Core Viewpoint - Guangdong Jintian Animation Co., Ltd. (Jintian Animation) has submitted its listing application to the Hong Kong Stock Exchange, aiming to capitalize on its position as a leading player in the IP-themed snack food industry in China [2][3]. Company Overview - Jintian Animation is recognized as the largest IP-themed snack food company in China by revenue, with a market share of 7.6% in 2024, and the fourth largest IP food company with a market share of 2.5% [2]. - The company has established five production bases across China and holds 26 authorized IPs, including popular characters like Ultraman and Peppa Pig, with over 600 active SKUs [2][3]. Financial Performance - Revenue is projected to grow from RMB 595.6 million in 2022 to RMB 877.4 million in 2024, with gross profit increasing from RMB 158.6 million to RMB 295.5 million, resulting in a gross margin improvement from 26.6% to 33.7% [3][5]. - For the first half of 2025, the company reported revenue of RMB 443.9 million and a gross profit of RMB 154.1 million, with a gross margin of 34.7% [3][5]. Dependency on IP Licensing - Jintian Animation's revenue heavily relies on IP licensing, with sales from IP-themed products accounting for 96.6% to 99.5% of total revenue from 2022 to the first half of 2025 [3][4]. - The top five licensed IPs contributed 90% to 85.7% of revenue during the same period, with Ultraman being the most significant, contributing 63% of revenue in 2023 and 43.9% in the first half of 2025 [4][5]. Inventory Management - The company's inventory has been increasing, reaching RMB 76.2 million by June 30, 2025, with inventory turnover days ranging from 45.1 to 48.9 days [7]. - Jintian Animation faces inventory risks due to changing consumer trends and competition, which could lead to either excess inventory or stock shortages [8]. Market Competition - The IP-themed snack food market in China is competitive and fragmented, with the top five companies holding only 16.7% of the market share in 2024 [8]. - The company must continuously innovate and launch products that meet market demand, as the IP-themed snack food category is considered a non-essential consumer good [8]. Production and Supply Chain - While Jintian Animation operates five production bases, it also relies on third-party manufacturers for certain products, which poses risks if these suppliers face disruptions [10]. - The company has recorded net current liabilities of RMB 82.4 million in 2022, RMB 101.8 million in 2023, and RMB 1.9 million in 2025, indicating potential liquidity risks [10]. Fundraising Purpose - The funds raised from the IPO will be used to enhance product development capabilities, increase brand awareness, expand the sales network, enrich the IP portfolio, and seek strategic investment and acquisition opportunities [10].

Core Insights - The company is focusing on developing its own intellectual property (IP) to transition from an original design manufacturer (ODM) model to a self-owned IP development model, integrating cultural tourism and digital fields [3][5][6] - The first original IP, "柿崽" (Shizai), has been well-received, combining the cultural symbolism of the panda with a modern design aimed at young consumers [3][5][6] Company Strategy - The company aims to innovate and adapt to market changes, emphasizing the importance of owning content and copyrights for long-term growth [5][6] - The launch of "柿崽" marks a significant step in the company's transformation from a manufacturing-focused entity to a brand creator [5][6] Product Development - "柿崽" has developed a diverse product matrix with over 20 categories, including stationery, daily goods, and collaborative products with various brands [6] - The company is also venturing into NFTs and the metaverse, integrating digital products with its original IP [6][8] Market Expansion - The company employs a dual strategy of deepening its presence in overseas markets while breaking into domestic markets, focusing on a comprehensive sales network [7][8] - It has established partnerships with local retailers and is leveraging content e-commerce platforms to enhance product visibility and sales [7][8] Production Capacity - The company operates three production bases, ensuring capacity to meet increasing demand, particularly from overseas orders [7][8] - The Malaysian production base utilizes a collaborative model to enhance efficiency and reduce costs associated with tariffs and logistics [8] Financial Performance - The company reported a revenue of 803 million yuan, reflecting an 11.29% year-on-year growth [9] Talent Development - The company has initiated a "post-90s plan," with a significant proportion of leadership positions filled by younger employees to foster innovation [9] - Collaborations with universities are in place to build a talent and technology ecosystem, enhancing the company's innovative capabilities [9][10] Industry Outlook - The company believes that the cultural publishing industry has significant potential for growth amid digital transformation, driven by innovation and talent [10]