Sunny & Sandy (Hunan) Group Co., Ltd. has submitted its listing application to the Hong Kong Stock Exchange. The company, often dubbed the "budget version of Pop Mart," focuses on the affordable trendy toy market. Unlike Pop Mart, which is pushing product prices higher, Sunny & Sandy has captured market share with toys priced as low as 9.9 yuan.

The company's performance surged in 2025, driven by successfully licensing popular animated films "Nezha 2: The Devil Comes Again" and "Langlang Mountain." Sunny & Sandy launched products tied to "Nezha 2" on the film's global premiere day, becoming the first company in the industry to release officially licensed figurines for this IP. Shipments to major national sales channels were completed within three days, capitalizing on the strong consumer demand generated by the film's release. Additionally, the company secured the IP license for "Langlang Mountain," which was released in August 2025, developing a series of related toys. By the end of September 2025, sales of these products had exceeded two million units.

Sunny & Sandy's core business is divided into two segments: IP Toy Products and IP Toy Solutions. The IP Toy Products business involves developing and manufacturing toys in collaboration with well-known IPs such as Harry Potter, Sanrio, SpongeBob SquarePants, and Pokémon. Products mainly include figurines, stamps, and refrigerator magnets. The IP Toy Solutions business provides customized toy designs and manufacturing for corporate clients, such as food and beverage companies, often facilitating their collaborations with popular IPs or developing solutions based on the clients' own IPs.

Historically, the IP Toy Solutions segment was the primary revenue source. In 2023 and 2024, it generated revenues of 77 million yuan and 126 million yuan, accounting for 72% and 51.4% of total revenue, respectively. However, this dynamic shifted significantly in the first nine months of 2025. Revenue from the IP Toy Products segment skyrocketed to 303 million yuan, comprising 78.3% of total revenue, while the IP Toy Solutions segment contributed 84 million yuan, representing only 21.7% of the total.

For the periods of 2023, 2024, and the first nine months of 2025, Sunny & Sandy reported revenues of 107 million yuan, 245 million yuan, and 386 million yuan, respectively. The company recorded losses of 19.921 million yuan and 505,000 yuan in 2023 and 2024. However, it turned a profit in the first nine months of 2025, achieving a net profit of 51.959 million yuan.

A key characteristic of Sunny & Sandy's business model is its lack of self-owned IP. The company collaborates with over 20 IP partners across various categories, including cultural trends, sports events, animation, and video games. However, the IP licensing agreements are typically short-term, lasting one to two years. Some agreements do not automatically renew upon expiration, and many collaborations are non-exclusive. As of the application date, the company holds licenses for "Nezha 2," "Langlang Mountain," the 2026 FIFA World Cup, and "Honor of Kings." Except for the World Cup license, which lasts 13-16 months, the other three licenses are valid for only 12 months, creating pressure as key IP agreements approach expiration.

The cost of acquiring these IP licenses has been rising significantly. Royalty fees were 6.481 million yuan, 17.589 million yuan, and 50.768 million yuan in 2023, 2024, and the first nine months of 2025, accounting for 7.3%, 9.4%, and 20.3% of total sales costs, respectively.

Sunny & Sandy positions itself in the affordable toy segment. Its products are generally priced between 3.9 yuan and 19.9 yuan per piece, with most items costing 9.9 yuan or less. According to Frost & Sullivan, the company is a leading player in China's affordable 3D IP toy market, ranking first in sales volume for toys priced at 20 yuan and below in 2024. It was also the largest player in the cultural trend IP toy segment by sales volume in the first nine months of 2025.

Despite its market position, the company has faced consumer complaints on platforms like Hei Mao Complaints and Xiaohongshu regarding product quality issues, such as rough edges, color inconsistencies, and poor after-sales service. Some customers have reported receiving duplicate items in blind boxes.

Sunny & Sandy describes itself as a technology-driven enterprise, with a product R&D team of 98 employees as of September 2025. However, its R&D expenditures were relatively low: 5.88 million yuan, 8.396 million yuan, and 8.467 million yuan for 2023, 2024, and the first nine months of 2025, representing R&D-to-revenue ratios of 5.5%, 3.4%, and 2.2%, respectively. In contrast, sales and distribution expenses were significantly higher, amounting to 12.22 million yuan, 20.766 million yuan, and 36.824 million yuan for the same periods, with ratios of 11.5%, 8.5%, and 9.5%.

The company was founded by Yang Jie, born in 1985. After gaining experience in foreign trade, Yang started his own business in 2010. Initially focusing on Christmas decorations, he later shifted to IP toys after securing an order from a Russian buyer. In 2015, he established Sunny & Sandy in Xiangtan, Hunan. The company's name combines his English name, Sunny, and his daughter's name, Sandy. Growing up in a rural area with limited access to affordable, licensed toys, Yang aimed to create a company that provides quality IP toys to consumers across different income levels.

Initially focused on import-export trade from 2015 to 2019, the company saw its annual trade volume grow 14-fold to $30 million. It secured long-term cooperation contracts with multinational corporations like Disney, Universal Studios, Nestlé, and Paul Frank. After a significant drop in foreign orders post-2020, Yang pivoted to the domestic market in 2021, focusing on cultural and creative themed products, leading to the 2025 breakout success with "Nezha 2."

Yang Jie currently serves as Chairman, Executive Director, and CEO, holding 50.99% of the company's equity and controlling 66.29% of the voting rights.

Sunny & Sandy has attracted investment from notable institutions. In January 2019, state-owned capital from Xiangtan invested 10 million yuan for a 20% stake. In September 2025, Hillhouse Capital's affiliate, Gaoling Quanqi, invested approximately 55.2284 million yuan to acquire a stake. One month later, it invested an additional 220 million yuan. In December 2025, private equity firm Aurora Management invested 48.583 million yuan, valuing the company at 4 billion yuan.

Currently, Hillhouse Quanqi holds a 10.57% stake, making it the largest external shareholder. Xiangtan Agricultural Development holds 9.14%, and Aurora Management holds 1.69%.

Unlike Pop Mart's high-end strategy, Sunny & Sandy has carved out a niche in the affordable IP toy market and now stands at the doorstep of a Hong Kong listing.