Investment Rating - The report assigns an "Accumulate" rating for the company [5][19]. Core Views - The company is solidifying its position as a leading state-owned film and television enterprise while actively developing a multi-product cultural platform centered around "IP+" [2]. - The company is transitioning into a diversified, light-asset, platform-oriented cultural enterprise, expanding into various sectors including short dramas, interactive dramas, animation, gaming, cultural tourism, and performance economy [11]. Financial Summary - The projected revenue for 2023 is 461 million, with a decrease of 1.1% from the previous year. Revenue is expected to decline to 366 million in 2024, followed by a significant increase of 31.5% to 481 million in 2025 [4][12]. - Net profit attributable to the parent company is forecasted to be 28 million in 2023, with a substantial increase to 56 million by 2025, reflecting an 84.2% growth [4][12]. - The earnings per share (EPS) is expected to rise from 0.06 in 2023 to 0.12 in 2025 [4][12]. Business Segments - The film and television segment is projected to generate 35.29 million in revenue in 2024, accounting for 96.4% of total revenue, with a gross margin of 18.9% [11][13]. - The concert business is expected to contribute 1.21 billion in revenue in 2024, marking a 147.2% year-on-year increase [13]. - The company has strategic partnerships to explore new business opportunities in the performance and cultural tourism sectors [11]. Valuation - The report uses a price-to-book (PB) valuation method, applying a 4x PB multiple for 2025, leading to a target price of 8.88 per share [11][14]. - The average PB for comparable companies in 2025 is estimated at 5.71 [14]. Market Data - The current stock price is 7.62, with a market capitalization of 3.619 billion [6][12]. - The stock has shown a 39% increase over the past 12 months [10]. Financial Ratios - The return on equity (ROE) is projected to improve from 2.9% in 2023 to 6.1% by 2027 [4][12]. - The net profit margin is expected to rise from 5.9% in 2023 to 14.0% in 2027 [12]. Strategic Initiatives - The company is actively pursuing strategic collaborations and has over 10 S-level film projects in the pipeline [11]. - It is also investing in technology partnerships to integrate AI and XR into its content creation processes [11].

Core Viewpoint - The article discusses the investment potential and operational dynamics of a collectible card game company, emphasizing the importance of supply-side factors over demand-side analysis in understanding the company's business model and market positioning [3][4]. Group 1: Company Overview - The company operates primarily in the collectible card game sector, relying on non-exclusive IP licensing and targeting younger audiences [4]. - The business model is straightforward, focusing on acquiring IP and selling toys, which leads to significant revenue volatility [5]. Group 2: Financial Performance - Revenue projections for 2022, 2023, and 2024 are 4.13 billion, 2.66 billion, and 10.06 billion RMB respectively, with a notable decline of 35.6% in 2023 followed by a projected increase of 277.8% in 2024 [6]. - Gross profit for the same years is 2.84 billion, 1.75 billion, and 6.77 billion RMB, with gross margins of 68.8%, 65.8%, and 67.3% respectively [7]. - The company experienced a net loss in 2024, attributed to high stock-based compensation and fair value changes of preferred shares, which are not expected to impact cash flow significantly [10]. Group 3: Market Dynamics - The company heavily relies on the Ultraman IP, which constituted over 80% of its revenue in 2022, leading to vulnerability during market disruptions [8]. - In 2023, the company introduced 36 new IPs, but the transition to new revenue streams was slow, contributing to the revenue drop [8]. Group 4: Competitive Advantage - The company's core competency lies in its expertise in collectible card design and manufacturing, which is crucial for maintaining IP partnerships [11][14]. - The relationship with IP licensors is strengthened by the company's established manufacturing capabilities and compliance, making it a preferred partner for IP owners [13][14]. Group 5: Industry Context - The article highlights the unique advantages of the Chinese market, including strong manufacturing capabilities, legal protections for IP, and a robust secondary market for collectibles, which are essential for the growth of companies like this one [15][18].