Core Viewpoint - Suplay, a card company, has filed for an IPO in Hong Kong, attracting attention due to its high-priced card offerings and backing from notable investors like MiHoYo and Sequoia. The company targets adult collectors rather than children, positioning itself as a luxury brand in the card market [1][3]. Financial Performance - Founded in 2021, Suplay transitioned to card production in 2023, achieving significant sales with 1.56 million cards sold and revenues of 146.3 million RMB in 2023. Projections indicate revenues of 281 million RMB in 2024 and 283 million RMB in the first three quarters of 2025, with adjusted net profits increasing from 15.97 million RMB in 2023 to 86.42 million RMB in 2025 [3][4][5]. Market Positioning - Suplay's average card price increased from 31 RMB to 43 RMB, with sales volume more than doubling. Its gross margin of 69.5% is competitive with industry leader Card Game, which has a margin of 71.3% [6][10]. - The company primarily targets adult collectors, contrasting with traditional children's card games, and has adopted strategies from established brands like Panini and Topps [7][9]. Product Strategy - Suplay has secured a significant IP license for Disney's 100th anniversary, marking a first for a Chinese brand. This license is crucial as it enhances the perceived value of their cards, which are designed to be collectible and aesthetically appealing [18][20]. - The company employs various production techniques to enhance card quality, including metallic coatings and intricate designs, making their products competitive in the luxury segment [22][25]. Challenges and Risks - Despite its growth, Suplay's revenue is only about 3% of Card Game's 10.057 billion RMB in 2024, indicating a small market share. The company relies heavily on IP licensing, which constitutes 95% of its revenue, making it vulnerable to changes in IP agreements [34][35]. - The company faces a dilemma between maintaining card scarcity to preserve value and the need for continuous product releases to drive growth. This balance is critical for sustaining player interest and market value [39][42].