Investment Rating - The report maintains a rating of "Buy" for Suplay, with a focus on its strong market position and growth potential in the collectible card industry [4]. Core Insights - Suplay is positioned as the leading company in China's collectible non-combat card market, with a market share of 3.2% as of 2024, significantly surpassing its closest competitors [10][28]. - The global market for entertainment products is projected to grow from USD 44.8 billion in 2019 to USD 82.2 billion in 2024, with a compound annual growth rate (CAGR) of 12.9% [28]. - The non-combat collectible card market is expected to reach USD 12 billion by 2024, with a CAGR of 19.5% from 2019 to 2024, and is projected to grow to USD 25.7 billion by 2029 [28][33]. - In China, the non-combat collectible card market is anticipated to grow to RMB 6.2 billion in 2024, with a CAGR of 24.5% from 2019 to 2024, and is expected to reach RMB 16.5 billion by 2029 [28][33]. Summary by Sections Company Overview - Suplay, founded in 2019, is the leading player in China's collectible non-combat card market, focusing on global expansion and promoting Chinese cultural IP [6][10]. - The company achieved revenues of RMB 281 million and RMB 283 million in 2024 and the first three quarters of 2025, respectively, representing year-on-year growth of 92% and 40% [6][15]. - Adjusted net profits for the same periods were RMB 65 million and RMB 86 million, with increases of 306% and 82% year-on-year [6][15]. Industry Analysis - The global entertainment product market is expanding rapidly, with significant growth in the non-combat collectible card segment, which is driven by IP globalization and increasing consumer engagement [28][39]. - The competitive landscape in China's non-combat collectible card market is relatively fragmented, with the top five companies holding a combined market share of 6.8% [28][39]. - Suplay's unique position as the only Chinese brand among the top five global collectible non-combat card brands highlights its competitive advantage [10][39]. Business Model - Suplay operates a dual-engine product strategy, focusing on both collectible and consumer-grade products, leveraging its strong IP portfolio to enhance brand engagement [51][48]. - The company has established a structured IP development and commercialization framework, successfully integrating both proprietary and licensed IP into its product offerings [59][60]. - Revenue from collectible products is expected to grow significantly, with projections indicating a strong increase in sales volume and average revenue per unit [49][52].

Core Insights - Suplay, the company behind the collectible card brand "Kakawo," has submitted a listing application to the Hong Kong Stock Exchange, having achieved over 400 million RMB in revenue from collectible cards and IP toys between 2023 and 2024 [1][12]. Market Overview - The global market for collectible non-combat cards is projected to grow from 12 billion USD in 2024 to 25.7 billion USD by 2029, with China’s market expected to increase from 6.2 billion RMB in 2024 to 16.5 billion RMB by 2029, reflecting a compound annual growth rate of 21.4% [2][13]. - Suplay ranks first in the Chinese collectible non-combat card market and is the only Chinese brand among the top five globally [2][13]. Company Development - Founded in 2019, Suplay experienced significant milestones in 2021, including an 8 million USD investment from miHoYo and the acquisition of the toy brand "Heyfen" [2][12]. - The company launched its collectible card product line in 2022, focusing on non-sport IPs to attract a broader audience, particularly women [3][14]. Product Lines - Suplay operates two main product lines: collectibles and consumer products, with collectibles centered around IP and limited editions [5][16]. - The pricing for collectible cards ranges from 59.9 RMB to 89.9 RMB per pack, while consumer products are priced between 19.9 RMB and 89 RMB [6][17]. Financial Performance - Suplay's revenue grew from 146 million RMB in 2023 to 281 million RMB in 2024, marking a 92.5% increase, with net profits rising from 2.95 million RMB to 49.11 million RMB in the same period [7][18]. - The share of revenue from collectibles increased significantly, accounting for 32.9% in 2023, 41.8% in 2024, and 70% in the first three quarters of 2025 [7][18]. Profit Margins - The gross margin for collectibles was higher than that of consumer products, with margins of 57.9%, 65.4%, and 69.5% for collectibles compared to 33.7%, 31.8%, and 19.3% for consumer products over the same periods [8][19]. IP Dependency - Suplay heavily relies on third-party licensed IPs, with licensed products contributing 54.2%, 85.1%, and 95% of total revenue from 2023 to the first three quarters of 2025 [9][20]. - The company has agreements with 22 IP licensors, but the non-exclusive nature of most agreements increases competition and market saturation [10][21]. Future Plans - Suplay plans to invest in extending existing IP licenses and acquiring new IPs to support global expansion, including entering markets in Asia, North America, and Europe [10][21].