partnerships - Flash Soul has partnered with major gaming franchises, including a TCG series based on "Genshin Impact" and a collaboration with Riot Games for a TCG set in the League of Legends universe [11] - The company is committed to significant annual investments in marketing and support for core stores [11] Group 5: Industry Context - The TCG market is more mainstream in mature overseas markets, offering better customer retention and predictable demand [13] - However, the TCG sector in China faces challenges, including high operational costs and a lack of professional talent [14] - The Yaoji system, which includes Flash Soul and Yaoji Toys, has a broad influence across the card industry, leveraging extensive resources and established operational frameworks [15][16] Group 6: Corporate Structure - The Yaoji system has deep and extensive industry layouts, impacting various segments of the card market [15] - Although Yaoji Toys and Flash Soul are no longer directly linked to Yaoji Technology, they share a common control structure and historical ties [17][18] - Concerns have been raised about the potential risks of operational overlap and governance transparency between the entities within the Yaoji system [19]