Core Insights - The Chinese潮玩 (trendy toy) market has seen the emergence of popular products, with brands like TOP TOY and 52TOYS gaining significant traction on social media. The Labubu series from Pop Mart, created by artist Kasing Lung, has become a key revenue driver, contributing nearly half of the company's income in 2024 [1] - The sustainability of these popular IPs (intellectual properties) post-peak is a critical concern for the industry, prompting discussions on how companies can maintain growth [2][3] Group 1: Market Dynamics - The recent downturn in the new consumption sector has led investors to reassess growth logic in niche markets, including the潮玩 industry. The question of how companies can sustain performance after the initial hype is paramount [2] - Two typical paths for潮玩 companies are identified: one relies on short-lived viral IPs, while the other, like Hello Kitty, focuses on stable growth through multi-channel content output [2][3] Group 2: Content and Consumer Engagement - Content is essential for extending the lifecycle of IPs. Examples like Pokémon illustrate how diverse content offerings keep the brand visible to consumers [2] - New content forms, such as short videos and themed experiences, are becoming increasingly important as consumer habits evolve. Companies like Pop Mart are experimenting with various formats to keep their characters relevant in consumers' lives [3] Group 3: IP Portfolio Strategy - A diverse IP portfolio is crucial for mitigating risks associated with reliance on a single brand. Companies like Disney benefit from multiple IPs, which helps manage overall profitability even when one brand underperforms [4] Group 4: Valuation Considerations - The valuation of潮玩 companies is influenced by whether they are perceived as retail or content companies. In China, retail companies often face more cautious valuations compared to their counterparts in Western markets [5][6] - The ability to withstand market cycles is a key indicator of a company's quality, with financial metrics like inventory turnover and gross margin serving as indicators of effective strategy execution [6] Group 5: International Expansion - Chinese潮玩 brands are increasingly looking to expand internationally, with Pop Mart's Labubu series gaining attention in the U.S. market. The potential for success in the U.S. is bolstered by high consumer spending and cultural similarities [7][8] - Localization is critical for success in foreign markets, as demonstrated by Pop Mart's Crybaby series, which was designed by local talent in Thailand and quickly gained popularity [8]

Core Viewpoint - The Chinese潮玩 (trendy toy) market has seen the emergence of popular IPs, but sustaining growth post-peak is a critical challenge for companies in this sector [1][2]. Group 1: Market Dynamics - The潮玩 industry has experienced a surge in popularity with successful IPs like Labubu from泡泡玛特 contributing nearly half of the company's revenue in 2024 [1]. - The lifecycle of popular IPs varies, with some lasting only a few years while others, like Hello Kitty, achieve long-term success through stable growth and multi-channel content output [2][6]. - The shift in consumer content consumption habits has expanded the definition of content beyond traditional media to include short videos, collaborations, and theme parks [3]. Group 2: Content Strategy - Continuous engagement with consumers is essential for extending the lifecycle of IPs, with companies exploring various content forms to maintain relevance [3][4]. - The combination of multiple IPs can mitigate risks associated with reliance on a single brand, as seen with Disney's diverse portfolio [4]. Group 3: Valuation Considerations - The valuation of潮玩 companies is influenced by their classification as either retail or content companies, with a stable growth phase justifying a PE ratio of 20 to 25 [5][6]. - The ability to withstand market cycles and maintain differentiated advantages is crucial for financial performance, with key metrics including inventory turnover, gross margin, and return on equity (ROE) serving as indicators of effective strategy execution [6]. Group 4: International Expansion - The trend of Chinese潮玩 brands expanding internationally is notable, with泡泡玛特's Labubu gaining traction in the U.S. market [7][8]. - Localization is critical for success in foreign markets, as demonstrated by the Crybaby series designed by local Thai designers, which became a top-selling IP for泡泡玛特 in 2024 [8]. - Establishing a localized operational framework is essential for Chinese IP brands to thrive overseas, requiring enhanced resource integration and management capabilities [8].