TOP TOY, the trendy toy collection brand under Miniso Group Holding Ltd., has submitted a second application for a Hong Kong initial public offering. The joint sponsors are J.P. Morgan and UBS, with CITIC Securities acting as the overall coordinator.
This marks TOP TOY's renewed attempt to list in Hong Kong, following the expiration of the six-month validity period of its first application submitted in late September 2025. A successful listing would make it the third listed entity under founder Ye Guofu's portfolio, alongside Miniso and Yonghui Superstores.
Established in 2020, TOP TOY has rapidly expanded in recent years by leveraging Miniso's supply chain and distribution channels. According to a Frost & Sullivan report, the company achieved a compound annual growth rate in GMV exceeding 50% between 2023 and 2025, making it the fastest-growing trendy toy collection brand in China.
However, despite rapid revenue expansion, TOP TOY's net profit attributable to parent company shareholders plummeted by nearly 70% in 2025, raising concerns about the quality of its growth.
Within the trendy toy industry, the scarcity and premium value of intellectual property are core competitive advantages, shaping the strategic paths of different players. While Pop Mart's limited-edition blind boxes were once resold for over ten thousand yuan, earning them the nickname "electronic Moutai" among young consumers due to their closed-loop system from artist collaboration to IP incubation and commercialization, TOP TOY has adopted a distinctly different approach.
Founder Sun Yuanwen previously described the contrast: "Pop Mart is like a closed iOS system where everything is proprietary. We are more like Android, building a platform that accommodates products and IP from others." The prospectus reveals that TOP TOY has developed a multi-layered and expanding IP matrix driven by a combination of proprietary, licensed, and third-party IPs.
As of the latest practicable date, TOP TOY owned 24 proprietary IPs, including Juanjuanyang, Nuomier, Dali Zhaocai, Ninimo, and Xiaoyu. It also held 42 licensed IPs, primarily including Sanrio, Disney, GG Bond, Crayon Shin-chan, Winnie the Pooh, Neon Genesis Evangelion, Little Parrot, and Chiikawa. Compared to 2022, the company added only two new licensed IPs, indicating a slowdown in external IP acquisition.
Financial data shows that TOP TOY's revenue remains heavily reliant on third-party IPs. Although revenue from proprietary IPs is growing rapidly, its contribution remains low. Between 2023 and 2025, the company's total revenue from trendy toy sales grew from RMB 1.412 billion to RMB 3.488 billion, a compound annual growth rate of 57.17%. Revenue from proprietary IPs surged from RMB 8.486 million to RMB 199 million, a remarkable CAGR of 384.26%, yet it accounted for only 5.7% of total revenue in 2025.
In 2025, revenue from licensed IPs reached RMB 1.778 billion, nearly doubling year-over-year, and increased its share of total revenue from 48.8% to 51.0%. Revenue from third-party IPs also grew by 62.84% to RMB 1.511 billion, though its share decreased from 40.9% to 43.3%. Combined, licensed and third-party IPs contributed 94.3% of total revenue, highlighting the company's high dependence on external IP.
From a gross margin perspective, licensed IP margins were 41.6%, 44.2%, and 40.1% from 2023 to 2025, while third-party IP margins fluctuated around 17-20%, acting as a drag on profitability. Proprietary IP margins improved steadily from 34.0% in 2023 to 45.1% in 2025, but due to their small revenue share, the impact on overall margins was limited. Consequently, the company's overall gross margins remained relatively stable at 30.5%, 32.1%, and 31.3% during the period.
In contrast, industry benchmark Pop Mart demonstrates significantly stronger profitability. With self-developed products as its main offering, Pop Mart's revenue from self-developed products surged 189.2% year-over-year to RMB 36.788 billion in 2025, accounting for 99.1% of total revenue. Its overall gross margin increased substantially from 66.8% to 72.1% during the period.
Therefore, both in terms of revenue composition and profitability, TOP TOY, which emphasizes a "trendy toy collection" model, lags considerably behind Pop Mart, which focuses on proprietary IP development.
Contrasting with its high revenue growth and stable gross margins, TOP TOY recorded a total net profit of RMB 101 million in 2025, a sharp decrease of 65.6% year-over-year. Net profit attributable to parent company shareholders was RMB 93 million, down 68.8%. The company's overall net profit margin was 14.5%, 15.4%, and 2.8% for 2023, 2024, and 2025, respectively.
The significant fluctuation in net profit was primarily due to a share-based payment expense of RMB 227 million related to equity-settled share awards and a RMB 158 million change in the carrying value of redemption liabilities arising from preferred shares in 2025. These are non-cash accounting adjustment items that temporarily inflate expenses and suppress reported profits. After adjustment, the company's net profit was approximately RMB 522 million, representing a year-over-year increase of 77.49%.
Further analysis reveals that in July 2025, TOP TOY's board approved a share incentive plan involving up to 120 million shares, leading to a sharp increase in equity-settled share-based payment expenses. Consequently, the total remuneration for directors surged from RMB 1.6 million in 2023 to RMB 137 million in 2025, an increase of over 84 times.
Founder Sun Yuanwen and Executive Director and CFO Yan Xiaojiao were the primary beneficiaries of this equity incentive. In 2025, Sun Yuanwen received share-based payments of RMB 110 million, bringing his total compensation to RMB 112 million, a 93-fold increase year-over-year. Yan Xiaojiao, who has a senior financial background from KPMG and Miniso, received share-based payments of RMB 23.649 million, raising her total compensation to RMB 24.968 million, a nearly 34-fold increase.
The redemption liability from preferred shares originated from an agreement signed in July 2025 between TOP TOY and four Series A investors, including Temasek, involving the issuance of USD 59.426 million in preferred shares. Based on the financing valuation at that time, the company's post-money valuation was approximately USD 1.3 billion, equivalent to HKD 10.2 billion.
While this capital infusion provides support, stringent IPO-related clauses also impose constraints. The Series A financing agreement stipulates that TOP TOY must complete a qualified IPO by July 2028; otherwise, mandatory redemption of the preferred shares will be triggered. The prospectus indicates the redemption liability for these preferred shares amounts to RMB 574 million.
For TOP TOY, even if it successfully passes the Hong Kong exchange's hearing, its post-listing valuation remains uncertain. The overall valuation correction in the trendy toy sector, combined with the limitations of its business model, subjects the company to significant valuation pressure.
Comparing with the listed industry benchmark, Pop Mart's share price rose rapidly from a low of HKD 79.2 on January 16, 2025, to HKD 339.8 on August 26, 2025, but has since declined. As of April 24, 2026, its closing price was HKD 156.9, corresponding to a static P/E ratio of only 14.80 times. Despite delivering strong performance in 2025, it could not counter the overall sector-wide valuation decline.
In contrast, TOP TOY's Series A post-money valuation of HKD 10.2 billion implies a static P/E ratio of approximately 20 times based on its adjusted 2025 net profit, significantly higher than Pop Mart's current valuation, indicating a clear valuation mismatch. More critically, the two companies operate under different valuation frameworks, which could exacerbate concerns about TOP TOY's valuation.
Market analysis suggests that Pop Mart's valuation logic is based on being an "IP consumer brand," commanding a premium from capital markets due to its high proportion of proprietary IP, strong user loyalty, and high gross margins. In contrast, with approximately 94.3% of its 2025 revenue dependent on licensed and third-party IPs, TOP TOY essentially earns "channel revenue" rather than "IP revenue." This aligns its valuation logic more closely with retail companies, potentially making it difficult to achieve a valuation level comparable to Pop Mart.
Long-term, for TOP TOY to resolve the valuation mismatch dilemma, the key lies in demonstrating to the capital markets its ability to increase the proportion and profitability of its proprietary IPs. A successful transition to a dual-driver model combining IP and channel strengths is essential for potential valuation recovery.
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