Core Insights - The trading card market is experiencing significant growth, with a compound annual growth rate of 25%, and is projected to exceed 30 billion yuan in the next three years [2] - The market is characterized by a stark contrast in pricing, with rare cards fetching high prices while ordinary cards are valued very low [2][5] - The industry is attracting capital interest, leading to a competitive race for listings among leading companies [6] Market Overview - The trading card market has evolved from childhood entertainment to a collectible asset for adults, with a diverse age demographic participating [2] - The market is divided into two main categories: Trading Card Games (TCG) that support gameplay and Collectible Card Games (CCG) that focus on rarity and collection [3] - The market is expected to reach 35.1 billion yuan by 2027 according to Citic Securities [2] Pricing Dynamics - Recent trends show a 5% decline in the price of simplified Chinese Pokémon cards, while Japanese versions have seen a slight increase of 0.33% [5] - A specific Pokémon card, "梦幻ex," has reached a price of 55,000 yuan, while common cards can be as low as 0.2 yuan, indicating a depreciation rate of over 91.67% for ordinary cards [5] - The disparity in card values highlights a market where high-value cards are sought after, while low-value cards struggle to find buyers [5] Online Trading and Community Engagement - Many transactions are conducted through online platforms, with dedicated apps providing market information and facilitating sales [4] - The demand for graded cards is increasing, as ratings significantly impact their marketability and price [5] - Live streaming has become a popular method for card sales, enhancing the emotional experience of unboxing and trading [5] Competitive Landscape - Card Game Company (卡游) holds a dominant market share of 71% in the TCG sector, with a projected revenue of 10.057 billion yuan in 2024, marking a 278% year-on-year growth [6] - Suplay (超级玩咖) has emerged as a strong competitor in the collectible card segment, with a revenue of 283 million yuan and a gross margin of 54.5% [6] - New entrants and investments from major companies like Pop Mart and miHoYo indicate a growing interest in the trading card market [7]

Core Insights - The trading card market has evolved from a niche hobby to a significant investment opportunity, with notable records in card sales, such as Pokémon cards at $5.275 million and sports cards at $12.932 million [1] - The global market for sports cards is projected to grow at a compound annual growth rate (CAGR) of 23% from 2020 to 2027, potentially reaching nearly $100 billion by 2027 [1] - The investment value of trading cards is now considered to surpass that of classic collectibles like antique cars and whiskey [1] Group 1: Types of Trading Cards - Trading cards are categorized into Trading Card Games (TCG) and Collectible Card Games (CCG), with CCGs having a longer history and focusing on collection, while TCGs incorporate gameplay elements [3] - The most popular TCGs include Pokémon, Yu-Gi-Oh!, and Magic: The Gathering, with Pokémon being favored due to its broad IP appeal and simplicity [5][6] Group 2: Market Dynamics - The trading card market has seen a cultural shift, influenced by social media and online platforms, which have increased visibility and engagement among collectors [14] - The emotional value associated with sports cards is significant, as they often represent personal memories tied to athletes' careers [8][10] Group 3: Investment Considerations - The value of trading cards is influenced by factors such as rarity, condition, and market demand, with older cards generally appreciating in value over time [10][11] - Newer cards may have volatile prices due to potential reprints and market saturation, while limited edition cards with unique identifiers tend to hold their value better [11][12] Group 4: Trading Strategies - Successful trading card investment requires understanding market trends, player performance, and the overall gaming environment [24][30] - Investors are advised to focus on cards from established IPs and to consider the long-term potential of their collections rather than short-term gains [30][67] Group 5: Market Challenges - The trading card market faces challenges such as counterfeit products and the need for reliable grading services to ensure authenticity and value [40][42] - The rise of online trading and auction platforms has created a more competitive environment, necessitating a deeper understanding of market dynamics for new entrants [60][63]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The domestic card market primarily relies on overseas high-quality IP, while the overseas market is dominated by proprietary IP [7][22] - The core advantages of trading card games (TCG) include longer lifecycles and broader monetization channels [8][10] - Recent efforts by domestic and international manufacturers have created a positive cycle in the trading card industry, potentially leading to new growth points [9] Summary by Sections Differences Between Domestic and International Card Markets - Domestic card companies mainly operate on overseas high-quality IP, while the US and Japan markets are mature with proprietary IP [7][22] - The card types differ, with TCG being predominant overseas and collectible card games (CCG) being more common in China [28] - The domestic card industry is expected to undergo accelerated integration across its value chain [40] Advantages of Trading Card Games - TCGs benefit from longer lifecycles due to evergreen IP and competitive content design [8][57] - The competitive nature and blind box attributes of TCGs enhance user loyalty and consumption frequency [62][71] - TCGs have diversified monetization channels through mobile games and other derivative products [8][10] Breaking Through in the Trading Card Industry - The industry is in a cultivation phase, with consumer habits around competitive play still developing [9] - Domestic manufacturers are enhancing their channel strategies and event experiences to foster a trading card culture [9][49] - The establishment of a robust ecosystem through collaboration between manufacturers and event organizers is crucial for market maturation [9][53]

Summary of the Conference Call on the Japanese IP Toy Industry Industry Overview - The Japanese IP toy industry is primarily dominated by Bandai and Tomy, with a rich history and significant market presence. Bandai specializes in character-based toys, achieving annual sales of 20 million to 30 million units, with peak sales of 60 million units for its second-generation products. Tomy is known for its original toys, such as vehicles and dolls [3][3]. Key Points and Arguments - **Market Challenges and Consolidation**: The industry faced challenges in the late 1990s due to demographic and economic downturns, leading to a significant consolidation in 2005-2006, resulting in the formation of Bandai and Tomy. Bandai integrated its supply chain through the acquisition of Bandai Namco, while Tomy expanded its product line [3][5]. - **Bandai's Competitive Advantage**: Bandai's core competitive advantage lies in maximizing IP value through close collaboration with Toei Animation, monopolizing the Japanese boys' toy market. Their strategy includes diversifying revenue streams across toys, mobile games, and PC games [3][6]. - **Gundam's Revenue Structure**: Gundam, as Bandai's most profitable IP, shows a balanced revenue contribution from both games and toys, indicating long-term growth potential for mech-building products. Bandai enhances operational efficiency through copyright acquisitions and rapid product design approvals [3][7]. - **Tomy's Recent Developments**: Tomy faced difficulties pre-pandemic due to a lack of localized IP resources, relying heavily on American collaborations. Post-pandemic, Tomy leveraged the global toy market's beta effect, transitioning to online marketing and expanding into adult entertainment products [3][9]. - **Sanrio's Business Model**: Sanrio exhibits cyclical development, with significant profit growth through IP licensing, particularly in the Chinese market, where partnerships with Alibaba Sports have yielded profit margins exceeding 40% [3][12]. - **Valuation Trends**: The valuations of Bandai, Tomy, and Sanrio differ significantly. Pre-pandemic, Tomy and Bandai were valued at 15-20 times earnings, while Sanrio maintained around 20 times. Post-pandemic, Sanrio's valuation surged to 50 times due to successful global licensing and a focus on adult consumer trends [3][13]. Additional Important Insights - **Potential in China's IP Toy Market**: The potential for China's IP toy market is substantial, with the children's market estimated to be over three times that of Japan. The overall market for all ages also shows similar growth potential [3][18]. - **Investment Opportunities**: Notable companies to watch in the investment landscape include Brook (leading in building toys), Kayo (card game leader), TOP TOY (rapid revenue growth), and Guangbo (capitalizing on the two-dimensional IP economy) [3][19][20]. - **Global Card Game Market Trends**: The global card game market has seen a resurgence post-pandemic, driven by increased demand for collectible cards, revealing significant potential in the domestic IP commercialization market [3][14][15].