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 Viewpoint - Suplay Inc is seeking to become the "first card stock" by submitting its prospectus to the Hong Kong Stock Exchange, highlighting its leading position in the collectible card market in China and its significant growth in revenue and profit margins [1][2][3]. Financial Performance - For the first three quarters of 2023 to 2025, Suplay reported total revenues of 146 million yuan, 281 million yuan, and 283 million yuan, with adjusted net profits of 15.97 million yuan, 64.81 million yuan, and 86.42 million yuan respectively [1][3]. - The company's flagship collectible card product saw sales volume increase from 1.56 million units to 4.58 million units, with average revenue per unit rising from 31 yuan to 43 yuan [1][3]. - The revenue share from collectible cards rose significantly from 32.9% to 70.0%, with gross margins increasing from 57.9% to 69.5%, leading to an overall gross margin exceeding 54% and an adjusted net profit margin of 30.5% [1][3][4]. Dependency on Licensed IP - Suplay's revenue growth is heavily reliant on licensed intellectual property (IP), with licensed IP contributing 54.2% of total revenue in 2023 and projected to increase to 95.0% by September 2025 [2][5][6]. - The company has seen a significant increase in revenue from licensed IP, with a 202.1% year-on-year growth in 2024, reaching 239 million yuan [2][5]. - The reliance on top licensed IP is increasing, with the top five licensed IPs accounting for 77.7% of revenue by 2025, while self-owned IP revenue has decreased by 80.2% [3][5][6]. Risks Associated with IP Licensing - Suplay's business model is vulnerable due to its dependence on non-exclusive licensing agreements, with many agreements set to expire soon, creating uncertainty for future revenue [5][6][19]. - The cost of IP licensing has risen significantly, with costs reaching 31.59 million yuan in the first three quarters of 2025, accounting for approximately 11.1% of total revenue [5][6][18]. - The company acknowledges that the success of its licensed IP products is contingent on factors beyond its control, such as the potential non-renewal of popular IPs [6][19]. Inventory and Valuation Concerns - Suplay has reported increasing inventory impairment provisions, with provisions exceeding the book value of inventory, indicating potential devaluation risks [7][20]. - The inventory value for 2023 and 2024 was reported at 21.08 million yuan and 33.92 million yuan, with impairment provisions of 8.83 million yuan and 23.28 million yuan respectively, showing a growing trend [20]. - Concerns are raised regarding the long-term value of collectible cards, as the market for collectible cards is projected to grow but remains a small fraction of the global entertainment goods market [21].

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].

Core Viewpoint - Suplay, a card company, has submitted its prospectus to the Hong Kong Stock Exchange for an IPO, positioning itself as a company focused on IP collectibles and consumer products, with a significant emphasis on high-end collectible cards and related services [1][3]. Financial Performance - Suplay has demonstrated rapid growth over the past three years, with revenue exceeding 280 million RMB in the first nine months of 2025 and an adjusted net profit of approximately 86.42 million RMB [3][12]. - The company reported a net profit of 64.82 million RMB in 2024, which is more than three times the previous year's profit, indicating strong momentum [12][14]. Market Positioning - Suplay's flagship brand, Kaka Wo, focuses on high-end collectible cards, particularly targeting adult consumers with a strong emotional connection to classic Western IPs [8][11]. - The company claims that over 99% of its consumers are aged 18 and above, and its products are designed to be more accessible than their American counterparts [11][12]. Competitive Landscape - The card industry has not seen a pure card company successfully complete an IPO, with most listed companies being upstream suppliers or IP giants [5][39]. - Suplay aims to differentiate itself from competitors by focusing on high-end collectible cards, while other companies like Card Game have faced challenges in their IPO attempts [5][12]. Revenue Composition - As of 2025, approximately 70% of Suplay's total revenue comes from collectible cards and related services, making it the core revenue driver for the company [12][14]. - The company's gross margin for collectibles has increased from about 58% to approximately 70%, reflecting its focus on high-margin products [14]. Industry Challenges - The card industry faces significant challenges, including reliance on IP licensing, which is becoming increasingly competitive and costly [39][41]. - Suplay's revenue from proprietary IP has dropped significantly, while revenue from licensed IP has increased, indicating a shift in its business model [43][45]. Consumer Sentiment and Market Dynamics - There are concerns regarding the secondary market for Kaka Wo cards, with reports of significant price drops and consumer dissatisfaction with product quality [15][20][25]. - The company acknowledges the challenges of controlling its distribution channels and the potential impact of secondary market pricing on its brand perception [19][39]. Regulatory Environment - The card industry is under scrutiny due to its business model, which often involves blind box sales targeted at younger consumers, leading to regulatory pressures [50][51]. - Suplay has reported that over 99% of its customers are adults, attempting to mitigate concerns about regulatory changes affecting its business model [51].

Core Viewpoint - Suplay, a card company, is preparing for an IPO, focusing on collectible cards and aiming to test the long-term growth potential of the collectible card business model in China [4][24]. Group 1: Company Overview - Suplay specializes in collectible cards, distinguishing itself from social trading cards popular among youth, with products including cultural heritage cards and popular IP collaborations [4]. - The company ranks first in the Chinese collectible non-combat card market by GMV for 2024, holding a market share greater than the second and third competitors combined [4]. - In the first nine months of 2025, Suplay reported revenues of 283 million yuan, with adjusted net profits nearing 100 million yuan [4]. Group 2: Business Model and Strategy - Suplay began as a secondary market trading platform for collectibles, addressing inefficiencies in the trading of blind box items [5][6]. - The company transitioned from being a platform to a brand by launching its own high-end collectible card brand, Kakawo, focusing on adult collectors [8][9]. - Suplay's revenue is increasingly driven by collectibles, which accounted for over 70% of total revenue in the first nine months of 2025, up from less than half in 2023 [14]. Group 3: Financial Performance - Suplay's revenue grew from 146 million yuan in 2023 to an estimated 281 million yuan in 2024, with a significant increase in net profit from 2.95 million yuan in 2023 to 49.12 million yuan in 2024 [13]. - The company's gross margin improved from 41.7% in 2023 to 54.5% in the first three quarters of 2025, driven by the higher margins associated with collectible cards compared to blind box products [14]. Group 4: Market Position and Competitive Advantage - Suplay has established partnerships with top global IPs, including Disney and MiHoYo, enhancing its product offerings and market appeal [9][12]. - The company targets a demographic of 18-35-year-olds, positioning its products as collectible assets rather than mere toys, which differentiates it from traditional card games [20][21]. - Suplay's unique market strategy includes a strong community and trading functionality within its app, allowing users to track real-time market prices for their cards, fostering a perception of cards as tradable assets [22]. Group 5: Future Outlook and Challenges - The collectible card market in China is projected to exceed 30 billion yuan by 2025, with Suplay aiming to capture a significant share of this growing market [19]. - Suplay faces challenges related to its dependency on a few key IPs for revenue and the need to diversify its distribution channels beyond traditional distributors [15][16]. - The company plans to use IPO funds to expand its IP portfolio globally and explore the development of trading card games (TCGs) to enhance the longevity of its products [24].

Core Viewpoint - Suplay, a collectible card company backed by miHoYo, has submitted its IPO application to the Hong Kong Stock Exchange, aiming to capitalize on its strong market position and growth potential in the collectible and consumer product sectors [1][13]. Company Overview - Suplay was established in 2019 and operates globally, focusing on IP collectibles and consumer products, with brands including Kakawoo, Heyfen, and Letao Valley [1]. - The company primarily engages in the sale of blind box toys through its mini-program on WeChat and direct sales via Tmall, as well as through retail and specialty card stores [2]. Business Model and Market Position - Suplay's CEO, Huang Wanjun, and CFO, Li Jing, have significant experience in operations and investment analysis, contributing to the company's strategic direction [5]. - As of September 30, 2025, Suplay's flagship brand Kakawoo ranks first in China's collectible non-combat card market, holding a market share greater than the combined total of its second and third competitors [5]. Consumer Demographics and Engagement - The company targets young consumers, with over 99% of its customers aged 18 and above, and maintains a high repurchase rate exceeding 75% for its collectible cards [8]. - Suplay's products are noted for their craftsmanship and collectible value, with approximately 80% of its cards receiving the highest PSA rating, compared to an industry average of 44.6% [8]. Financial Performance - Suplay's revenue has shown significant growth, with 2023 revenue at 146 million RMB, projected to increase by 92.5% to 281 million RMB in 2024, and 2025 revenue for the first nine months already surpassing the previous year's total [9]. - The company's gross profit margin has improved from 41.7% in 2023 to 54.5% in the first nine months of 2025, indicating a successful strategic shift towards higher-margin collectible card sales [10]. Revenue Composition - The revenue from collectibles has increased from 32.9% in 2023 to 70.0% in the first nine months of 2025, highlighting the growing importance of this segment to Suplay's overall business [10][11]. - Suplay also engages in the production of various IP-based consumer products, which complement its high-end collectibles [10]. Strategic Partnerships - MiHoYo is a significant strategic investor in Suplay, holding approximately 11.86% of the company after leading an $8 million investment in 2021 [13]. - The partnership has led to the development of various products based on MiHoYo's IPs, including popular franchises like Genshin Impact and Honkai Impact [15][17].

Core Viewpoint - Suplay Inc. has submitted its listing application to the Hong Kong Stock Exchange, with CICC and JPMorgan acting as joint sponsors [1] Company Overview - Suplay Inc. is a globally positioned company specializing in IP collectibles and consumer products, integrating well-known IPs into its product lines while promoting Chinese culture [3] - The flagship brand "Kakawo" holds a pioneering and leading position in China's collectible card market, focusing on high-end cards priced over RMB 10 [3] - The product portfolio consists of two main lines: collectibles and consumer products, catering to high-net-worth collectors, Gen Z consumers, and fans of popular entertainment [3] Market Position - According to Frost & Sullivan, Suplay Inc. ranks first in China's collectible non-battle card market by GMV in 2024, surpassing the combined total of the second and third-ranked companies, and is the only Chinese brand among the top five global collectible non-battle card brands [4] IP Resources - The company has a balanced mix of proprietary and licensed IPs, ensuring creative differentiation and a foundation for scalable commercialization [5] - As of September 30, 2025, the company owns three proprietary IPs, contributing approximately 40.6%, 14.4%, and 4.1% to total revenue in 2023, 2024, and the first nine months of 2025, respectively [5] - The top five licensed IPs contributed approximately 47.8%, 61.5%, and 77.7% to total revenue in the same periods [5] Financial Performance - The company reported revenues of approximately RMB 146 million, RMB 281 million, and RMB 283 million for 2023, 2024, and the first nine months of 2025, respectively [6] - The net profit attributable to equity shareholders was approximately RMB 2.95 million, RMB 49.12 million, and RMB 37.07 million for the same periods [6] - Gross profit margins were 41.7%, 45.8%, and 54.5% for 2023, 2024, and the first nine months of 2025, respectively [8] Industry Overview - The global pan-entertainment merchandise market is projected to grow from USD 44.8 billion in 2019 to USD 82.2 billion in 2024, with a CAGR of 12.9% [10] - The non-battle collectible card market is expected to reach USD 12 billion in 2024, with a CAGR of 19.5% from 2019 to 2024, and is projected to grow to USD 25.7 billion by 2029 [14] - The Chinese non-battle collectible card market is anticipated to reach RMB 6.2 billion in 2024, with a CAGR of 24.5% from 2019 to 2024 [14] Competitive Landscape - The global non-battle collectible card market is highly concentrated, with the top five players holding 71.5% of the market share in 2024, and Suplay Inc. being the only Chinese brand in the top five [16] - In the Chinese market, the top five companies hold a combined market share of 6.8%, with Suplay Inc. leading at 3.2% [17]

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