TOP TOY's rush toward a Hong Kong IPO: an 87.9% surge in revenue amid a sharp 65.6% decline in net profit, highlighting the lurking danger of reef-like risks.

The Business Foundation of a Trendy Toy Giant: An Integrated, Full-Industry-Chain Platform

TOP TOY positions itself as the largest and fastest-growing trendy toy (潮玩) collectible brand in China. In 2025, it achieved GMV of RMB 4.2 billion, with revenue from self-developed products accounting for over 55%. Its business model is built around maximizing IP value and constructing an integrated, full-industry-chain platform, covering IP incubation, product R&D and design, supply chain management, and sales across all channels. The company has a multi-tier IP matrix driven by its own IP, licensed IP, and collaboration with other brands’ IP. As of the last practicable date, it had 66 self-owned and licensed IP titles and over 660 IP titles from other brands. Its product lineup covers multiple categories, including collectible figures, 3D assembly models, and blind box vinyl and plush toys made of rubberized materials, among others.

In terms of its sales network, the company has formed an all-channel layout comprising offline company-owned stores, TOP TOY partner stores, distributors, and online platforms. As of December 31, 2025, it operated 334 stores in total, including 50 company-owned stores, 273 partner stores, and 11 agency stores. Its membership system has accumulated over 12 million registered members.

Revenue Soars by 87.9%: Dual Drivers Behind Rapid Expansion

The company’s revenue shows explosive growth, rising from RMB 1.461 billion in 2023 to RMB 3.587 billion in 2025, with a compound annual growth rate (CAGR) of 56.7%. In particular, the year-over-year growth in 2025 reached as high as 87.9%. This growth mainly comes from three areas: optimization of product mix, expansion of the sales network, and breakthroughs in overseas markets.

It is worth noting that the rapid growth in revenue mainly depends on offline distributor channels (58.6% in 2025) and retail at company-owned stores (12.7%). However, the revenue share from Miniso Group fell from 53.5% in 2023 to 46.6% in 2025, yet Miniso remains the largest customer. The risk of customer concentration is significant.

Net Profit Plunges by 65.6%: Profit Erosion Behind Expansion

In sharp contrast to the high-speed growth in revenue is the dramatic fluctuation in profit performance. The company’s net profit fell sharply from RMB 294 million in 2024 to RMB 101 million in 2025, a decline of 65.6%. This was mainly dragged down by factors including a surge in expense items, an increase in non-cash expenditures, and a heavier tax burden.

The big drop in profit is mainly attributable to a loss of RMB 158 million caused by changes in the book value of preferred share redemption liabilities, as well as an increase in equity-settled share-based payment expenses. After adjustment, net profit still reaches RMB 522 million, but the reference value of non-IFRS (International Financial Reporting Standards) indicators should be assessed with caution.

Gross Margin Edges Down Slightly: Tough Tests for Cost Control

The company’s overall gross margin remains relatively stable, increasing slightly from 31.4% in 2023 to 32.7% in 2024, before dipping modestly to 32.1% in 2025. Self-developed products contribute most of the profit, with a gross margin of 40.6%, while products purchased from external suppliers have a gross margin of only 19.2%, significantly dragging down overall profitability.

Net Margin Fluctuates Sharply: Doubts About Profit Quality

Net margin rose from 14.5% in 2023 to 15.4% in 2024, but then plunged to 2.8% in 2025, reflecting that the company’s profitability is highly unstable and that the quality of earnings is in question. This sharp fluctuation is mainly driven by non-operating factors, including losses from changes in preferred share redemption liability and an increase in share-based payment expenses. The profitability of the core business still needs further observation.

A Deep Dive into Revenue Composition: Dual Changes in Channels and Products

By product source

The revenue share of self-developed products fell from 53.6% in 2023 to 49.1% in 2024, then rebounded to 56.7% in 2025, with revenue of RMB 1.977 billion. Revenue from externally purchased products has continued to grow over the three years, but its gross margin has remained below 20% for the long term.

By product category

Vinyl/plush collectibles (搪胶毛绒) became the fastest-growing category. Revenue surged from RMB 1.14 million in 2023 to RMB 1.102 billion in 2025. Over three years, the CAGR exceeded 1,000%. However, the revenue share of collectible figures fell from 72% to 51.1%, and the drastic change in product mix adds operational uncertainty.

By sales channel

Offline distributors contribute over 50% of revenue, reaching RMB 2.044 billion in 2025, while the online channel share is only 7.9%, indicating over-reliance on the traditional distribution model.

High Customer Concentration: The Top Five Customers Contribute 59.5% of Revenue

In 2025, the revenue from the top five customers was RMB 2.131 billion, accounting for 59.5% of total revenue. Among them, the largest customer, Miniso Group, contributed 46.6% of revenue. This customer concentration is far higher than the industry’s safety level (commonly considered to be below 30%), indicating a serious dependency risk. In trade receivables, 87% came from the top five debtors. Loosening credit policies increased the days sales outstanding for trade receivables from 25.8 days in 2023 to 36.4 days in 2024. In 2025 it fell back to 26.9 days, but the absolute amount of accounts receivable was still RMB 305 million.

Reasonable Supplier Concentration: Supply-Chain Risk Is Relatively Controllable

In 2025, purchases from the top five suppliers totaled RMB 617 million, accounting for 20.2% of total purchases. The largest supplier accounted for 7.0% of purchases. Supplier concentration is at a reasonable level. However, it should be noted that in 2025, the largest supplier also served as the company’s customer, introducing the possibility of dual transactions that could lead to conflicts of interest. The turnover days of trade payables increased from 34.4 days in 2023 to 48.9 days in 2024, reflecting stronger bargaining power with suppliers.

Dependence on Related-Party Transactions: Miniso Contributes 46.6% of Revenue

From 2023 to 2025, revenue from Miniso Group was RMB 781 million, RMB 923 million, and RMB 1.671 billion respectively, each accounting for more than 45% of total revenue. The company signed a product supply framework agreement with Miniso Group. The transaction caps for 2026-2028 are RMB 2.605 billion, RMB 3.218 billion, and RMB 3.955 billion respectively. Related-party transaction amounts have continued to grow, raising questions about the company’s independent operating ability. As of December 31, 2025, borrowings from entities under common control of the controlling shareholder totaled RMB 310 million.

Financial Challenges Emerge: Net Current Liabilities of RMB 279 Million

By the end of 2025, the company had current assets of RMB 1.337 billion and current liabilities of RMB 1.616 billion, resulting in net current liabilities of RMB 279 million. The net liabilities amount to RMB 2.91 million, indicating a mild state of being unable to cover assets with liabilities. Although cash flow from operating activities increased from RMB 257 million in 2023 to RMB 475 million in 2025, accounts receivable increased from RMB 229 million to RMB 484 million, inventories rose from RMB 128 million to RMB 461 million, and working-capital pressure continued to intensify. Inventory turnover days increased from 38.1 days in 2023 to 51.6 days in 2025. Inventories with a storage age of more than one year totaled RMB 174 million, and inventory impairment was RMB 32 million.

Peer Comparison: Leading Market Share, But a Wide Profitability Gap

Based on 2025 GMV, TOP TOY ranks first among China’s trendy toy collection retailers with a 4.8% market share, but the gap is clear versus industry leader Company A (21.8% market share). The company’s gross margin of 32.1% is below the industry average, and its net margin volatility is far greater than that of peers, indicating insufficient earnings stability. Overseas revenue surged from RMB 11.8 million in 2024 by 2,407% to RMB 296 million, but the profitability model for new stores has not yet been tested through a full cycle.

Concentrated Equity Structure: Miniso Is an Absolute Controlling Shareholder

As of the last practicable date, Miniso holds 86.9% of the company’s issued share capital. Mr. Ye Guofu indirectly controls 63.7% of the company’s equity through Miniso, making him the de facto controller. The company’s equity structure is highly concentrated, and there are concerns about insufficient protection of minority shareholders’ rights.

Core Management Team: Compensation Incentives and Business Experience

• Sun Yuanwen (CEO): 34 years old. Former Operations Director at Miniso. Led the founding of the TOP TOY brand. Compensation for 2025 was not disclosed, but he holds 3.9% of shares through SunYW holding Limited.
• Yan Xiaojiao (CFO): 40 years old. Former audit manager at KPMG. Former Deputy CFO at Miniso. Holds 0.8% of the company’s shares.
• Ye Guofu (Chairman of the Board): 48 years old. Founder of Miniso. Not involved in daily management but has authority over strategic decisions.

Total directors’ and executives’ compensation in 2025 reached RMB 137 million, mainly from equity-settled share-based payments. Of this, Sun Yuanwen’s total compensation was RMB 112 million (including RMB 109.9 million from share-based payments), and Yan Xiaojiao’s compensation was RMB 24.968 million (including RMB 23.649 million from share-based payments). Excessive short-term incentives may lead management to adopt short-sighted behaviors.

Summary of Risk Factors: Six Core Challenges

2. Performance Volatility Risk: In 2025, net profit dropped sharply by 65.6%, reflecting insufficient expense control during the expansion period. Sales and distribution expenses increased by 169.2% to RMB 544 million, while general and administrative expenses surged by 461% to RMB 153 million.

3. Customer Concentration Risk: A single customer contributes nearly half of revenue, creating risk of order fluctuations. Revenue share of the top five customers is 59.5%, far exceeding the industry’s safety level.

4. IP Operations Risk: Licensed IP still accounts for 43.3%, presenting the risk that licenses may expire and cannot be renewed. The incubation cycle for self-owned IP is long and requires heavy investment, and market acceptance remains uncertain.

5. Overseas Expansion Risk: Overseas stores increased from 4 to 39, increasing management challenges. The profitability model for new stores has not yet been validated. In 2025, overseas revenue reached RMB 296 million, but upfront investment was large, making it difficult to contribute profits in the short term.

6. Inventory Management Risk: Inventory turnover days extended to 51.6 days. Inventories aged over one year reached RMB 174 million. Trendy toy product life cycles are short, creating risk of inventory impairment.

7. Liquidity Risk: Net current liabilities have been recorded for three consecutive years. By end-2025 they reached RMB 279 million. The current ratio is 82.8%, indicating significant short-term debt repayment pressure.

Conclusion: Cool Reflection Under Fast Growth

As a leading enterprise in the trendy toy industry, TOP TOY demonstrates strong revenue growth momentum. Its 87.9% growth rate and 56.7% share from self-developed products suggest that its business model has some degree of sustainability. However, investors should be alert to three core contradictions: the divergence between revenue growth and profit decline, the risk of rapid expansion paired with uncontrolled expenses, and the balance between IP self-development and excessively high customer concentration. It is recommended to closely monitor its ability to convert profitability in overseas stores, the effectiveness of expense control, and progress in optimizing its customer structure, and to evaluate the reasonableness of its valuation prudently.

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责任编辑：Xiaolang Express News