Core Viewpoint - Here Group Ltd., formerly known as QuantaSing, has successfully transitioned from an adult education company to a pop toy maker, reporting significant revenue growth in its new business segment [1][2][4]. Business Transformation - The company entered the pop toy market in 2023 by acquiring Shenzhen Yiqi Culture Ltd., which owns the Wakuku franchise [3]. - Here Group has rebranded itself, dropping the QuantaSing name and ticker symbol, and began trading under the Here Group name on November 11 [4]. Financial Performance - In the latest quarter, Here Group reported revenue of 127 million yuan ($18 million), nearly doubling from 65.8 million yuan in the previous quarter [10]. - The company anticipates revenue growth to between 150 million yuan and 160 million yuan in the current quarter, with a projected total revenue of 750 million yuan to 800 million yuan for the fiscal year [11]. Market Position and Strategy - Here Group's revenue is primarily driven by its proprietary intellectual properties (IPs), with 97% of the latest quarter's revenue coming from three IPs, including 71% from Wakuku [8]. - Unlike competitors, Here Group focuses on self-developed and exclusively licensed IPs, which can lead to higher margins but also requires significant marketing efforts to establish brand recognition [9]. Stock Performance and Valuation - The stock price of Here Group has shown volatility, initially rising sixfold before experiencing a decline of over 60%, yet it remains more than double its starting value for the year [12]. - The current price-to-sales (P/S) ratio for Here Group is approximately 2.5, significantly lower than Pop Mart's 10.3, indicating potential upside if growth targets are met [13][16]. Marketing and Expansion Plans - The company is actively marketing its products through various initiatives, including a themed street in Shanghai and partnerships with state-run media [14]. - Here Group has opened its first offline stores in Beijing and Chongqing, with plans for further expansion into 20 other markets [14]. Profitability and Margins - The gross margin for Here Group's toy business improved to 41.2% from 34.7% in the previous quarter, although it remains below Pop Mart's 66.8% [15]. - The company reported an adjusted net loss of 17.1 million yuan for the latest quarter, showing slight improvement from a 19.3 million yuan loss in the previous period [15].

Financial Data and Key Metrics Changes - Total revenue for Q4 FY2025 reached RMB 617.8 million, with a net income of RMB 108 million, resulting in a net profit margin of 17.5% [18][19] - Sales and marketing expenses improved significantly to 47.6% of revenue from 69.2% in the previous quarter [19] - Gross profit for the quarter was RMB 467.6 million, with a gross margin of 75.7%, down from 85.9% in the same period last year [21] Business Line Data and Key Metrics Changes - Revenue from the property business totaled RMB 65.8 million, accounting for 10.6% of total revenue, indicating its growing significance [20] - Individual online learning services generated revenues of RMB 456.9 million, down from RMB 906.7 million in Q4 FY2024, primarily due to decreases in skills upgrading and financial literacy courses [20] - Revenues from enterprise services were RMB 35.7 million, down from RMB 56.6 million a year ago, due to a reduction in marketing services [20] Market Data and Key Metrics Changes - The company held over RMB 1 billion in cash and cash equivalents, providing a strong foundation for its transition into the property business [6] - Online GMV exceeded RMB 18 million in August, which is over nine times that of April [10] Company Strategy and Development Direction - The company is restructuring to divest all non-property businesses to focus exclusively on its high-growth property business [4][5] - The strategy includes strengthening IP creation, driving agile execution, and delivering sustainable returns to shareholders [15][16] - The company aims to capitalize on the cultural transformation driven by young, digitally savvy consumers seeking emotional connections and unique collectible experiences [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the property market and the company's ability to scale its IP portfolio and expand internationally [24][25] - The company expects revenues from the property business to be in the range of RMB 100 million-RMB 110 million for Q1 FY2026 and RMB 750 million-RMB 800 million for the full fiscal year 2026 [24][25] Other Important Information - The company has established a joint venture with Juehua Entertainment to leverage cross-industry resources for IP promotion and user engagement [54][55] - The company plans to open three to five flagship stores by the end of the year, enhancing its offline presence [13][38] Q&A Session Summary Question: Recent revenue run rate and confirmed order backlog - Management noted that Wakuku's growth has been explosive, with monthly production capacity reaching approximately 20 times the level at the beginning of the year, and confirmed order backlog is significant with a delivery rate of less than 50% [29][30] Question: Details on Last One's equity arrangements - The acquisition of Last One's remaining equity is in the settlement process, with approximately 60% paid in newly issued shares and 40% as long-term incentives vesting over eight years [32][33] Question: Revenue guidance and toy revenue surpassing education business - Management stated that guidance for FY2025 and FY2026 was based on a prudent assessment of market conditions, with expectations for continued growth driven by strong product performance and channel expansion [36][38] Question: Pipeline for new product categories - The company has a structured roadmap for IP launches and is exploring new product categories, including smaller figures and plush products, set to debut in Q4 [50][51] Question: Collaboration with Juehua Entertainment - The joint venture with Juehua Entertainment focuses on IP design and supply chain support, aiming to develop new IPs that leverage both companies' strengths [54][55]