Image source: Bamboo Works
Key Takeaways:
Sunny & Sandy has filed to list in Hong Kong, reporting its sales volume more than tripled last year after an exclusive licensing deal for toys based on the blockbuster "Ne Zha 2"
The toymaker's integrated injection molding process and a new robot-operated "lights out" factory could give it an edge over rivals as it looks for the next big hit
Since Labubu took the world by storm last year, everyone on China's toy scene has been trying to cast itself as the next Pop Mart, creator of the toy sensation. Pop Mart certainly didn't start out that way at the time of its 2020 IPO. But its shares have risen manyfold since then, giving it a market value of HK$255 billion ($32.6 billion), more than five times that for the older-school Mattel (MAT.US), owner of the Barbie franchise.
The latest player with Pop Mart-style aspirations could be Sunny & Sandy (Hunan) Group Ltd. a formerly obscure toymaker from the city of Xiangtan in Central China's Hunan province, which filed an application for its own Hong Kong IPO last week.
Sunny & Sandy has some big backers, including Goldman Sachs and CICC as joint IPO sponsors, and investors including Hillhouse and Aurora Management. And with its latest funding round valuing the company at 4 billion yuan ($574 million), an IPO offering 20% of its shares could raise $100 million or more.
Unlike Pop Mart (9992.HK), which cultivated Labubu dolls on its own, Sunny & Sandy gets most of the intellectual property (IP) behind its toys through third-party licensing deals. Like just about everyone else, it says it's also considering developing its own IP, which is typically a far more profitable business model but require extensive marketing and a bit of luck to gain traction. Yet another Pop Mart wannabe already in the Hong Kong IPO queue is retailer Miniso's (MNSO.US; 9896.HK) Top Toy unit.
Sunny & Sandy comes with some impressive metrics. It has recorded triple-digit year-on-year revenue growth over the last two years, including a 134% jump to 386.5 million yuan ($55.4 million) in the first nine ...
