Jintian Animation IPO: Can snacks + toys + IP create a good business?

In the fiercely competitive IP consumer goods sector, the niche category of "food toys" is quietly gaining traction.

"Food toys" simply refers to snack products that come with toys: such as mini figurines, models, cards, stickers, puzzles, keychains, badges, and other merchandise, as well as DIY snacks and miniature models, among others.

In the Chinese market, the food toy industry is experiencing growth alongside the increasing attention on the IP industry.

From 2020 to 2024, the market size of China's IP food toy sector is expected to grow from 5.9 billion yuan to 11.5 billion yuan, with a compound annual growth rate of 19.6%.

As a leading company in this field, Guangdong Jintian Animation Co., Ltd. (Jintian Animation) has submitted a listing application to the Hong Kong Stock Exchange.

In 2024, Jintian Animation's revenue reached 877 million yuan, ranking first in the domestic food toy market with a market share of 7.6%, and achieving a compound annual growth rate of over 20% in the past three years.

The combination of IP and snacks essentially sells emotional value through a low-cost, high-frequency consumption model. The additional "toy" attribute further extends the product's playability and collectability.

This business that integrates IP, snacks, and toys not only consolidates multiple advantages but also overlays the inherent shortcomings of various industries.

IP licensing has dual characteristics: it can bring premium pricing and user stickiness, but it also comes with risks of weak control and homogeneous competition; the snack and toy industries themselves are characterized by fragmented channels and strong dependencies, further increasing reliance on distribution links.

Companies like Jintian Animation, while enjoying the benefits of IP, also face more complex and intertwined systemic challenges.

Breaking the "Ultraman Dependency"

Although Jintian Animation does not prominently display its name, it hides an important player in domestic IP licensing behind the scenes: Shanghai Xinchuanhua Cultural Development Co., Ltd. (Xinchuanhua).

As an agent for several famous anime IPs such as Ultraman, Detective Conan, and Hatsune Miku, Xinchuanhua has played a crucial role in the development of the domestic IP industry chain in recent years.

As early as the establishment of Jintian Animation in 2011, Xinchuanhua's actual controller, Sun Jian, acquired a 20% stake for 1 million yuan and subsequently increased his investment multiple times, holding an 18% stake by early 2025.

During this period, Sun Jian also served as the chairman of the supervisory board of Jintian Animation, and his sister, Sun Li, served as a director of Jintian Animation.

There are ongoing related transactions between Xinchuanhua and Jintian Animation.

A 2020 announcement from Jintian Animation indicated that the company planned to purchase anti-counterfeiting labels, toys, and other products from Xinchuanhua for a total amount of 60.1 million yuan that year, while also selling products to it and paying IP licensing fees.

The close connection with core copyright holders is considered a crucial support for Jintian Animation's rapid growth in the early stages, leveraging the Ultraman IP.

Between 2022 and 2024, Jintian Animation's revenue from Ultraman IP products exceeded 1 billion yuan, with the hit product "Ultraman Egg" achieving cumulative sales of over 70 million units However, just before JinTian Animation officially submitted its Hong Kong stock listing application in May 2025, Sun Jian chose to fully exit.

Currently, founder Cai Jianchun holds 87.8% of the shares and controls 100% of the voting rights through special voting rights arrangements.

As key shareholders exit, the IP revenue structure of JinTian Animation is undergoing changes.

In 2024, the IP revenue from My Little Pony surged nearly fourfold year-on-year, with its revenue share increasing from 5% to 17%, becoming the company's second-largest IP.

Driven by the card game trend that year, this IP entered a rapid growth phase, prompting JinTian Animation to increase resource investment significantly, with the SKU count of My Little Pony products expanding dramatically from 18 at the beginning of 2023 to 170, accounting for over a quarter of the total.

However, during the transformation, a "transition gap" still emerged.

In the first half of 2025, revenue from Ultraman, the largest IP, declined by 17% year-on-year, with its share falling below 50% for the first time; previously, Peppa Pig and Pleasant Goat and Big Big Wolf, which accounted for about 5%, also saw declines of 25.7% and 46.7%, respectively.

During the same period, JinTian Animation's overall revenue growth slowed to less than 10%, and the increase in net profit also narrowed significantly compared to previous years.

For JinTian Animation, the primary goal of implementing a multi-IP strategy is to enhance operational stability.

The popularity of IPs often changes over time; aside from a few evergreen IPs, consumer preferences can easily shift. My Little Pony, which dominated the market in 2024, has significantly cooled off, and the once-popular Nezha has been replaced by new hits like Zootopia.

Secondly, it aims to demonstrate the company's comprehensive strength to copyright holders.

JinTian Animation pointed out that the licensing barriers of top IPs and the rising quality demands from consumers are driving the industry to continuously develop in a high-quality direction. Leading companies with IP and product advantages are expected to further consolidate their market positions.

Currently, JinTian Animation owns 26 licensed IPs, far exceeding the industry average of 4-6.

Snacks Are Not Trendy Toys

Although it operates in the IP business, which is labeled as "highly profitable," JinTian Animation has not captured excessive profits.

In 2024, among snack-listed companies, channel-based companies like Three Squirrels and Bestore have gross margins of about 24%-26%, while the self-manufacturing powerhouse Wei Long even reaches a gross margin of 45%.

In contrast, despite having five self-owned production bases, JinTian Animation's gross margin of 33.7% does not have a significant advantage.

IP cooperation still saves a considerable amount of brand-building costs, and combined with the uniqueness of the products and the inherent appeal of the IP, it may have reduced related investments in channel distribution and marketing to some extent.

By the end of June 2025, JinTian Animation had covered over 1,700 counties nationwide through more than 2,600 distributors, achieving a county-level coverage rate of about 60%, and has completed full coverage of all counties with populations exceeding 300,000 With this channel layout and product characteristics, the company has successfully controlled its sales expense ratio at around 6% and achieved a net profit margin of approximately 15%.

Such earning capability still has a significant gap compared to trendy toys and figurines.

Similarly, "the first stock of building blocks," Blokus, which also relies on external IP and distribution channels, has a gross profit margin close to 50% and a net profit margin of 26% in 2024.

The reason may lie in the obvious price ceiling of snacks themselves. The added value brought by IP and toys is always limited by multiple constraints, including product costs, premium space, and supply chain efficiency.

For companies like Bandai, which have a strong IP reserve and seek diversified monetization, the food and toy business is a good opportunity; however, it is quite different for companies like Jintian Animation, which rely on external licensing and are positioned in the midstream of the industry chain.

Especially during Jintian Animation's promotion of a diversified IP strategy, the related licensing and operational costs continue to rise.

From 2022 to the first half of 2025, the proportion of IP licensing costs in sales costs increased from 4.8% to 6.9%.

In addition, some IP-related investments are not accounted for as expenses but are reflected as an increase in intangible assets.

In 2024, Jintian Animation obtained Sanrio licensing and renewed the Ultraman licensing, with the value of licensed IP in intangible assets significantly increasing from 8.67 million to 32.36 million yuan.

In the first half of 2025, the licensing of Nezha: The Devil's Child and the restoration of Doraemon licensing further increased the value of licensed IP to 53.46 million yuan.

Channel Siege

IP licensing usually does not have exclusivity, and the key to industry competition thus depends on channel capabilities.

In Jintian Animation's revenue composition, the importance of distribution channels has been continuously declining. Against the backdrop of relatively stable revenue scale, its proportion has decreased from 95.2% in 2022 to 66.1% in 2024.

Direct sales channels have rapidly increased their share driven by the fast expansion of bulk snack stores.

Currently, established bulk snack channels are generally entering the single-store model optimization phase, urgently needing high gross profit products that can enhance repurchase rates and create differentiation to improve profitability.

Higher-priced IP food toys that attract younger age groups are an important lever for bulk channels to optimize their product structure.

In May of this year, Jintian Animation conducted a three-day joint live promotion on Douyin with "Snacks Are Busy" and "Zhao Yiming Snacks."

Bulk channels are characterized by light assets and fast turnover, making the possibility of independently developing licensed IP products relatively low.

However, the overall pattern of a dispersed upstream and downstream in the snack industry, along with strong channel power, has not changed. Like many brands, Jintian Animation continues to face pressure from strong channels.

Since 2023, Jintian Animation's first and second largest customers have both become direct sales retailers. By the first half of 2025, the revenue share from the largest customer had reached 23.6% Due to the fact that most direct-selling retailers adopt a "payment after delivery" model, JinTian Animation's trade receivables have continued to grow since 2023, resulting in operating cash flow growth lagging behind net profit performance for an extended period.

In the first half of 2025, JinTian Animation's net cash flow from operating activities experienced negative growth for the first time, decreasing by 34.7% year-on-year.

Perhaps realizing the limitations of the current business model, JinTian Animation has clearly identified the development of its own IP and the exploration of new channels such as e-commerce and overseas markets as strategic priorities in its prospectus.

The company plans to build an IP matrix through both internal and external efforts: internally, it will recruit designers for systematic original development, covering the entire process from concept design to narrative construction, and consider collaborating with or even acquiring external artists and studios;

Externally, it aims to target IPs that are already well-known overseas but still niche in the domestic market to seize market opportunities.

Channel expansion is being elevated to a strategic level, including the establishment of offline IP-themed stores as experience and research touchpoints, and vigorously expanding e-commerce and overseas sales networks.

Overall, new IPs, new categories, and new channels have all been incorporated into the company's development blueprint, but these initiatives are still in their infancy, and whether they can successfully support a second growth curve remains to be seen.

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