Ge Long Hui·2026-01-13 22:14Core Viewpoint - Bubble Mart, established in 2010, is a leading cultural and entertainment company in China, focusing on five key areas: global artist discovery, IP incubation and operation, consumer engagement, promotion of trendy toy culture, and investment integration in related industries [1] Horizontal Performance - The Chinese IP derivative and toy market shows strong growth potential, with the market size projected to increase from 99.4 billion yuan in 2020 to 174.2 billion yuan by 2024, reflecting a compound annual growth rate (CAGR) of 15.1%. By 2029, the market is expected to reach 335.7 billion yuan, with a CAGR of 14.0% from 2024 to 2029 [1] - The Chinese trendy toy market is relatively fragmented, maintaining a healthy IP matrix. Compared to Europe and the U.S., China's per capita spending on IP toys is low, and the consumer base is expanding to include adults as significant buyers [1] Vertical Performance - The company employs a diversified channel strategy for sales, including offline, online, wholesale, and other channels. Key offline sales channels include retail stores and robot stores [2] - The company's box machines are innovating in scene-based and entertainment aspects, effectively linking online and offline traffic through holiday marketing strategies, which has expanded the access scale of WeChat mini-programs [2] - The company demonstrates strong revenue-generating capabilities and growth potential, with steady increases in net assets, improved scale effects, and declining main fee rates. Profitability is also on the rise, with steady improvements in gross and net profit margins [2] Investment Recommendations - IP operation and creative design are critical for the company's sustainable development. As a leading global trendy toy IP platform, the company has successfully created multiple popular cultural IP images through a mature IP operation system [3] - The company is expected to increase its overall revenue from 33.83 billion yuan in 2025 to 61.83 billion yuan in 2027, with growth rates of 159.5%, 41.7%, and 29.0% respectively. Net profit attributable to the parent company is projected to grow from 7.95 billion yuan to 13.82 billion yuan during the same period, with year-on-year growth rates of 154.2%, 36.0%, and 27.9% respectively [3] - The company is optimistic about the growth logic of its IP matrix incubation and operation platform and has initiated coverage with a "recommended" rating [3]