Sunnysunday, often referred to as an affordable alternative to Pop Mart, has joined the wave of trendy toy companies seeking listings in Hong Kong. Recently, IP toy manufacturer Sunnysunday (Hunan) Group Co., Ltd. submitted its listing application to the Hong Kong Stock Exchange, with Goldman Sachs and CICC acting as joint sponsors.
According to the prospectus, the company reported revenues of RMB 107 million, RMB 245 million, and RMB 386 million for the first three quarters of 2023, 2024, and 2025, respectively, representing year-on-year growth of 129.0% and 134.6%. Net profits for the same periods were RMB -19.921 million, RMB -0.505 million, and RMB 51.959 million. As of September 30, 2025, its adjusted net profit margin stood at approximately 13.7%.
Notably, Sunnysunday’s IP toy products follow a mass-market, low-price strategy, with suggested retail prices typically set at RMB 9.9 or lower. Its core sales channels are offline retailers and distributors, with direct online sales accounting for only about 20% of revenue in the first nine months of 2025.
Domestically themed cultural and creative IPs contributed over half of the company’s revenue. However, inventory made up nearly 60% of its current assets.
The dramatic revenue growth and turnaround to profitability were largely driven by popular IPs such as “Nezha” and “Langlang Mountain Little Monsters.” In 2023 and 2024, Sunnysunday’s main business was not trendy toys but OEM manufacturing of IP toys for overseas clients in the food and beverage industries. Revenue from this segment accounted for 72.0% and 51.4% of total revenue, respectively. In the first three quarters of 2025, revenue from co-developing and manufacturing IP toy products with well-known IPs surged, increasing nearly fourfold compared to the same period in 2024 and accounting for 78.3% of total revenue. Among the 222 million products sold during the reporting period, IP toy products constituted about 26.2% of sales volume, up from 7.7% in the same period of 2024 and 10.5% at the end of 2024. Cumulative growth in IP toy sales volume since the end of 2023 reached approximately 814.1%.
Unlike competitors focusing on top-tier IPs like Ultraman, Disney, and Marvel, Sunnysunday capitalized on the rise of domestic animated films. During the 2025 Spring Festival, “Nezha: The Devil’s Child Stirs the Sea” became a blockbuster, ranking fifth in global box office history. The summer release “Langlang Mountain Little Monsters” grossed over RMB 1.7 billion, becoming the highest-grossing 2D animated film in Chinese cinema history. Sunnysunday secured partnerships with both popular IPs. In the first nine months of 2025, domestically themed cultural and creative IPs generated revenue of RMB 196 million, accounting for 64.9% of IP toy revenue and 50.8% of total revenue. Based on sales volume through September 30, 2025, Sunnysunday is the largest domestic player in the domestically themed cultural and creative IP toy market.
However, it remains uncertain whether the company’s success stems from a temporary market trend or a sustainable business model. Sunnysunday’s performance is heavily tied to non-exclusive licensed IPs, meaning the company cannot operate these IPs independently. Product development cycles may not align with the popularity windows of the IPs. For example, the domestically produced 3D animated film “Chaotic King: The Rise of the Monkey King,” a sequel to “Monkey King: Hero Is Back,” entered development in 2020 with an initial release planned for winter 2022 but has faced repeated delays. After six years, audience tastes may have shifted significantly. The domestic animated series “Yao-Chinese Folktales,” launched in 2023, only successfully spawned one IP, “Langlang Mountain Little Monsters.” Its sequel, released in January 2026, received a lukewarm response upon debut, indicating limited long-term appeal for the IP.
At the same time, competition for IP licensing is intensifying as more companies enter the trendy toy market. Public reports show that Pop Mart secured licensing rights for “Nezha: The Devil’s Child Stirs the Sea” a year and a half before the film’s release. Its “Innate Bond” blind box series surpassed RMB 10 million in sales within eight days, driving a surge in new customer acquisition. Pop Mart’s mid-2025 earnings report disclosed that licensed IP revenue reached RMB 1.525 billion in the first half of the year, up 119.4% year-on-year.
Compared to peers relying on licensed IPs, such as 52TOYS, Buluke, TOP TOY, and Jintian Animation, which reported 80, 50, 43, and 26 licensed IPs respectively, Sunnysunday’s portfolio appears limited. About 70% of 52TOYS’ licensed IP partnerships have lasted over three years, while Jintian Animation’s collaboration with the My Little Pony IP extends up to 42 months. As of the latest practicable date, Sunnysunday had only over 20 licensed IPs in its portfolio. Key licenses, including Pokémon, Honor of Kings, Nezha: The Devil’s Child Stirs the Sea, and Langlang Mountain Little Monsters, have terms of just 12 months. Nearly 60% of the disclosed IP partnerships were established in 2025.
Additionally, Sunnysunday’s licensing costs have risen sharply. In 2023 and 2024, the company’s cost of sales was RMB 88.642 million and RMB 188 million, respectively, with licensing fees accounting for less than 10%. In the first three quarters of 2025, licensing fees surged to RMB 50.768 million, a 405.6% increase from the same period in 2024, representing 20.3% of the cost of sales. Accounts payable for IP licensing fees amounted to approximately RMB 26.844 million, up 124.1% and 75.2% from the ends of 2023 and 2024, respectively.
Despite the ongoing popularity of trendy toys, Sunnysunday’s inventory levels and turnover efficiency are concerning. As of September 30, 2025, the book value of inventory reached RMB 126 million, 1.72 times the value at the end of 2024, accounting for 59.9% of current assets. Work-in-progress and finished goods made up about 77.6% of total inventory, with approximately 65.9% aged under three months. Inventory turnover days exceeded 100 days in the first three quarters of 2023, 2024, and 2025, whereas TOP TOY and Jintian Animation maintained stable turnover periods of 40–50 days.
Prior to the listing application, Hillhouse Capital and Aurora Management Ventures made last-minute investments, boosting the company’s valuation. According to the prospectus, Sunnysunday received its first equity financing in January 2019 from Shenzhen Qianhai Zhihe Honghui Taiye Investment Enterprise, affiliated with Hongwan Fund, at a post-investment valuation of RMB 50 million. In September of the same year, the investor transferred its entire stake at cost to Xiangtan Equity Investment Co., Ltd. Public records indicate that the ultimate investors are state-owned entities under the Xiangtan State-owned Assets Supervision and Administration Commission.
Sunnysunday received no further external funding until September 2025, when Hillhouse Capital’s Chengdu Hillhouse Quanqi Equity Investment Fund Partnership acquired new registered capital for RMB 15.2282 million and purchased approximately 29.0% of Xiangtan Industrial Investment’s stake for RMB 40 million. In mid-October, Hillhouse invested an additional RMB 220 million in new capital, raising the post-investment valuation to RMB 3.4 billion. Two months before the formal application, Aurora Management Ventures invested RMB 48.583 million for 349,500 shares, pushing the valuation to RMB 4 billion. This represents an 80-fold increase in valuation over six years.
Compared to listed peers, Sunnysunday’s price-to-sales ratio of approximately 10.36x is slightly higher than Buluke’s 7.50x, despite generating less than 30% of Buluke’s first-half 2025 revenue. Its price-to-earnings ratio of 77x is about 75.5% of Pop Mart’s, while its net profit for the first three quarters of 2025 was only 1.1% of Pop Mart’s adjusted first-half net profit. These figures suggest Sunnysunday may be overvalued.
It is also noteworthy that Aurora Management Ventures purchased 143,900 shares from Xu Lingyun, Sunnysunday’s Vice President of Sales, for RMB 5.291 million, representing about 18.1% of his holdings. Xu, who joined the company in 2017, oversees domestic and international sales and channel management.