TOP TOY, valued at over 10 billion Hong Kong dollars, makes another IPO attempt Ye Guofu aims for his third listed company

Why did TOP TOY’s revenue surge but its net profit drop sharply?

Science and Technology Innovation Board Daily April 1 News (Reporter Xu Chihao), TOP TOY is making another IPO attempt.

According to disclosures on the Hong Kong Exchanges and Clearing Limited official website, trendy toy brand TOP TOY International Group Limited (hereinafter referred to as TOP TOY) has submitted a listing application. This is the company’s second attempt after its first submission lapsed on September 26, 2025.

If TOP TOY’s listing is successful, Ye Guofu will control the third listed company after Miniso and Yonghui Superstores.

TOP TOY was founded in December 2020. It is the core brand incubated by Miniso to enter the trend-toy sector. From the time it was born, it rapidly expanded by leveraging the advantages of its parent company’s supply chain, channels, and capital. By the end of 2025, the company had 334 TOP TOY stores.

The prospectus discloses that the company completed its first round—and also its only round—of financing in July 2025, raising US$59.4 million (about HK$462 million). The investor lineup was impressive, including Temasek, Raffles Capital, Chuangxiang Investment, and others. The post-investment valuation was US$1.3 billion (about HK$10.2 billion).

In terms of shareholding structure, Miniso Group holds 86.9% of the company’s shares, making it the controlling shareholder. The company’s CEO Sun Yuanwen holds 3.9%; CFO Yan Xiaojiao holds 0.8%; the management holding platform TOP TOY MANAGEMENT holds 3.7%; Temasek holds a total of 4.0% through its affiliated entities, making it the largest external institutional shareholder; Raffles Capital holds 0.6%; and founder Xie Guohua of Lingdong Chuangxiang holds 0.2%.

Financial data shows that in recent years TOP TOY’s revenue has grown explosively, but its profitability has fluctuated sharply, showing a “higher revenue but not higher profit” trend. From 2023 to 2025, the company’s revenue was RMB 1.461 billion, RMB 1.909 billion, and RMB 3.587 billion, respectively. In 2025, the year-on-year growth rate was as high as 87.9%, and the compound annual growth rate over the three years exceeded 50%.

However, net profit performed in the exact opposite direction. In the same period, net profit was RMB 210 million, RMB 290 million, and RMB 100 million, respectively. In 2025, year-on-year net profit fell sharply by 65.6%, and the net profit margin plunged from 15.4% in 2024 to 2.8%.

For the cliff-like decline in net profit, TOP TOY explained in its prospectus that it was mainly due to large non-cash expenditures of about RMB 390 million, including fair value losses on preferred shares and equity incentives, together with a surge in expenses related to rapid store expansion, marketing, and the IPO.

It is also worth noting that TOP TOY’s customer concentration risk is prominent. For the fiscal years ended December 31, 2023, 2024, and 2025, revenue from the top five customers accounted for 76.5%, 66.2%, and 59.5% of the company’s total revenue for the respective periods.

Among them, the revenue contribution of the largest customer, Miniso Group, accounted for 53.5%, 48.3%, and 45.5%, respectively. Although customer concentration has shown a year-by-year downward trend, it still remains at a relatively high level.

From an industry market-share perspective, based on 2025 retail sales, TOP TOY ranked as the second-largest trend-toy retailer in China with a 4.8% market share. However, compared with industry leader Pop Mart, there is a magnitude-level gap in terms of scale, growth rate, and profitability.

In 2025, Pop Mart’s revenue reached RMB 37.12 billion, up 184.7% year on year. Its revenue scale is more than 10 times that of TOP TOY, and its growth rate is far higher than the latter. More importantly, the fundamental differences in the two companies’ business models result in different levels of profitability.

Pop Mart is a typical “IP brand company.” Its core competitiveness lies in independently incubating and operating blockbuster proprietary IP such as Molly, Dimoo, and Labubu. In 2025, proprietary IP revenue accounted for over 99%. By relying on exclusive ownership of IP rights, it avoids high licensing fees, and its gross margin has continued to rise. From 2023 to 2025, the figures were 61.3%, 66.8%, and 72.1%, respectively.

By contrast, TOP TOY is more like a “trend-toy superstore,” taking the “IP collection store” route. Its revenue relies heavily on externally licensed IP such as Marvel, Sanrio, and Naruto. In 2025, the revenue share from proprietary IP, licensed IP, and IP from other brands was 5.7%, 51%, and 43.3%, respectively. Since it must pay large licensing fees to copyright holders, the gross profit space is directly compressed. In the same period, its gross margin was only 31.4%, 32.7%, and 32.1%, which is less than half of Pop Mart’s.

Regarding the current situation of dependence on external IP, Ye Guofu has said that the company will “walk on two legs” with both international IP and proprietary IP to achieve dual-IP parallel-driven development.

According to the prospectus, as of March 2026, the company has 24 proprietary IPs and 42 licensed IPs, relying on more than 660 IPs from other brands.

(Science and Technology Innovation Board Daily reporter Xu Chihao)