Summary of Conference Call Records Company Overview - **Company**: 卡游 (KAYOU) - **Industry**: Card Game and Collectible Toys Key Points and Arguments Performance Metrics - In April 2025, the performance in East China declined by 40% year-on-year and 30% month-on-month to 110 million yuan, primarily due to the drop in popularity of major IPs like Nezha, leading to product sales fluctuations. National sales were approximately 500 million yuan (excluding GMV) [1][3][7]. - In May 2025, sales data showed increased volatility, with a year-on-year decline of about 80% compared to October last year and a month-on-month decline of about 60%. The share of Nezha IP in Q2 dropped from 53% in Q1 to 32%, while My Little Pony fell from 23% to 12%, indicating a significant shrinkage in major IP operations [1][4][5]. - The company plans to launch 600 new products in 2025 while maintaining a rapid turnover cycle to alleviate inventory pressure on distributors [1][12]. IP Management and Lifecycle - The company aims to extend the lifecycle of IPs by controlling product supply and demand balance. For instance, My Little Pony's lifecycle was extended from 8 months to 1.5-2 years through effective sales control [1][11]. - The Nezha IP is currently in a rapid decline, with expectations for overall revenue this year projected between 2 billion to 2.1 billion yuan [1][8]. Market Trends and Sales Channels - The collectible toy and blind box economy is performing well, with KAYOU being a representative company in this sector. However, the decline in major IPs like Nezha has led to performance fluctuations [2]. - Online sales accounted for nearly 30% in 2024, up from 15% in 2023, with a significant portion coming from Douyin's card-breaking system, which reached nearly 60% [4][18]. - The company plans to establish 1,000 experience stores in 2025 and explore exclusive agency models for stationery products [4]. Inventory and Distribution Challenges - The current card game market is in a cold season, limiting distributor profitability. KAYOU has reduced inventory turnover indicators to two weeks to alleviate pressure [1][12]. - The company has implemented strict requirements for distributors, including monthly order ratios for new products, to manage cash flow and inventory effectively [12]. Competitive Landscape - KAYOU's main competitors include Pikachu Society and Flash Soul, with the former having a richer IP reserve but weaker offline sales systems. Flash Soul ranks second in the domestic offline sales system [40]. - The company maintains a strong market position due to its robust offline sales system and brand influence, allowing it to effectively capture market demand during IP peaks [28]. Future Outlook - KAYOU's gross margin is currently at 70% and net margin at 40%, expected to remain stable as long as raw material prices do not rise [41]. - The company is exploring new growth avenues, including partnerships with non-traditional retail sectors like tea shops [30]. Consumer Behavior Insights - The demand for card products is influenced by the popularity of IPs, with male consumers showing a tendency to return to card purchases when popular IPs are released [21][35]. - The company adjusts its strategies based on consumer preferences, particularly focusing on popular IPs to attract adult players [36]. IP Exclusivity and Licensing - KAYOU has exclusive licensing for certain IPs like Conan, while others like Ultraman and My Little Pony are not fully exclusive, leading to a competitive landscape in other product categories [46]. Conclusion - KAYOU is navigating a challenging market environment with fluctuating IP popularity and inventory management issues. The company is focusing on extending IP lifecycles, enhancing online sales channels, and exploring new retail partnerships to sustain growth and profitability in the collectible toy industry.