Voice of Panda Economics The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO

The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO

The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO The duck finally ended the seventeen-year “rafting”. The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO Note from Titanium Media: This article is from WeChat public account China-Venture…

The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO

The duck finally ended the seventeen-year “rafting”.
The first share of new consumption in 2022 was born, a little yellow duck propped up an IPO

Note from Titanium Media: This article is from WeChat public account China-Venture (ID: China-Venture), author | Lv Pin, editor: Cao Weiyu, and published by Titanium Media with permission.

The little yellow duck finally knocked on the door of the Hong Kong Stock Exchange.

On January 17, Deying Holdings, the parent company of B.Duck, was listed on the main board of the Hong Kong Stock Exchange. On the day of listing, Deying Holdings opened at HK$2.6 per share, which once rose by more than 30%. As of press time, the total market value of Deying Holdings exceeded HK$2.7 billion.

It is worth noting that Deying Holdings has gone through an extremely difficult road to IPO.

As early as March 2019, Deying Holdings applied for listing on the GEM of the Hong Kong Stock Exchange, and then withdrew the application; in May 2021, Deying Holdings moved to the main board of the Hong Kong Stock Exchange for IPO. After the 6-month application expired, only one day passed. Deying Holdings once again attacked the Hong Kong Stock Exchange.

Such a rush to go public may be related to an expiring gambling agreement.

According to the prospectus, after Deying Holdings introduced Wisdom Thinker and Vantone in April 2021, it signed a supplemental agreement similar to the gambling agreement in July of the same year. This agreement sets a listing deadline. According to the agreement, Wisdom Thinker and Vantone require Deying Holdings to be listed before April 14, 2022, otherwise it must repurchase shares at an annual total return of 8%.

Deying Holdings finally got on the bus at the last minute.

A Chinese brand dream opened by a duck

B.Duck was originally created in 2005 by Xu Xialin, the founder of Deying Holdings and a Hong Kong designer. But this story also begins with a flock of ducks 30 years ago.

In 1992, a freighter carrying nearly 30,000 rubber ducks bound for Washington State, USA. It encountered a strong storm in the Pacific Ocean, the container was damaged, and countless ducks were scattered. This “fleet of ducks” accidentally began a global drift.

After 15 years, the duck fleet drifted 35,000 kilometers and left traces on the coasts of many countries. It finally reached the British coast in 2007, ending the journey. For a time, Little Yellow Duck, as a synonym for bravery, gathered a wave of fans around the world and became a household name “Internet celebrity”.

In 2005, Hong Kong designer Xu Xialin was studying in Europe. He found in the “Duck Fleet” incident that China can only earn a few cents in processing fees in the entire production process of the little yellow duck, while Europe can earn dozens of times. The high price difference, so he came up with an idea: to create an image of a little duck belonging to the Chinese.

In the same year, Xu Xialin’s son Thomas was born. Xu Xialin wanted to design a bathtub toy for his son. Inspired by the “Duck Fleet”, Xu Xialin designed an anthropomorphic cartoon yellow duck with his pointed hairstyle. The prototype of the B.Duck brand.

Xu Xialin created a series of bathroom-themed products. The first bathroom waterproof little yellow duck radio became popular all over the world as soon as it was launched. It was officially named “Bathing Duck”, and the B.Duck brand was established since then.

Since then, B.Duck’s journey as an independent brand has begun, and Xu Xialin has also started his own Chinese brand dream. Xu Xialin first opened the first self-funded toy factory and used B.Duck to carry out the retail business of specialty goods. In 2010, Deying Holdings officially launched the licensing business, and since 2011 has authorized third parties to use the role of B.Duck as consumer goods and promotional purposes.

B.Duck began to become the “pillar” business of Deying Holdings.

From 2012 to 2014, B.Duck’s character licensing business gradually expanded to South Korea, Malaysia, Thailand and other places, and internationalization was beginning to appear; at the same time, Deying Holdings also launched a clothing series during this period, opening clothing in Hong Kong, Beijing, Shanghai, and Shenzhen. shop.

In 2015, Deying Holdings opened its first online flagship store on Tmall, launching its e-commerce business, and has since expanded to other e-commerce platforms such as JD.com, Vipshop and HKTVmall.

Since 2017, Deying Holdings has continuously launched new IPs to enrich its characters, from the original Buffy and B.Duck Baby to the co-branded IP “DONG Duck” launched by actress Zhou Dongyu in 2018. Up to now, Deying Holdings has 26 original characters, and it is expected to launch new characters in 2023, such as Buffy friends: Cream, Mocha, etc.

Source: Deying Holdings prospectus

The target audience of Deying Holdings is between 15 and 34 years old. In order to cater to the younger group, Little Yellow Duck has also created a lot of “out of the circle” content to expand its brand influence.

First, it co-branded with Hey Tea, and launched “B.Duck × Hey Tea” limited-edition co-branded cups, mobile phone cases, co-branded cards and other products on Christmas Day; and then co-branded with the Forbidden City to launch the IP “There is a Little ‘Emperor’ Duck in the Palace”; It is also co-branded with the young people’s favorite game Peace Elite; the latest out of the circle is because Yang Qian, the first post-00s Olympic double gold winner in China, wore a small yellow duck hairpin, which caused the same style to be out of stock.

Little Yellow Duck sits on the town, the second-role intellectual property company in China

B.Duck’s lovable design has captured a large number of fans, and it has also made Deying Holdings a considerable performance.

According to the prospectus, Deying Holdings’ revenue from H1 from 2018 to 2021 was HK$201 million, HK$243 million, HK$234 million and HK$124 million respectively; the net profit for the same period was HK$13.974 million, HK$32.856 million and HK$59.836 million respectively. HKD and HKD 25.606 million.

Previously, Deying had promised in the supplementary and additional agreement signed with investors that the minimum profit in 2021 and 2022 would be HK$75 million and HK$8,500. At present, there is still some distance.

Specifically, Deying Holdings’ revenue is mainly composed of two segments: character licensing business and e-commerce and other businesses. Among them, e-commerce has been supporting the bulk of revenue. During the reporting period, this business achieved operating income of HK$137 million, HK$161 million, HK$135 million and HK$64.801 million respectively, accounting for about 60% of the total.

Data shows that China’s e-commerce market for intellectual property products is expected to reach a scale of HK$65 billion in 2025. Among them, the e-commerce market of intellectual property licensed products, a highly relevant role of Deying Holdings, is expected to reach a scale of HK$31.8 billion in 2025.

Compared with the current situation of Deying, the ceiling is still high and the development space is huge.

However, the role authorization business, which is the second growth curve, is not to be outdone. In recent years, the proportion of the role authorization business of Deying Holdings is increasing year by year.

In Xu Xialin’s view, role authorization is B.Duck’s valuable asset, and the market ceiling is also high.

The prospectus shows that in the character licensing market, from 2021 to 2025, the retail sales of character intellectual property licensed goods in mainland China and Hong Kong are expected to grow rapidly at a compound annual growth rate of about 7.6%. Retail sales will reach approximately HK$59.8 billion.

In the face of this tens of billions market, Deying Holdings is also making continuous efforts. From 2018 to 2020, Deying Holdings’ role licensing business contributed revenue of HKD 63.827 million, HKD 81.630 million and HKD 98.039 million respectively, accounting for 31.8%, 33.6% and 42% of total revenue respectively. In the first half of 2021, the revenue of character licensing business accounted for nearly 50%, which is almost equal to that of e-commerce business.

It is worth mentioning that Deying Holdings ranks second among character intellectual property companies with only one IP of the B.Duck family. Aofei Entertainment, the largest character intellectual property company in China, owns multiple IPs such as “Pleasant Goat and Big Big Wolf”, “Super Flying Man”, and “Balala Little Magic Fairy”.

However, Deying Holdings has not yet created a second IP out of the circle, and the old IP “B.Duck” is still the main revenue pillar. From 2018 to 2020, “B.Duck” achieved revenue of HKD 53.892 million, HKD 61.555 million and HKD 75.035 million respectively, accounting for 84.4%, 75.4% and 76.5% of the revenue from the role licensing business in the same period.

In addition, although Deying Holdings has been licensing overseas IP since 2012, China is still the main battlefield of Deying Holdings. In the first half of 2021, the Chinese market contributed 99.3% of revenue, and the proportion of overseas market revenue decreased year by year.

Strive to be the “Chinese version of Disney”?

The IP business is attracting more and more players. For example, Bubble Mart, which is also listed in Hong Kong, now has a market value of over 60 billion Hong Kong dollars.

The business models of the two are different, and Deying Holdings is more like the upstream of Bubble Mart. Bubble Mart realizes IP through blind boxes, not only has its own IP, but also buys IP to supplement the variety. Deying Holdings mainly provides its own IP authorization for third parties.

However, the two overlap in many businesses, such as e-commerce business, IP authorization and so on. In addition, both seem to want to create a “Chinese version of Disney.”

As early as 2020, Deying Holdings has cooperated with OCT, the first-tier theme park operator in Asia, to build a theme park, and also plans to open a flagship store in Shanghai. Bubble Mart registered and established Bubble Mart Park Management Co., Ltd. in August last year to make adequate preparations for the development of theme parks. Before that, it also reached a cooperation agreement with Beijing Chaoyang Park, planning to build a trendy cultural park.

But for Deying Holdings, the “Chinese version of Disney” still has a long way to go. For domestic IPs, Deying Holdings can be regarded as the “originator” in the role of intellectual property rights. The 17-year-old Little Yellow Duck is already an “old” brand, but it is different from 94-year-old Mickey Mouse, 48-year-old Hello Kitty, and 37-year-old Mickey Mouse. Compared with internationally renowned IPs such as Mario, Little Yellow Duck is still very young.

In addition, unlike Bubble Mart’s star capital, there are few venture capital behind Deying Holdings.

According to the prospectus, before the IPO, founder Xu Xialin held 84.46% of the shares; Wang International held 9.37%; Henderson Land Chairman Li Jiajie held 2.66% through Wisdom Thinker; Vantone held 1.34%.

Before the listing, many shareholders of Deying Holdings withdrew. According to public information, Wang International and Regal Hotels participated in the investment in Deying Holdings in 2017, and Regal Hotels withdrew from their investment in it in 2020. The same exit also includes OJ VC Group, which invested in Deying Holdings in 2013, and the exit time is January 2021.

It is worth noting that Deying Holdings also plans to use about 9.2% of the net proceeds from the fundraising to repay the company’s existing debt to improve the group’s gearing ratio.

https://www.tmtpost.com/5984482.html

作者: wanfeng

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