Core Viewpoint - The company reported impressive financial results for 2024, with revenue reaching RMB 2.241 billion, a year-on-year increase of 155.6%, and a net profit of RMB -0.401 billion, up 94.59% year-on-year [1] Financial Performance - The company achieved a revenue of RMB 2.241 billion in 2024, reflecting a 155.6% increase compared to the previous year [2] - The net profit for 2024 was RMB -0.401 billion, which is a 94.59% increase year-on-year [1] Product and IP Focus - The company shifted its focus to character-building toys, with revenue from this segment reaching RMB 2.201 billion, a year-on-year increase of 186.22%, accounting for 98.2% of total revenue [2] - The four major IPs, Ultraman, Transformers, Hero Infinite, and Kamen Rider, contributed significantly to sales, with Ultraman generating RMB 1.096 billion (48.9% of total revenue) and showing a year-on-year growth of 96.83% [3] Sales Channels and Market Expansion - Offline sales through distributors accounted for the majority of revenue, with RMB 2.063 billion from offline channels, a 181.54% increase year-on-year, representing 93% of total revenue [3] - The domestic market saw revenue of RMB 2.177 billion, a 151.27% increase, while overseas revenue reached RMB 0.064 billion, a remarkable 518.16% increase year-on-year [3] Strategic Initiatives - The company introduced the concept of a "product ecosystem" at the global partner conference, emphasizing user needs and innovation in product development [4] - Plans for future growth include expanding product offerings to target female and adult consumers, deepening market penetration in lower-tier cities, and enhancing overseas market presence [4][5] Future Projections - Revenue projections for 2025-2027 are RMB 4 billion, RMB 6 billion, and RMB 7.8 billion, with year-on-year growth rates of 79%, 50%, and 30% respectively [5] - Expected net profits for the same period are RMB 0.95 billion, RMB 1.55 billion, and RMB 2.18 billion, with significant year-on-year growth rates [5]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [2][12]. Core Insights - The company reported impressive performance with a revenue of RMB 2.241 billion in 2024, representing a year-on-year increase of 155.6%, while the net profit attributable to the parent company was a loss of RMB 401 million, but this still marked a 94.59% improvement year-on-year [5][12]. - The company is focusing on building a "product ecosystem" and aims for global development over the next decade, with a strong emphasis on user needs and product innovation [10][12]. Company Overview - The latest closing price is HKD 145.00, with a total market capitalization of HKD 36.141 billion. The company has a total share capital of 249 million shares and an asset-liability ratio of 199.66% [4][5]. - The company has established partnerships with 50 globally recognized IPs and has a diverse product portfolio with over 600 SKUs [6][7]. Financial Performance - In 2024, the company achieved a revenue of RMB 2.241 billion, with a significant focus on character-building toys, which generated RMB 2.201 billion, accounting for 98.2% of total revenue [7][9]. - The company’s four major IPs, including Ultraman and Transformers, contributed significantly to revenue, with Ultraman alone generating RMB 1.096 billion, representing 48.9% of total revenue [7][9]. Sales Channels and Market Expansion - The majority of revenue growth came from offline distributors, which accounted for RMB 2.063 billion in sales, a year-on-year increase of 181.54% [9][11]. - The company is experiencing rapid growth in overseas markets, with a revenue increase of 518.16% year-on-year, indicating substantial growth potential [9][11]. Future Growth Prospects - The company plans to expand its product offerings to cater to adult consumers and women, aiming to capture a broader market segment [11]. - The company is also focusing on deepening its market penetration in lower-tier cities and enhancing its overseas operations, with expectations of significant growth in international markets [11][12]. - Revenue projections for 2025-2027 are estimated at RMB 4 billion, RMB 6 billion, and RMB 7.765 billion, with corresponding net profits of RMB 946 million, RMB 1.551 billion, and RMB 2.180 billion [12][14].