Recently, Zhejiang Card Game Animation *** hereinafter referred to as "Card Game") recently submitted a prospectus to be listed on the main board of the Hong Kong Stock Exchange. Card games are mainly engaged in the animation derivatives industry, with "products, content, and experience" as the core of the whole industry chain layout.
As a leading company in the industry of "trading cards", the card game is most famous for the cards of the Ultraman series, from authorized IP development cards to more pan-entertainment products, the card track ushered in its first IPO.
IP empowers trading card faucets
In the prospectus, Kayou called itself "the No. 1 in the field of trading cards in the pan-entertainment toy industry". The pan-entertainment products referred to by card games are physical products developed based on IP, such as toys, stationery, clothing and other consumer goods.
The theme of a pan-entertainment product can be a story, a character, or any other IP content. The now popular Bubble Mart, as well as the world-famous Lego and Disney, all belong to this track.
Cardgame's products are mainly divided into toys and stationery, and toys, especially trading cards, are its core products. Trading cards are physical cards with a specific theme that can be collected, exchanged, or played by consumers. Among them, the suggested retail price of a single product of card game trading cards is between 1 yuan and 99 yuan. The suggested retail price of dolls is between $10 and $25, other toys are between $5 and $70, and stationery is generally retailed at $5 to $30.
Trading cards are the main revenue of card games**, and the prospectus shows that the revenue contribution of trading cards has always remained above 85%. According to the prospectus, the company's revenue in 2021, 2022 and the nine months ended September 30, 2023 was 229.8 billion yuan, 413.1 billion yuan, 195.2 billion yuan. Of these, the revenue from trading cards was 217 billion yuan, 393 billion yuan, 167.5 billion yuan, accounting for the proportion of overall revenue8%。For the full year of 2022 and the nine months ended September 30, 2023, its revenue from its Chinese furniture category increased from $20.9 million to $13.4 billion yuan.
According to CIC, in terms of gross merchandise turnover in 2022, Card Games ranked second in China's pan-entertainment products industry and pan-entertainment toy industry. Ranked first in the field of trading cards in the pan-entertainment toy industry; Ranked seventh in the pan-entertainment stationery industry. In 2021 and 2022, card games sold 127.1 billion packs (box.)8,600,000,000,000 packs (boxes) of trading cards.
As the leading enterprise of trading cards in China, the abundant IP reserves provide strong product support for card games. According to the prospectus, the card game currently has 44 IPs, including Ultraman, Ye Luoli, Card Game Three Kingdoms, Douluo Continent Animation, Egg Boy Party, Naruto, Detective Conan and Harry Potter and other well-known IPs.
According to the prospectus, in 2021, 2022 and the first nine months of 2023, the company's gross profit will be 133.5 billion yuan, 284.2 billion yuan, 131.4 billion yuan, and the corresponding gross profit margin was .8% and 673%。Trading cards have higher gross margins, respectively2%。In comparison, the gross profit margin of Pop Mart in 2021 and 2022 will be 614% and 575%。
While consolidating its position as a leader in trading cards, Card Games is also focusing on expanding its toy portfolio with the introduction of other product categories such as dolls, trading card collectibles, badges, stickers and acrylic stands, as well as stationery products such as pens and books.
In addition to the expansion of product categories, Kayou has been releasing new product series with different functions, IP themes and price points in a rhythmic manner according to existing product categories. According to the prospectus, in 2021, 2022 and the nine months ended September 30, 2023, Card Games launched 143, 190 and 177 toy series respectively, including 132, 168 and 121 trading card series in each period; It also launched zero, six and 52 stationery product series respectively.
Creativity leads to create a new situation of pan-entertainment IP
In recent years, consumer demand for popular IP toy products has been increasing, and China's pan-entertainment toy industry has grown rapidly. The market size of China's pan-entertainment toy industry is 17The CAGR of 8% increased from RMB30.5 billion in 2017 to RMB69 billion in 2022.
Pan-entertainment toys are the largest sub-category in China's pan-entertainment product industry, accounting for 53% of China's pan-entertainment product market in 20222%。The diversification of IP and pan-entertainment toys is expected to create a new growth engine for the pan-entertainment toy industry. The market size of China's pan-entertainment toy industry is expected to reach RMB128.9 billion by 2027, growing at a CAGR of 133%。
Among them, trading cards and dolls are two important subdivisions of China's pan-entertainment toy industry. Trading cards are the fastest-growing industry in China's pan-entertainment toy industry, with a market size of 784% growth. Trading cards accounted for 17% of the total market size of China's pan-entertainment toy industry in 20226%, and this share is expected to grow further to 24 by 20271%。The market size of the puppet industry is also growing rapidly, growing at a CAGR of 197%
The trading card industry in developed countries such as Japan and the United States has been developing for many years, and the per capita spending on trading cards in China is significantly lower than that of consumers in these countries, indicating that the industry has huge growth potential. Specifically, in 2022, Japan's per capita spending on trading cards was RMB923 yuan, while the per capita expenditure in the United States is 50 yuan7 yuan, which is 8 yuan for Chinese consumers to spend on trading cards6 dollars about 11 times and six times. In 2022, the market size of Southeast Asia's trading card industry reached RMB 1.7 billion in terms of gross merchandise value, and it is expected to grow rapidly in the next five years.
As a leading enterprise of trading cards, Card Game is not limited to existing achievements, but is constantly innovating in the field of IP and creating a new national style card surface. In terms of national creation and original IP products, card games have been deployed for many years, and have launched a series of products such as "Douluo Continent", "Qin Shi Mingyue", "Egg Boy Party" and "Master of Mystery", and the proportion of domestic IP cards continues to increase. Inspired by the "Dream of the Red Chamber" and "Three Kingdoms" in traditional Chinese culture, the "Dream of the Red Chamber-Grand Wonder" card was innovated to freeze the beauty of Chinese painting. At the same time, the original IP of the card game "Card Game of the Three Kingdoms" series has also created a "new Three Kingdoms style" that young people like.
There are many enterprises in China's pan-entertainment product industry, and the industry concentration is low. According to the data, in 2022, the top five companies in China's pan-entertainment product industry accounted for 25% of the total market share in terms of total merchandise transactions9%。Some well-known international brands occupy a large market share in the industry, and the market share of leading domestic pan-entertainment product companies has grown rapidly in recent years. In the face of the growing pan-entertainment market, card games are constantly exploring new boundaries.
It is reported that the card game has a complete industrial chain capacity, has established and continued to put into production of high-quality, high-capacity cards, pens, this book industrial system and logistics center, etc., with the world's top abrasive processing equipment and supporting facilities, in order to ensure the development and production of high-quality products, to meet the continuous release of emerging cultural consumer market demand.
The complete industrial chain has helped Card Games quickly launch a variety of stationery and cultural and creative derivatives, such as gel pens, booklets, eraser figures, badges, stickers and other IP peripherals that young people like are constantly new, with higher process superposition and higher precision restoration, so that consumers can't put it down. Behind the rapid launch of new products is the ability to quickly iterate card game products, a keen grasp of product direction, a diversified product matrix and comprehensive support for IP content.
At present, Kayou has three production bases in operation and two production bases under construction. The production base in Kaihua County, Zhejiang Province, began operations in August 2020, mainly producing trading cards; The production base in Yiwu City, Zhejiang Province, started operations in March 2023 and mainly produces stationery. The production base in Dongguan City, Guangdong Province, started operations in April 2023 and is mainly responsible for packaging dolls.
The vigorous development of China's pan-entertainment industry requires more local forces. The breakthrough and innovation of card games will undoubtedly lead the card industry and the domestic pan-entertainment industry into a new chapter, and further promote cultural self-confidence and innovative development.