Talking about stocks: Weakness of independent IP development is the biggest shortcoming of Bubble Mart

Weak independent IP development is the biggest shortcoming of Bubble Mart

　　Talk about stocks

　　Revenue and profits are overly dependent on exclusive IP and non-exclusive IP.

　　On the evening of June 1, the trend toy company Bubble Matt submitted a prospectus to the Hong Kong Stock Exchange. Last year, he made 451 million yuan, took eight rounds of financing, landed on the New Third Board and delisted. Bubble Matt seems to be "not bad money". This time it hit Hong Kong stocks, Bubble Mart said it would force IP research and development.

　　Bubble Mart's counterattack is almost the epitome of the "blind box economy" in recent years. From 2014 to the first half of 2016, Bubble Mart continued to lose money. In 2015, Bubble Mart introduced a blind box story, and revenue and profits increased rapidly. However, despite the fact that Wang Mart, the founder of Bubble Mart, said, “We don’t think that Bubble’s achievement today is just because of the carrier of the blind box. Bubble Mart’s rapid growth, the core element is still the IP itself.” But the data shows that Among the 85 existing IPs of Bubble Mart, its own IP includes Molly, Dimoo, BOBO&COCO, Yuki, etc. The sales of the last three IPs only account for 5.9%, 1.5%, 1.4% of the total revenue, which means that Bubble Matt's revenue and profits are mainly from exclusive authorized IP and non-exclusive authorized IP, rather than independent research and development IP.

　　The consequence is that Bubble Mart’s ability to independently develop IP is still weak, subject to the timeliness of exclusive and non-exclusive IP cooperation agreements. Once the more popular exclusive or non-exclusive IP licensing agreement expires, it will be unable to continue to obtain authorization risks of. This is actually the same logic as the game and other fields. Operators who only rely on proxying game IP will lose the original users and the market once the agency rights are withdrawn, and will continue to be suppressed by other competitors who have obtained the agency rights, which may eventually cause The big decline in performance.

　　The lack of independent IP development capabilities is the core factor restricting the development of Bubble Mart. After all, in the field of trendy play such as blind boxes, the reason why consumers are willing to spend a high price to buy blind boxes lies in the spiritual added value that IP brings to consumers. For Bubble Mart, which is the standard Disney, I am most envious of Disney's continuous IP production and market operation capabilities. Unfortunately, although Bubble Mart proposed to increase independent IP development, it was once caught in a "plagiarism". This not only exposed the serious loopholes in its independent IP management system, it may even appear similar after the listing. Negative events will lose the trust of investors due to the loss of market integrity and even be targeted by short-selling institutions. After all, the more mature capital markets value the credibility of listed companies, the lessons of Ruixing Coffee are not profound.

　　In addition, the blind box economy currently belongs to a niche industry in China, and the user stickiness is much weaker than that of the mass industry such as games. The blind box economy labeled as "tide play" must also face the characteristics of high frequency of change of young consumers' preferences. Bubble Mart develops its own IP, with a large investment and long cycle time. There may also be risks that it will not be welcomed by users after launch and cannot achieve the expected performance. For Bubble Mart's independent development of IP, no matter the level of funds, talents, product manufacturing, etc. will be under greater pressure.

　　At the same time, Bubble Mart’s marketing channels are focused on offline, which also brings greater rigid expenses such as rent and manpower, while online channels rely on including Tmall flagship stores, bubble pumping machines, Weiqu and other mainstream e-commerce platforms in China, then, Bubble Mart will have to pay various fees to e-commerce channels, squeezing profit margins.

　　In the risk disclosure of the prospectus, Bubble Mart pointed out that the current popularity of IPMOLLY, which brings the greatest benefits, cannot be guaranteed by the market. In addition, the company may not be able to effectively manage the growth of retail stores and robot outlets, nor can it guarantee accurate prediction consumer preference. This is probably the weakness of Bubble Mart's development.

　　□Yuanshan (financial commentator)