Core Viewpoint - TOP TOY International Group Limited, a subsidiary of Miniso Group, has officially submitted its listing application to the Hong Kong Stock Exchange, aiming to capitalize on the booming collectible toy market [1]. Group 1: Company Overview - TOP TOY was established in December 2020 and is recognized as the largest and fastest-growing collectible toy brand in China, with a projected GMV of 2.4 billion RMB for 2024 [2]. - The company has experienced significant revenue growth, with revenue increasing from 679 million RMB to 1.909 billion RMB over the past three years, and achieving 1.36 billion RMB in revenue with a net profit of approximately 180 million RMB in the first half of this year, resulting in a net profit margin of about 13.2% [3]. Group 2: IP and Revenue Dependency - TOP TOY currently holds 17 proprietary IPs, 43 licensed IPs, and over 600 third-party IPs, but its revenue heavily relies on external IPs, with licensed IPs contributing approximately 889 million RMB, accounting for about 47% of total revenue in 2024 [4][5]. - The company's proprietary IPs generated only 6.8 million RMB in revenue last year, representing less than 1% of total revenue, indicating a weak market influence compared to competitors like Pop Mart, which generated 11.121 billion RMB from its proprietary IPs, constituting 85% of its total revenue [5]. Group 3: Sales Channels and Partnerships - Miniso Group is the largest customer of TOP TOY, accounting for 48.3% and 45.5% of the company's total revenue in the last year and the first half of this year, respectively, with sales to Miniso amounting to 923 million RMB and 619 million RMB [8]. - The company plans to leverage its partnership with Yonghui Supermarket, which has become Miniso's largest shareholder, to enhance its sales channels, particularly for its own products like building blocks and blind boxes [10]. Group 4: Expansion Plans - TOP TOY aims to open 100 new stores in China this year, targeting a total of 380 to 400 stores by year-end, and plans to expand internationally by covering 100 countries and opening 1,000 stores over the next five years [10]. - The company has prepared a reserve fund of 10 billion RMB to support its ongoing domestic and international expansion efforts [10].

Core Insights - TOP TOY, a潮玩 brand under Miniso, plans to open over 1,000 stores globally in the next five years, with more than 50% of sales expected to come from overseas markets [3][5] - The company has allocated a reserve fund of 10 billion RMB to support its expansion, with a focus on flagship stores in major global shopping districts [3][4] - TOP TOY aims to position itself as a "super factory" for IP-related products, collaborating with various global and local IPs [4][5] Expansion Plans - The company plans to open 150 new stores in China by 2025, with 100 of those in major cities [3][5] - Currently, TOP TOY operates nearly 280 stores across over 80 cities in China, with plans to expand to 500-700 stores in the country [3][5] - TOP TOY has already opened five stores in Southeast Asia, with some achieving rapid profitability [6] Financial Performance - In the first three quarters of 2024, TOP TOY generated 700 million RMB in revenue, a 42.5% increase year-on-year, contributing approximately 5.7% to Miniso's total revenue [5][6] - The company's revenue for 2023 was 680 million RMB, up from 429 million RMB in 2022 [5][6] - TOP TOY's growth rate is significantly higher than Miniso's overall performance, with a revenue growth rate 2.5 times that of the parent company [5] Market Positioning - TOP TOY's strategy closely mirrors that of Bubble Mart, aiming to capture market share in the潮玩 sector [5][6] - The brand's primary products include blind boxes, building blocks, and plush toys, with a focus on leveraging popular IPs for product development [7][10] - The company has seen a 55%-60% compound annual growth rate over the past four years, with self-owned products experiencing a 150% growth rate this year [7][10] IP Strategy - TOP TOY relies heavily on external IPs for its product offerings, which poses risks related to licensing costs and renewal uncertainties [10][11] - The brand has a limited number of original IPs, with current self-owned IPs accounting for only a small percentage of sales [10][11] - The company is exploring collaborations with designers to enhance its product offerings, but remains focused on leveraging existing major IPs for growth [8][9] Competitive Landscape - TOP TOY faces challenges in differentiating itself from competitors like Bubble Mart, which has a strong portfolio of exclusive designer IPs [10][11] - The brand's reliance on external IPs may hinder its ability to create standout products in a crowded market [11][12] - The company is aware of the difficulties in attracting consumers in unfamiliar markets, particularly in Europe and North America [13] Store Location Strategy - TOP TOY's store location strategy has evolved to include not just first and second-tier cities but also lower-tier cities, reflecting a shift to capture a broader consumer base [15] - The company's same-store sales growth has slowed, indicating a need for strategic adjustments in its expansion approach [15]