Source: Zhitong finance and Economics website
Zhitong finance app learned that, according to the disclosure of the HKEx on November 22, pop mart, a retail brand of fashion department stores, passed the listing hearing of the HKEx. Morgan Stanley and CITIC Securities acted as co sponsors.
According to the frost Sullivan report, bubble mart is the largest and fastest growing fashion toy company in China in terms of retail value (market share of 8.5%) in 2019 and revenue growth from 2017 to 2019.
IP is the core of bubble Mart service. As of June 30, 2020, bubble Mart has operated 93 IP, including 12 self owned IP, 25 exclusive IP and 56 non exclusive IP.
Bubble Mart has established a comprehensive and extensive sales and distribution network to reach consumers. As of June 30, 2020, bubble mart’s sales and distribution network includes (I) 136 retail stores mainly located in the mainstream business districts of 33 first and second tier cities in China; (II) 1001 innovative robot stores in 62 cities in China, which operate like vending machines and help bubble Mart expand its reach to consumers and provide interactive and interesting shopping experiences for fans; (I) II) bubble mart’s tmall flagship store, bubble box extractor, Paqu (online fashion toy community mobile app independently developed by bubble mart) and other mainstream e-commerce platforms in China; (IV) bubble mart’s Beijing international fashion show and Shanghai international fashion show; and (V) wholesale channels, mainly including 25 distributors in China, South Korea and Japan 22 distributors in 21 overseas countries and regions, such as Benxi, Singapore and the United States.
The fans of bubble Matt can be registered free of charge through online channels (which can be accessed on multiple platforms including WeChat and Alipay) and offline channels (such as retail stores). As of June 30, 2020, bubble Mart has a total of 3.6 million registered members.
The sales volume of bubble mart’s blind box products increased by 70.5% from 16111 in the nine months ended September 30, 2019 to 27476 in the nine months ended September 30, 2020, and increased by 70.6% from 7809 in the three months ended September 30, 2019 to 13323 in the three months ended September 30, 2020.
The average selling price of blind box products decreased by 6.1% from RMB 49 for the nine months ended September 30, 2019 to RMB 46 for the nine months ended September 30, 2020, mainly due to the increased sales promotion of bubble Mart in the three months ended September 30, 2020.
According to the frost Sullivan report, in 2019, the retail market of China’s trendy toys was RMB 20.7 billion in terms of retail value, accounting for 2.3% of the market size of China’s Pan entertainment market in terms of retail value in 2019. China’s trendy toy retail market is fragmented and full of competition. According to the frost Sullivan report, in 2019, the top five market operators accounted for 8.5%, 7.7%, 3.3%, 1.7% and 1.6% of China’s fashion toy retail market in terms of retail value.
Bubble mart’s competitors include international brands and local brands. The company competes on a number of factors, including brand recognition in China, fan base, popularity and quality of products, price, effectiveness of marketing and sales and distribution network. According to the frost Sullivan report, in 2019, bubble Mart ranked first in China’s fashion toy retail market in terms of retail value, with a market share of 8.5%.
The total revenue of bubble Mart increased by 225.4% from RMB 158 million in 2017 to RMB 515 million in 2018, and increased by 227.2% to RMB 1.684 billion in 2019. Total revenue increased by 50.5% from RMB 543 million for the six months ended June 30, 2019 to RMB 818 million for the six months ended June 30, 2020.
In 2017, 2018 and 2019, the gross profit of the company was 75.254 million yuan, 298 million yuan and 1.09 billion yuan respectively. In the same period, the gross profit rates were 47.6%, 57.9% and 64.8% respectively.
Bubble Mart recorded net profits of 1.569 million yuan, 9.9521 million yuan, 451 million yuan, 114 million yuan and 142 million yuan respectively in 2017, 2018 and 2019, as well as the six months ending June 30, 2020.
Purpose of fund raising
It is used to allocate part of the funds for bubble mart’s consumer access channels and overseas market expansion plans, for potential investment, acquisition of upstream and downstream companies in the industry’s value chain and the establishment of strategic alliances with such companies; for investment in technical initiatives to enhance the marketing and fan participation of bubble mart and enhance the digitalization of its business; to expand its IP For working capital and general corporate purposes.
Source: Zhitong finance and Economics website