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Pop Mart International Group, the largest and fastest-growing pop toy company in China, aims to raise nearly US$590 million from its Hong Kong initial public offering. Photo: EPA-EFE

Chinese toymaker Pop Mart, a Disney, Universal Studios partner, launches US$590 million IPO to fund expansion

  • The Beijing-based company plans to sell 135.7 million new shares to global investors, of which 16.3 million shares will be offered to the general public
  • Pop Mart is China’s largest and fastest-growing ‘pop toy’ company by retail value last year with a market share of 8.5 per cent, according to Frost & Sullivan
Disney

Pop Mart International Group, one of China’s largest trendy toymakers, aims to raise HK$4.57 billion (US$590 million) via a Hong Kong stock market listing to fund its expansion.

The Beijing-based company plans to sell 135.7 million new shares to global investors, of which 16.3 million shares will be offered to the general public, it said on Monday. The indicative price range is HK$31.5 to HK$38.5.

It plans to use the IPO proceeds to improve its distribution channels, expand overseas, fund potential investments, boost its intellectual property (IP) inventory and digitalise its operations.

Pop Mart is China’s largest and fastest-growing “pop toy” company by retail value last year with a market share of 8.5 per cent, according to Frost & Sullivan, which was hired by the company to prepare data for its listing prospectus.

A booth of Chinese toymaker Pop Mart inside a shopping mall in Beijing. Photo: Reuters

Sales of pop toys – infused with pop culture and trendy content – amounted to 20.7 billion yuan in China last year, with the top five players commanding market shares of 1.6 to 8.5 per cent, according to the research firm.

The company had a total 93 IP at the end of June, comprising 12 proprietary, 25 exclusively licensed and 56 non-exclusively licensed ones.

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“We have attracted and maintained a pool of high-quality intellectual property resources in the pop toy industry by working with our artists, established IP providers and our in-house design team,” it said.

Its non-exclusive licensed IP providers include Walt Disney and Universal Studios.

The company also sells products from third-party suppliers, such as action figures, puzzles, plush toys, electronics and accessories, through its retail stores and its online flagship online store at Tmall.com.

Net profit grew 24 per cent year on year to 141.3 million yuan in the year’s first half, as revenue grew 50 per cent to 817.8 million yuan. It booked sales of 1.68 billion yuan last year, more than triple the 514 million in 2018.

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Its largest customer is Nanjing Golden Eagle Pop Mart which accounted for 3 per cent of sales in the first half.

In August, Nanjing Golden launched a lawsuit against Pop Mart, alleging a breach of a cooperation agreement by establishing 19 retail stores and 191 toys vending machines by itself, rather than through Nanjing Golden.

Nanjing Golden is demanding 117.2 million yuan from Pop Mart, which it says is the gross profit made by Pop Mart last year.

Pop Mart said that according to its Chinese legal adviser the claim is “groundless”, the likelihood of Nanjing Golden winning is “very low” and the risk exposure of Pop Mart is “minimal” and that it plans to “vehemently” defend itself.

This article appeared in the South China Morning Post print edition as: Toymaker eyes HK$4.6b from share offering
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