Summary of Key Points from the Conference Call Industry Overview - The report focuses on the global IP (Intellectual Property) lifecycle and its implications for the collectible toy market, particularly in China and Southeast Asia, which are expected to lead global growth with compound annual growth rates (CAGR) of 17.2% and 20% respectively from 2024 to 2029 [1][5][6]. Market Size and Growth - The global IP derivative market is projected to reach 14 trillion yuan (approximately 2.1 trillion USD) by 2024, with the IP toy market specifically estimated at 525.1 billion yuan (approximately 79.5 billion USD) [1][5]. - China's IP toy market is expected to grow at a CAGR of 17.2%, reaching 167.5 billion yuan (approximately 25.5 billion USD) by 2029 [1][6]. Key Segments in the Market - Major segments in the Chinese market include building and assembly toys (26.8 billion yuan), static dolls (17 billion yuan), and plush toys (14.3 billion yuan) [6]. - There is significant potential for per capita spending on IP toys in China, which is currently 5-7 times lower than in Japan and the United States [6]. Competitive Landscape - Chinese companies are rapidly emerging in the IP toy market, with six out of the top ten companies being Chinese, including Pop Mart and Blokus [7]. - The industry typically employs a revenue-sharing model with a gross merchandise volume (GMV) share of 5%-8%, while licensing fees account for 10%-15% of listed companies' revenues [7]. Global IP Licensing Market - The global IP licensing market is highly concentrated, with the top five licensors holding approximately 40% market share and the top ten around 50% [8]. - Disney remains the leading player due to its extensive IP portfolio and consistent content output, followed by Warner Bros and Sea World [8]. IP Success Factors - The success of an IP is often attributed to its operational strategies, which can extend its lifecycle and enhance monetization opportunities [2]. - High-value IPs like Pokémon, Hello Kitty, Winnie the Pooh, and Mickey Mouse have generated over 50 billion USD in cumulative revenue, typically requiring over 30 years of history and a diversified commercial system [9]. Disney's IP Strategy - Disney has built a vast IP matrix through both organic growth and acquisitions, owning between 1,000 to 2,000 core IPs [10][17]. - The company has successfully maintained its IP relevance through continuous content updates and strategic partnerships [10][17]. Case Studies of IPs - **Hello Kitty**: Launched in 1974, it has a multi-layered monetization system and has successfully expanded its audience demographics over the years [24][25]. - **Mickey Mouse**: As a cultural icon since the 1930s, it has leveraged merchandise licensing and media adaptations to maintain its influence [26]. - **Pokémon**: Initially launched in 1996, it has seen rapid growth through innovative gaming and media strategies, achieving a GMV of nearly 120 billion USD in recent years [30][31]. Future Outlook - The report suggests that the Chinese IP toy market has a promising future, driven by increasing consumer spending and the emergence of local players [6][32]. - Companies like Pop Mart are expected to continue their growth trajectory, supported by a strong IP and product matrix [32][33].

Core Viewpoint - 52TOYS has initiated its IPO process, marking its entry into the capital market after nearly a decade of operation, but faces significant challenges in profitability and market position compared to competitors like Pop Mart and Blok. [1][3][7] Financial Performance - 52TOYS reported revenues of 463 million, 482 million, and 630 million RMB for 2022, 2023, and 2024 respectively, with growth rates of 4.10% and 30.70% in 2023 and 2024 [9] - The company has incurred net losses of 1.7 million, 71.9 million, and 122 million RMB from 2022 to 2024, totaling approximately 200 million RMB in losses [3][9] - Adjusted net profits are projected to turn positive in 2023 and increase in 2024, but remain significantly lower than leading competitors [3][9] Market Position - 52TOYS claims to be the "third largest IP toy company" in China, with a GMV of 930 million RMB and a market share of 1.2% in 2024, but is far behind Pop Mart's GMV of 8.72 billion RMB and market share of 11.5% [7][8] - The company relies heavily on licensed IPs, with 50.2%, 59.3%, and 64.5% of its revenue coming from licensed IPs over the past three years, indicating increasing dependency [10] Management and Ownership - CEO Chen Wei and other executives cashed out nearly 60 million RMB before the IPO, exceeding the company's annual profit [4][5] - The company has undergone multiple financing rounds since 2018, raising its valuation from 200 million to over 4.2 billion RMB [5] Operational Efficiency - 52TOYS has faced challenges in operational efficiency, with high inventory levels and accounts receivable impacting cash flow [13][14] - The company's inventory turnover days have improved but still lag behind competitors, indicating potential issues with product movement [14][16] Future Prospects - The company plans to allocate 20% of IPO proceeds to diversify its IP matrix and enhance product design, aiming to develop its own IPs [20] - 52TOYS is expanding into overseas markets, with international revenue growing from 35.36 million RMB in 2022 to 147 million RMB in 2024, but faces stiff competition [23][24] Challenges Ahead - The reliance on licensed IPs poses risks, especially with key contracts nearing expiration, which could affect future revenue [11][10] - The company must navigate a competitive landscape in overseas markets, where established brands like Pop Mart already have a strong presence [24][25]

Core Viewpoint - The rise of the "Guzi Economy" has made trendy toys a hot investment area, with multiple IP toy companies, including 52TOYS, preparing for IPOs in Hong Kong, driven by strong consumer demand from young people [1][3][5]. Industry Overview - The IP toy sector is a significant subfield within the trendy toy industry, focusing on toys associated with intellectual property [3]. - 52TOYS, founded in 2015, offers a variety of IP toy products, including static and movable dolls, wind-up toys, transforming robots, and plush toys [3]. - The company has submitted its prospectus for an IPO, with Citigroup and Huatai International as joint sponsors [3]. Market Dynamics - The investment trend in trendy toys is accelerating, with 52TOYS being the latest in a series of companies, including Pop Mart and TOP TOY, seeking to enter the capital market [5]. - The Chinese trendy toy and cultural creative industry is rapidly advancing towards capital transformation, with a more mature industry ecosystem compared to 2020 [5]. Consumer Behavior - Young consumers are increasingly willing to spend on emotional purchases, as evidenced by their enthusiasm for blind box toys, which are seen as social currency [7][9]. - The emotional connection to trendy toys is highlighted by consumers expressing their feelings through the toys they choose, indicating a shift towards emotional consumption [9]. Financial Performance - 52TOYS reported revenues of 463 million yuan, 482 million yuan, and 630 million yuan for 2022, 2023, and 2024, respectively, with net losses increasing from 1.708 million yuan to 122 million yuan over the same period [11]. - The company's reliance on licensed IP products is significant, with 64.5% of its revenue in 2024 coming from licensed IP, compared to 12.3% for Pop Mart [11]. Competitive Landscape - The competitive environment in the trendy toy market is intensifying, with companies needing to innovate in design and avoid over-reliance on licensed products to maintain user engagement and valuation [11][13]. - Industry experts emphasize the importance of design innovation and caution against unhealthy market practices, such as artificial scarcity and speculation [13].

Core Viewpoint - The Chinese collectible toy company 52TOYS has submitted its IPO application to the Hong Kong Stock Exchange, aiming to capitalize on the booming market for IP-based toys and collectibles [1][3]. Group 1: Company Overview - 52TOYS, founded in 2015, has established itself as the third-largest player in the domestic collectible toy market, with a revenue of approximately 6 billion RMB [6][11]. - The company has undergone several funding rounds, raising 1 billion RMB in 2018 and 4 billion RMB in 2021, demonstrating steady growth despite challenges such as the pandemic [6][7]. Group 2: Financial Performance - 52TOYS reported revenues of approximately 4.6 billion RMB, 4.8 billion RMB, and 6.3 billion RMB for the years 2022, 2023, and 2024, respectively, reflecting a compound annual growth rate of about 16.7% [7][8]. - The company has faced losses for three consecutive years, with a projected loss exceeding 1 billion RMB in 2024, but expects adjusted profits of 19.1 million RMB and 32.1 million RMB in 2023 and 2024, respectively [8][25]. Group 3: Market Position and Competition - As of May 27, 2023, 52TOYS has an estimated valuation of approximately 1.87 billion RMB based on a recent investment from Wanda Film, which holds a 7% stake in the company [5][3]. - The market capitalization of leading competitors, such as Pop Mart and Blok, is significantly higher, with Pop Mart valued at 313.17 billion HKD and Blok at 38.46 billion HKD [5][25]. Group 4: IP Strategy - 52TOYS generates a substantial portion of its revenue from licensed IPs, with the proportion of revenue from licensed IPs increasing from 50.2% in 2022 to 64.5% in 2024 [14][11]. - The company has developed over 30 proprietary IPs and collaborates with 85 experienced designers and 40 artists to enhance its product offerings [16][11]. Group 5: Future Plans - 52TOYS aims to expand its retail presence significantly, planning to establish over 100 self-operated stores in China and internationally within the next three to five years [26][25]. - The company is also focusing on increasing its overseas market revenue, which has grown from 7.6% in 2022 to 23.4% in 2024 [26][25].

Core Viewpoint - 52TOYS, a Chinese toy manufacturer established in 2015, is set to go public on the Hong Kong Stock Exchange, becoming the third mainland toy company to list after Pop Mart and Bloks [2]. Company Overview - 52TOYS has established long-term partnerships with over 30 globally recognized brands, including Disney's Toy Story series, and has developed its own intellectual properties (IPs) [2]. - As of December 31, 2024, 52TOYS owns over 100 IPs, including 35 proprietary and 80 licensed IPs, with its Crayon Shin-chan and Tom and Jerry product lines ranking first in China for similar IP products [2]. Competitive Advantage - The company's core competitive advantage lies in its unique "IP Hub" strategy, offering various types of IP toys, including static figures, movable figures, wind-up toys, transforming mechas, assembly toys, plush toys, and related merchandise [4]. - 52TOYS has a rare multi-category operational capability in the IP toy industry, launching over 500 new SKUs annually and having nearly 2,800 SKUs available for sale as of the last feasible date [6]. Financial Performance - Revenue has grown from 463 million RMB in 2022 to 630 million RMB in 2024, with a compound annual growth rate (CAGR) of 16.7% [6]. - The sales composition includes 64.5% from licensed IP products, 24.5% from proprietary IP products, and 10.8% from externally sourced products [6]. Sales Network - 52TOYS has established a comprehensive sales network, reaching 4.7 million registered members, with 336 domestic distributors and 90 overseas distributors, and over 20,000 retail outlets [7]. - The sales channels consist of 66.8% from distributors, 30.9% from direct sales, and 2.1% from consignment sales [6]. Strategic Partnerships - Recently, Wanda Film announced an investment in 52TOYS, raising its valuation to over 4.2 billion RMB. This partnership aims to leverage both companies' strengths in IP toy product development, marketing, and other related areas [8]. International Expansion - 52TOYS is focusing on international markets for future growth, having entered Japan and the U.S. in 2016 and 2018, respectively, and establishing authorized brand stores in Southeast Asia, North America, and other regions [9]. - The company reported a 250% year-on-year increase in overseas sales in the first half of the year, with North American sales quadrupling and Southeast Asian sales increasing tenfold compared to the previous year [9]. Market Potential - The IP toy market in Southeast Asia is projected to grow from 18.1 billion RMB in 2024 to 45.1 billion RMB by 2029, with a CAGR of 20% [9]. - Compared to mature markets, the top three companies in Japan and the U.S. hold 72.2% and 49.3% market shares, respectively, while the top ten companies in China only account for 46.1%, indicating significant consolidation potential in the industry [11].

Core Viewpoint - The company Lezi Tiancheng, a leading IP toy company in China, is seeking to go public in Hong Kong despite facing three consecutive years of losses and a significant liquidity gap of 590 million yuan [1][12]. Company Overview - Lezi Tiancheng ranks third in the Chinese IP toy market with a market share of 1.2% based on 2024 GMV, and it has a comprehensive operational model covering IP incubation, product design, flexible supply chain, and sales channels [1][11]. - The company reported revenues of 630 million yuan in 2024, with a compound annual growth rate (CAGR) of 16.65% over the past three years, but has incurred pre-tax losses of 23 million yuan, 68 million yuan, and 116 million yuan from 2022 to 2024, indicating a trend of increasing losses [1][7]. Business Model - Lezi Tiancheng operates on a dual-driven model focusing on both proprietary IP and licensed IP, with 35 proprietary IPs and 80 licensed IPs successfully incubated and operated by the end of 2024 [2][3]. - The revenue from proprietary IP was 154 million yuan in 2024, growing at a CAGR of 8.14%, while licensed IP revenue reached 406 million yuan, with a CAGR of 32.12%, indicating a significant increase in the contribution of licensed IP to total revenue [2][3]. Financial Performance - The company's gross margin has shown an upward trend, with gross margins of 28.9%, 40.5%, and 39.9% from 2022 to 2024. However, the company has faced continuous losses primarily due to non-recurring items, particularly the fair value changes of financial liabilities related to previous financing agreements [7][12]. - As of March 2025, the company had cash and cash equivalents of 168 million yuan, with a net working capital deficit of 590 million yuan, but it has no interest-bearing debt [7][12]. Market Potential - The IP derivative market in China is projected to reach 1.742 trillion yuan in 2024, with the IP toy segment accounting for 756 billion yuan, representing over 40% of the market [8][11]. - The overseas market, particularly Southeast Asia, has shown significant growth potential, with Lezi Tiancheng's overseas revenue reaching 147 million yuan in 2024, growing at a CAGR of 105% over the past three years [11][12]. Competitive Landscape - The Chinese IP toy market is relatively fragmented, with the top ten players holding a combined market share of 46.1%. Lezi Tiancheng's competitors, such as Pop Mart, are actively expanding their overseas presence and diversifying their product offerings [11][12]. - The company has been increasing its investment in licensed IP, collaborating with well-known IPs like Crayon Shin-chan and Disney, which has contributed to its revenue growth [3][4].

Group 1: Market Performance - A-share market saw active performance in the "Guzi Economy" concept stocks, with companies like Yuanwanggu, Jinghua Laser, and Shifeng Culture hitting the daily limit, while Aofei Entertainment surged over 7% with a trading volume of nearly 2.2 billion yuan [1] - In the Hong Kong market, Pop Mart's stock rose by 0.27%, bringing its total market capitalization to 296 billion HKD, with a year-to-date increase of nearly 146% [1] Group 2: Company Developments - Beijing Lezitiancheng Cultural Development Co., Ltd. (52TOYS) submitted its prospectus to the Hong Kong Stock Exchange, with Citigroup and Huatai International as joint sponsors, marking another toy company entering the Hong Kong market [1] - 52TOYS, founded in 2015, offers a variety of IP toy products including static and movable dolls, wind-up toys, transforming mechas, and plush toys [1] Group 3: Institutional Research Interest - Institutional interest in "Guzi Economy" concept stocks has surged, with 7 companies receiving over 100 institutional research visits this year, led by Shunwang Technology with 228 visits [2] - Companies like Jibite and Mankalon also received over 180 visits, indicating strong institutional engagement in the sector [2] Group 4: IP and Product Development - Aofei Entertainment's stock rose over 7%, supported by its ownership of popular IPs such as "Balala the Fairies" and "Pleasant Goat and Big Big Wolf," and its recent expansion into the trendy toy business [3] - Aofei is collaborating with major companies like Mihayou and Tencent for copyright licensing to develop trendy toy products, focusing on categories like "Didi Le" and "Candy Particles" [3] - The company is also integrating AI with its national IPs, with AI smart toys like "Smart Pleasant Goat" already in mass production and showing a significant growth trend in demand compared to 2024 [3]

Core Viewpoint - 52TOYS, a Chinese toy company, is set to list on the Hong Kong Stock Exchange, aiming to differentiate itself in the competitive toy market by leveraging unique toy forms and technology patents for originality and market share [2][6]. Group 1: Company Overview - Founded in 2015, 52TOYS specializes in various toy categories, including static and movable dolls, mechanical toys, and plush toys, ranking second in China's multi-category IP toy market by GMV in 2024 [3][4]. - The company's revenue for 2022, 2023, and 2024 is projected to be 463 million, 482 million, and 630 million CNY, respectively, with net losses increasing from 1.71 million to 122 million CNY during the same period [3][4]. Group 2: Revenue Sources - Over 60% of 52TOYS' revenue comes from licensed IP and distributors, with licensed IP sales accounting for 50.2%, 59.3%, and 64.5% of total revenue from 2022 to 2024 [4][5]. - The company has seen a decline in self-owned IP sales as a percentage of total revenue, dropping from 28.5% in 2022 to 24.5% in 2024 [4]. Group 3: Market Strategy - 52TOYS has expanded its distributor network significantly, increasing from 295 to 426 distributors from 2022 to 2024, while the number of self-operated stores has decreased from 19 to 5 [5][6]. - The company has partnered with Wanda Group for strategic cooperation, which includes funding and marketing collaboration, aimed at enhancing market penetration and brand differentiation [6][7]. Group 4: International Expansion - 52TOYS has initiated an overseas expansion plan, targeting North America and Southeast Asia, with overseas revenue growing from 35.37 million to 147 million CNY between 2022 and 2024, representing a compound annual growth rate of over 100% [8][9]. - Despite the growth, the company faces intense competition in international markets, particularly from established players like Pop Mart, which has seen significant revenue increases in the same regions [9][10].

Core Viewpoint - The market for IP toys in China is experiencing significant growth, with companies like Pop Mart and Blok increasing in value, while 52TOYS is preparing for an IPO despite its smaller market share and revenue compared to its competitors [1][5]. Company Overview - 52TOYS ranked third in GMV among Chinese IP toy companies in the previous year, with a GMV of approximately 0.93 billion RMB, which is about 1/9 of Pop Mart's GMV [5][6]. - The company was founded in 2015 by Chen Wei and Huang Jin, focusing on developing toys based on various IPs, including static figures, movable figures, and plush toys [3][5]. Financial Performance - 52TOYS has shown steady growth over the past three years, with revenues of 0.463 billion RMB in 2022, 0.482 billion RMB in 2023, and projected revenues of 0.630 billion RMB in 2024 [6][18]. - The company reported a net loss of 0.170 million RMB in 2022, 0.719 million RMB in 2023, and is projected to incur a net loss of 1.22 billion RMB in 2024 [6][18]. Market Position - In 2024, the GMV for Pop Mart, Blok, and 52TOYS is projected to be 8.72 billion RMB, 4.30 billion RMB, and 0.93 billion RMB respectively, indicating a significant gap between 52TOYS and its competitors [5][7]. - 52TOYS relies heavily on licensed IPs, with over 64.5% of its revenue coming from licensed products, particularly from the Crayon Shin-chan IP, which contributed over 40% of its GMV [10][12]. Sales Channels - The majority of 52TOYS' sales come from distribution channels, with over 66.8% of revenue generated through distributors, while direct sales account for 30.9% [14][15]. - The company has reduced its number of physical stores from 19 at the end of 2022 to 5 as of May 2024, while planning to open over 100 new stores in the coming years [15][17]. International Expansion - 52TOYS has been expanding its international presence since 2017, with a focus on establishing over 100 self-operated stores globally to enhance brand influence and profitability [19]. - The revenue from overseas markets has been increasing, with projections showing a rise from 0.353 billion RMB in 2022 to 1.47 billion RMB in 2024, accounting for 23.4% of total revenue [18].

Core Insights - 52TOYS is set to go public in Hong Kong, becoming the fifth trendy toy company to do so, following names like Miniso and Pop Mart [1] - The company operates with a dual model of self-owned IP and top-tier licensed IP, holding 35 self-owned IPs and 80 licensed IPs as of 2024 [2] - 52TOYS has shown significant growth in overseas markets, with revenue increasing from 35 million to 147 million yuan from 2022 to 2024, reflecting a compound annual growth rate (CAGR) of over 100% [3] Group 1: Company Position and Financials - 52TOYS is the second-largest multi-category IP toy company in China, with projected revenues of 630 million yuan in 2024, growing at a CAGR of 16.7% from 2022 to 2024 [1] - The company reported losses of 1.71 million yuan in 2022, 71.93 million yuan in 2023, and 122 million yuan in 2024, although it achieved adjusted profits of 19.01 million yuan and 32 million yuan in 2023 and 2024 respectively [1] Group 2: Revenue Composition and IP Strategy - The revenue composition shows that licensed IP contributes 64.5% of total income, with self-owned IP accounting for 24.5% in 2024 [2] - Notable licensed IPs include popular franchises like Crayon Shin-chan and Disney characters, with Crayon Shin-chan toys alone generating over 380 million yuan in GMV in 2024 [2] Group 3: Market Dynamics and Challenges - 52TOYS has the lowest gross margin among its peers, at 39.9% in 2024, compared to Pop Mart's 66.8% and other competitors [4] - The reliance on distributors and online discounts has negatively impacted profit margins, with distributor sales accounting for 67% of revenue and online direct sales contributing only 31% [4] Group 4: User Loyalty and Product Development - Building user loyalty is essential for improving profit margins, as seen in competitors like Pop Mart, which avoids discounting and relies on strong direct sales [5] - 52TOYS focuses on developing its own IPs across various categories, including trendy, sci-fi, and cultural IPs, with a particular emphasis on the "Beast Box" series that expands into comics and novels [5][6] Group 5: Industry Outlook - The trendy toy industry is experiencing explosive growth, with the Chinese market expected to exceed 110.1 billion yuan by 2026 [6] - Recent investments and public listings in the sector indicate strong investor interest and potential for future growth, positioning trendy toy companies as valuable assets in the capital market [6]