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]
布鲁可（00325）：本土积木人龙头，多IP矩阵+下沉市场拓展驱动未来增长