Core Insights - ShiningSoul, a cultural technology brand under Shanghai Zhenyouqu, has successfully completed a multi-hundred million RMB Series A financing round led by Hillhouse Capital, with participation from Gao Rong Capital and Kaihui Fund, and Guoyuan Capital as the exclusive financial advisor [1] - The card game industry in China is experiencing a significant boom, particularly among the younger generation, with the market for pan-entertainment toys expected to reach 101.8 billion RMB in 2024, maintaining a compound annual growth rate (CAGR) of 15.8% from 2024 to 2029 [1] - ShiningSoul's focus on game IPs positions it well within the collectible trading card game (TCG) sector, which is projected to grow at a CAGR of 56.6% from 2019 to 2024 [1] Company Overview - ShiningSoul was co-founded by Yao Shuo Bin, chairman of Yaoji Technology, and industry veteran Sheng Chuan, who serves as CEO. The company was registered in March 2023 and unveiled its brand in November of the same year [1][2] - The company has quickly gained traction with its card series based on popular IPs such as "Identity V" and has sold out its initial stock within 26 days [4] Market Dynamics - The success of ShiningSoul's card products is attributed to the strong emotional connection players have with game IPs, which enhances their willingness to purchase physical cards [4][5] - The TCG market is particularly appealing to younger consumers, including elementary school students, who have increased purchasing power [5] Strategic Plans - Following the recent financing, ShiningSoul plans to accelerate its strategic initiatives, focusing on establishing deeper and longer-term partnerships with top global IPs and expanding its presence in key markets such as North America, Europe, and Southeast Asia [5][6] Competitive Landscape - The card game sector is witnessing a shift towards emphasizing competitive attributes, with ShiningSoul launching products like "Runeterra: League of Legends Card Game" to tap into the competitive gaming market [7] - Other companies in the sector, such as KAYOU, are also experiencing significant growth, with KAYOU reporting a revenue increase of 277.8% year-on-year in 2024 [6][9] Consumer Engagement - The integration of collection, competition, and social interaction within TCGs is driving consumer engagement and attracting capital investment, highlighting the potential for sustained growth in the sector [6][9]

Investment Rating - The industry investment rating is "Positive" [2][55] Core Insights - The implementation of the childcare subsidy policy is expected to benefit the entire fertility industry chain, with a basic standard of CNY 3,600 per child per year starting from January 1, 2025, which will enhance disposable income for childcare and boost demand for baby products and children's clothing [3][10] - The textile manufacturing sector shows decent performance, with companies like Bailong Oriental expecting a net profit of CNY 350-410 million for the first half of the year, representing a year-on-year growth of 50.2%-76.0% due to strong domestic and overseas orders [3][10] - The home furnishing sector faces pressure from declining real estate sales, with June data showing a year-on-year decrease of 8.1% in sales area and 13.6% in sales value, although home furnishing retail sales increased by 28.7% [4][11] - The furniture and accessories export market saw a slight year-on-year increase of 0.6% in June, but there are concerns about the purchasing intentions of U.S. retailers due to high inventory levels [4][12] - The secondary market prices for Bubble Mart's IPs remain stable, indicating strong demand exceeding supply, which is beneficial for maintaining the vitality of the IPs [4][12] Summary by Sections Textile and Apparel - The implementation of the childcare subsidy is expected to enhance demand for baby products and children's clothing, benefiting companies like Semir Apparel and Weigao Medical [3][10] - Bailong Oriental's profit forecast indicates a strong market with increased capacity utilization and profit growth [3][10] - There are uncertainties regarding tariffs and order demand in the second half of the year [3][10] Light Industry Manufacturing - The home furnishing sector is under pressure from real estate sales, but government subsidies are expected to stimulate demand [4][11] - The furniture export market is recovering, but U.S. purchasing intentions may decline due to high inventory levels [4][12] - Companies with strong dividend yields and brand advantages, such as Gujia Home, Sophia, and Zhibang Home, are recommended for investment [4][11] Market Performance - The textile and apparel industry rose by 1.45%, while light industry manufacturing increased by 1.84% in the recent week [5][13] - The performance of various sub-sectors within textiles and light industry shows mixed results, with some companies experiencing significant gains [5][13][25]

Group 1: Overview - The report indicates a weak recovery in domestic demand for the home furnishing sector, while the pan-entertainment toy industry is experiencing upward momentum driven by emotional consumption [15][39]. Group 2: Home Furnishing Industry - Domestic demand for home furnishings is under pressure, with a projected decline of 3.9% in building materials and home sales for 2024, but a gradual improvement is expected in Q4 2024 due to government subsidies [4][16]. - The introduction of a doubling of the old-for-new subsidy to 300 billion yuan in 2025 is anticipated to stimulate demand and help leading companies increase market share [4][28]. - Key companies in the home furnishing sector, such as Gujia Home and Sophia, are expected to show resilience in performance due to high dividend yields and strong brand advantages, with PE ratios generally below 15 [4][30][32]. - Export performance for home furnishing companies has been improving since November 2023, driven by overseas retailers replenishing inventory, although uncertainties remain due to changing tariff policies [4][33]. Group 3: Pan-Entertainment Toy Industry - The pan-entertainment toy industry in China is rapidly expanding, with GMV projected to grow from 48.8 billion yuan in 2019 to 101.8 billion yuan in 2024, reflecting a compound annual growth rate of 15.8% [5][51]. - The industry is categorized into card games and IP toys, with card games holding a 70% market share, while the IP toy market is more fragmented [5][54]. - Key players such as Pop Mart and Blokus are experiencing significant growth, with Pop Mart's revenue expected to increase substantially due to its diverse IP matrix and strong online and offline channels [5][61][64]. - The report highlights the importance of emotional consumption and the rise of local designers as key drivers for the future development of the pan-entertainment toy industry [5][51].

Core Viewpoint - The company KAYOU is attempting to relaunch its IPO process on the Hong Kong Stock Exchange after facing regulatory challenges and significant financial losses, while also grappling with compliance issues related to the sale of products to minors [1][3][13]. Financial Performance - KAYOU's revenue in 2024 saw a substantial increase of 277.78% year-on-year, surpassing 10 billion yuan, but the company reported a net loss of 1.242 billion yuan, a shift from a profit of 450 million yuan in the previous year [1][8]. - The fair value loss of KAYOU's Series A preferred shares increased dramatically to 3.867 billion yuan, up from a loss of 201 million yuan the previous year, marking a 1823.88% increase [9][10]. Market Position - KAYOU is recognized as a leading company in the pan-entertainment product sector, holding the top market shares of 13.3% in the pan-entertainment products industry and 21.5% in the pan-entertainment toys industry as of 2024 [3]. - In the collectible card segment, KAYOU commands a dominant market share of 71.1%, earning the nickname "King of Elementary School Cards" [3]. Regulatory Challenges - KAYOU's IPO application was initially submitted in January 2024 but was stalled due to requests from the China Securities Regulatory Commission for additional information regarding its equity structure and data security [1][3]. - The company has faced scrutiny for its marketing practices targeting minors, which have been criticized as exploitative, leading to compliance issues that could hinder its IPO prospects [13][16]. Corporate Governance - KAYOU's founder and CEO, Li Qibin, received a total compensation of 1.8 billion yuan in 2024, raising concerns about potential conflicts of interest and excessive remuneration in a highly concentrated ownership structure [11][12]. - The company has been criticized for its stock incentive plan, which was perceived as disproportionately benefiting the founder and related parties at the expense of minority shareholders [10][12]. Social Responsibility - KAYOU's business model has been labeled as "quasi-gambling," particularly in its marketing strategies aimed at children, which could lead to social issues such as compulsive spending and addiction [14][17]. - The company has been under pressure to implement effective measures to protect minors, especially following regulatory guidelines that prohibit the sale of blind box products to children under eight years old [16][17].

Company Overview and Industry Position - The company, 卡游有限公司, is a leading player in China's pan-entertainment product industry, primarily focusing on IP-based toys, especially collectible card games and stationery. According to ZhiShi Consulting, the company ranks first in various segments of the pan-entertainment product market, with market shares of 13.3%, 21.5%, 71.1%, and 24.3% in the overall pan-entertainment products, pan-entertainment toys, collectible card games, and stationery sectors respectively [1][31]. Core Competencies and Business Model - The company has established an integrated business model based on three core competencies: diversified product experience, engaging interactive operations, and robust production capabilities. The product matrix includes collectible card games, figurines, other toys, and stationery, with toy revenue accounting for 94.9% in 2024, of which collectible card game revenue is 8,200 million RMB, representing 81.5% of total revenue [2][32]. - Engaging interactive operations are enhanced through innovative gameplay designs and TCG events, with over 5,100 events held in more than 100 cities, effectively expanding brand influence [2][53]. - The company maintains strong production capabilities with three operational production bases, one base under construction, and advanced technologies, achieving stable gross margins between 65.8% and 68.8% from 2022 to 2024 [2][32]. Financial Performance and Business Data - The company's revenue for 2022, 2023, and 2024 is reported as 4,131.1 million RMB, 2,662.1 million RMB, and 10,056.9 million RMB respectively, indicating a significant year-on-year growth of 278% in 2024. Adjusted net profits for the same years are 1,619.7 million RMB, 933.8 million RMB, and 4,466.1 million RMB [3][50]. - As of the end of 2024, the company has developed a diverse IP matrix consisting of 70 IPs, including 69 licensed IPs and one proprietary IP, "卡游三国," collaborating with 43 IP partners. The sales network covers all 31 provinces in China, with 92.5% of revenue coming from distribution channels and 7.5% from direct channels [3][54]. Development Strategy and Future Plans - The company aims to expand its product and IP offerings, enhance production and supply chain capabilities, optimize distribution networks, and invest in team and technology development. Plans include launching more cultural IP products and increasing automation in production to shorten product launch cycles to 20-30 days [4][44]. - The company is also focusing on strengthening online channels and exploring overseas markets, leveraging existing IP licenses to expand into regions like Europe and Asia [4][44]. Brand and Product Layout - 卡游 has established a strong brand presence in the pan-entertainment product sector, recognized for its diverse product offerings centered around popular IPs. The collectible card game segment includes themes from well-known franchises, and stationery products have seen significant growth, with sales of 117.4 million units in 2024, a year-on-year increase of 108% [5][46].

Core Viewpoint - The rapid growth of the trading card game (TCG) market in China is exemplified by the success of the company 卡游, which has seen significant revenue increases and is preparing for an IPO amidst a booming demand for collectible cards driven by popular IPs like 哪吒 and 奥特曼 [1][4][31]. Group 1: Company Performance - 卡游's revenue surged from 22.98 billion RMB in 2021 to 100.57 billion RMB in 2024, marking a 277.8% increase year-on-year [5][9]. - The adjusted net profit for 卡游 increased from 7.95 billion RMB in 2021 to 44.66 billion RMB in 2024, reflecting a 378.16% growth [5][9]. - In 2024, 卡游's revenue from trading cards accounted for over 80% of its total revenue, solidifying its position as a leading player in the TCG market [7][9]. Group 2: Market Dynamics - The TCG market in China has rapidly expanded, with 卡游 capturing 71.1% market share in the trading card sector as of 2024 [9][14]. - The company has diversified its IP portfolio, increasing from 30 to 70 IPs between 2022 and 2024, with ten IPs contributing over 1 billion RMB each [14][42]. - The demand for collectible cards has been fueled by the popularity of various IPs, with 卡游's revenue from major IPs reaching 86.53 billion RMB in 2024 [14][42]. Group 3: Sales Channels and Strategies - 卡游's sales channels include 217 distributors and 351 卡游 centers, with a focus on both distribution and direct sales [16][18]. - The company has successfully leveraged online platforms and live-streaming to enhance customer engagement and drive sales, with a 390.68% increase in search interest for "拆卡" (card unpacking) on major e-commerce platforms [18][20]. - The average selling price of a card pack is 1.7 RMB, with a gross margin of 71.3%, indicating a highly profitable business model [12][14]. Group 4: Future Outlook and Challenges - 卡游 is preparing for a second attempt at an IPO in 2025, with a deadline for completion set for the end of 2026 [31]. - The company faces challenges related to regulatory scrutiny and the need for compliance with laws protecting minors in the context of card sales [49][50]. - The sustainability of 卡游's explosive growth remains a question, as the company must navigate market dynamics and potential shifts in consumer preferences [33][41].

Core Viewpoint - The company, 卡游, is preparing for an IPO despite reporting a net loss of 1.242 billion yuan in 2024, driven by rapid revenue growth and a strong market position in the collectible card industry [1][2]. Company Overview - 卡游's core business is collectible card games, with total revenue of approximately 10.057 billion yuan in 2024, where card business contributed 8.2 billion yuan, accounting for over 80% of total revenue [5]. - The company holds leading positions in various segments, including a 13.3% market share in the general entertainment products industry, 21.5% in the general entertainment toys sector, and a dominant 71.1% in the collectible card market [5]. Reasons for IPO - The company aims to expand its capital strength to support rapid growth, with a revenue increase of 277.8% year-on-year in 2024, necessitating significant funding despite the current losses [6]. - The IPO is intended to seize market opportunities and enhance competitiveness against international rivals, as China has become the largest card market globally, valued at 26.3 billion yuan [6]. - The company seeks to solidify its leading position in the industry and unlock valuation potential, given the low per capita spending on cards in China compared to Japan and the U.S. [6]. Competitive Advantages - 卡游 boasts a rich IP matrix with 70 IPs, including one proprietary IP, which enhances its product offerings and market appeal [8]. - The company has a robust sales network, covering all 31 provinces in China through 217 distributors, 32 flagship stores, and various online platforms [8]. - 卡游 capitalizes on the "Guzi Economy" trend, aligning collectible cards with national cultural IPs to meet the consumption preferences of Generation Z [8]. Industry Outlook - The collectible card industry in China has experienced a compound annual growth rate of 57% from 2019 to 2024, with a market size of 26.3 billion yuan in 2024, surpassing the U.S. and Japan [9]. - There is significant growth potential in the market, as per capita spending on collectible cards in China is only 18.7 yuan, compared to 119.3 yuan in Japan and 64.0 yuan in the U.S., indicating a possible 3-6 times increase in market size [9]. Impact of Losses on IPO - Market sentiment remains optimistic regarding the company's IPO despite the reported losses, as the losses are attributed to high initial investments during the expansion phase rather than poor business performance [10][11]. - The company maintains a high gross margin of around 70%, indicating strong core business profitability [11]. - The backing of prestigious underwriters such as Morgan Stanley, CICC, and JPMorgan reflects confidence in the company's future prospects [11].

Group 1 - Investment Rating: Outperform the market, maintained [2] - Core Viewpoint: The report highlights the growth potential of the collectible card game industry, with the company positioned as a leader in the market [3][4] Group 2 - Company Overview: The company is a leading player in China's collectible card game sector, focusing on a diverse product portfolio that includes toys, figurines, and stationery [7][9] - Industry Overview: The IP toy market is thriving, with collectible card categories experiencing the fastest growth [21][22] - Financial Performance: The company's revenue growth is driven by top IP products, with significant increases in sales figures [8][10] Group 3 - Business Model: The company employs an integrated business model that leverages product experience, interactive operations, and production capabilities [13][55] - Product Portfolio: The core product is collectible cards, complemented by figurines, other toys, and stationery, showcasing a diverse product range [54][80] - IP Matrix: The company has established a diverse IP matrix, enhancing its overall IP operation capabilities [83]

Group 1: Core Insights - The report highlights that the IP licensing is a crucial aspect of the pan-entertainment product industry in China, with large IPs having a broad audience base and consumer recognition [1][3] - The collectible card game market in China is in a rapid growth phase, with Kayo as the leading company, leveraging the Ultraman IP series to establish a solid business foundation [1][2] Group 2: Company Overview - Kayo is recognized as the leader in China's pan-entertainment product sector, with collectible card games as its core product. The company's development can be divided into three phases: initial layout from 2011-2018, IP matrix construction from 2019-2022, and diversification of products since 2022 [2] - By the end of 2024, Kayo's IP matrix is expected to include 70 IPs, with a concentrated shareholding structure where the founding couple holds 83.5% of shares [2] Group 3: Market Dynamics - The collectible card game market in China is projected to grow significantly, with a comparison of market sizes in 2024 showing China at RMB 14.7 billion, while the US and Japan are at RMB 21.9 billion and RMB 26.3 billion respectively [3] - The per capita spending on collectible card games in China is relatively low at RMB 18.7, indicating substantial growth potential compared to more mature markets like the US and Japan [3] Group 4: Competitive Landscape - Kayo focuses on collectible cards, while competitors like Pop Mart excel in blind boxes and plush toys, and LEGO specializes in building blocks, indicating differentiated competition in the toy industry [4] - Kayo's main IPs are primarily sourced externally, contrasting with Pop Mart's strong self-developed IP system [4] Group 5: Financial Performance - Kayo's revenue for 2024 is projected to reach RMB 10.057 billion, representing a year-on-year increase of 278%, primarily driven by significant growth in collectible card game revenue [5] - The adjusted net profit for 2024 is expected to be RMB 4.466 billion, nearly quadrupling from 2023, with ample cash reserves supporting further expansion of IP and product matrices [5]

Core Viewpoint - The company, 卡游, is advancing its IPO process in Hong Kong, capitalizing on favorable market conditions and its strong market position in the entertainment and toy sectors [1][2]. Group 1: Market Environment and IPO Context - The external environment has shifted favorably for 卡游, with younger consumers driving demand for emotional and social consumption [1]. - The company aims to leverage the current market dynamics to accelerate its expansion and showcase its unique business model of "content-driven consumption" [1]. - The Hong Kong market is increasingly welcoming to new economy enterprises, particularly those with high growth potential [1]. Group 2: Financial Performance - In 2024, 卡游 achieved total revenue of 10.057 billion yuan, a staggering increase of 278% year-on-year [2]. - Adjusted net profit reached 4.466 billion yuan, marking a 378% surge compared to 2023, reflecting the success of its diversified strategy [2]. Group 3: IP Diversification Strategy - 卡游 employs a dual-track model of "licensed IP monetization" and "original IP ecosystem extension," which provides both short-term certainty and long-term growth potential [3]. - As of December 31, 2024, 卡游 has a portfolio of 70 IPs, with 69 being licensed, contributing over 85% of total revenue from the top five licensed IP products [3][4]. - The company has established long-term relationships with key IP partners, ensuring revenue stability from core IPs [4]. Group 4: Product Diversification - 集换式卡牌 (trading card games) constitute over 90% of 卡游's total sales, with revenue from this segment growing from 3.93 billion yuan to 8.2 billion yuan, reflecting a compound annual growth rate of 27.8% [8]. - The company has successfully expanded into peripheral products and cross-category offerings, tapping into the growing market for related merchandise [8][9]. - 卡游's flexible supply chain and operational capabilities enable rapid product development across multiple categories, enhancing its competitive edge [10]. Group 5: User Engagement and Market Strategy - The company has demonstrated exceptional sensitivity in user operations, effectively targeting demographic shifts through data-driven marketing strategies [12]. - By integrating IP diversification as a content engine and product diversification as a growth lever, 卡游 has established a robust business model that combines card sales with derivative product expansion [12].