Investment Rating - The report rates the card industry as "Outperform" [3] Core Insights - The card industry is identified as a "lightweight" growth engine within the global entertainment and cultural sector, integrating entertainment, collection, and culture [3][7] - The unique value logic of trading card games (TCGs) is based on their tactical value and scarcity, distinguishing them from ordinary cards [3][8] - The Chinese trading card market has rapidly grown, becoming the largest globally, with a market size projected to reach RMB 263 billion by 2024, reflecting a compound annual growth rate of 56.6% from 2019 [42][77] Summary by Sections 1. Card Industry Overview - Cards are categorized into game cards and collectible cards, with trading cards being a significant focus due to their strategic gameplay and community engagement [7][9] - Trading cards combine rule-based gameplay, cultural content, social attributes, and collectible aspects, creating a high-engagement player ecosystem [3][8] 2. Market Dynamics - The consumer base for card products is primarily elementary school students, with 70% of offline purchasers falling into this category [35] - The report highlights a strong purchasing habit among consumers, with 42% maintaining stable monthly purchases, indicating high user loyalty [37] 3. Regional Market Analysis - The U.S. market is characterized by a mature event system and a strong player base, while Japan leverages its anime IPs for card development, showcasing unique entertainment and social aspects [42][62] - The Chinese market has evolved from imitation to innovation, with local companies developing unique paths and capturing significant market share [79][81] 4. Business Model and Growth Logic - The card industry's business model is driven by IP, diverse products, and a multi-channel sales approach, with a focus on building an IP matrix and enhancing user engagement through events and online communities [84] - The average direct material cost for trading cards is projected to be RMB 0.25 per pack, with an average selling price of RMB 1.70 per pack, resulting in a gross margin of 71.3% [3]