Topic: IPO of Brooke Hong Kong Stock: How does Altman IP support the valuation of 7.2 billion yuan when it is about to expire
Culture | Three Culture and Entertainment
Yesterday (May 17), Bruco Group submitted its prospectus and planned to list in Hong Kong.
From 2021 to 2023, Bruco's revenue is 330 million, 326 million and 877 million yuan respectively, its gross profit is 123 million, 123 million and 415 million yuan respectively, and its losses are 507 million, 423 million and 207 million yuan respectively.
In the first quarter of this year, Bruco turned losses into profits, with revenue of about 466 million yuan, a year-on-year jump of more than 200%; The profit is about 46.711 million yuan (adjusted profit of 120 million yuan). Its toy sales exceeded 24 million in the first quarter.
According to the data, Bruco was founded in December 2014 (formerly known as Grapevine Technology). Zhu Weisong, the founder of Bruco, and Lynch, Chen Libiao and others jointly founded Youzu Network 。
In the first half of 2014, Youzu Network was successfully listed. Zhu Weisong, then 32, was worth billions of yuan.
As a father, he chose to co founded Grapevine Technology with his friend Lin Taijun to start his second venture in the direction of children's education. Sheng Xiaofeng, Xie Lei, Huang Zheng and others joined in succession.
In 2016, Bruco began to research and develop building block toys. In 2017, Bruco launched its own IP, "The Changing Bruco". In 2022, Bruco launched a combination of role toys (that is, building block people) and its own IP, "Heroes Are Unlimited".
Bruco has carried out many rounds of capital increase and equity transfer. The financing is mainly divided into angel round, Pre-A round and A round, with the amount of 857 million, 330 million and 600 million respectively, totaling nearly 2 billion yuan.
Among them, Alibaba Cloud Fund invested 330 million yuan in Bruco (excluding the amount of old shares purchased in this article), Zhu Weisong invested 160 million yuan, Lynch invested 100 million yuan (shares have been transferred), Chen Libiao invested 70 million yuan (most of the shares have been sold), and Junlian and Source Code also invested hundreds of millions of yuan respectively.
At present, Bruco's main business is to launch building block toys with authorized or own IP addresses. The mode is shown in the figure (click to zoom in).
Bruco revealed more information this time. Cultural and creative trends are interpreted from the product and IP levels.
At present, there are still many toy or retail enterprises that want to be listed in Hong Kong, such as card "One Brother" card game and the KK Group of X11.
Product: Benchmarking Bandai and Lego, pushing the category of "building block people"
As of March 31, 2024, there are 391 SKUs on sale in Bruco, including 130 SKUs for children under the age of 6, 243 SKUs for people aged 6-16, and 18 SKUs for people aged over 16.
Bruco divides its products into two categories: "role toys" and "building block toys".
According to the unit price, Bruco's products can be divided into four categories: low price (below 20 yuan), Volkswagen (20-49 yuan), middle end (50-99 yuan), and high-end (100 yuan and above).
For example, the Altman Star Edition launched in January 2022 will be priced at 39 yuan; The Hero Infinite Star Edition launched in December 2023, priced at 19.9 yuan; There are also 9.9 yuan cost-effective products to be launched.
Bruco's building block man product was developed in 2019 and officially launched in 2022, with sales of 118 million yuan, 769 million yuan in 2023 and 453 million yuan in the first quarter of 2024.
In the prospectus, Bruco repeatedly emphasized his accumulation in "role toy products", claiming to be the "largest" and "world leading" role toy enterprise in China, with more than 400 patents accumulated.
At present, the best sales performance of Bruco's building block man toys is Altman IP.
The weekly statistics of cultural and creative trends also show that Bruco's Ottoman building block products have entered the top 20 blind box sales for many times. In the next part of this article, I will interpret IP.
At the same time, the "building block toys" that once contributed 97.5% of Bruco's income have shrunk all the way to 2.6%. The sales of 2021, 2022, 2023 and 2024Q1 are about 322 million yuan, 207 million yuan, 106 million yuan and 12.104 million yuan respectively, which can be said to have experienced a quite abnormal decline.
Brooke's explanation for this is that the strategic focus has shifted to building block people, and the investment in the original building block toys has been reduced.
In e-commerce stores such as the Tmall flagship store in Brooke, new products such as building block cars have been launched, which are still among the best sellers.
However, the current channel focus of Bruco is offline dealers.
As of March 31, 2024, Bruco has 433 dealers nationwide, covering more than 140000 offline outlets, including Toys R Us Kid King , cool music, Wal Mart, etc.
At the beginning of 2021, there were only 40 dealers.
At the same time as the number of dealers has soared, the proportion of revenue from the dealer channels has also increased significantly.
In the first quarter of 2021, 2022, 2023 and 2024, the sales of Bruco to offline dealers are about 113 million yuan, 157 million yuan, 733 million yuan and 424 million yuan respectively.
As of March 31, 2024, Bruco had 410 full-time employees. Among them, 254 are R&D personnel, 92 are sales personnel, 26 are marketing personnel, and 38 are management and administration personnel.
The production of Brooke building blocks is mainly in cooperation with external factories.
In 2023 and the first quarter of 2024, the purchase amount of Bruco and the top two suppliers (both are cooperative factories) accounted for 66.7% and 55.2% of the total purchase amount respectively.
Wen Chuangchao noticed that at present, the production factory of Brooke's best-selling products is quite qualified in the field of mold opening and injection molding, mainly cooperating with Rongchangsheng, Yingdong Group, etc.
By focusing on the category of "building block people", Brooke hopes to highlight its position in the industry. In the prospectus, he quoted consulting agency data (paid 550000 yuan for market research) and said that he is "the third largest player in the global toy market", second only to Bandai and Lego.
Bruco also disclosed that the total number of fans on various online platforms exceeded 11 million, claiming that it was "the second largest brand among Chinese toy enterprises".
IP: Altman is authorized to sell well, and continues to invest in originality
So far, Bruco has obtained more than 30 IP licenses, including Altman, Transformers, Naruto, Marvel, Little Yellow Man, Baokemeng, Masquerade Knight, Detective Conan, Chuyin Future, Saint Star, New Century Gospel Warrior, HelloKitty, Sesame Street, and so on.
Similar to the previous card game, Bruco's most important IP is Altman, with 133 SKUs. The second is Transformers, with 53 SKUs; 59 kinds of products of "Changing Bruco"; "Unlimited Heroes" 31.
In 2021, Bruco obtained the authorization from Altman from Xinchuanghua. The next year, Bruco began to launch the "Altman Star Edition", a product of building blocks combined with blind box play.
At present, this product line has launched 11 series, and the sales volume has increased from 140000 in the first series to 4226800 in the tenth series.
The popularity of "Altman Star Edition" has increased Brooke's income and improved its profits, while its dependence on IP copyright owners such as Xinchuanghua and production bases such as Yingdong Group has also increased.
According to the cultural and creative tide, the IP licensing fees paid by Bruco to Xinchuanghua will be about 10 million yuan in 2022, 53 million yuan in 2023, 23.65 million yuan in the first quarter of 2024, and may exceed 100 million yuan in the whole year.
In the prospectus, Bruco mentioned the risk of IP concentration. Its coping strategies include enriching the authorized IP matrix and persisting in creating original IP.
In 2023, 91.7% of Bruco's "role toys" revenue will come from authorized IP, and the proportion will drop to 84.2% in the first quarter of this year, mainly due to the increase in sales of its own IP products.
Bruco's original IP includes the children's animation "The Changing Bruco" and "Heroes Unlimited" created through short films.
The film is mainly aimed at preschool people. The story revolves around the three main characters "Bu Bu", "Lulu" and "Coco". Since 2017, 214 episodes of TV animation have been launched. In September 2023, the film "Bu Bu Bu 8 Super Change Pioneer Rescue" was filed.
Launched in 2022, Heroes Unlimited uses an IP development method that is more "ingenious" than the ever changing Brooke: combining well-known Chinese characters such as Sun Wukong, Nezha, Niu Demon King, Guan Yu, Zhang Fei, Zhao Yun, Yang Jian, etc. with mecha elements. It has released 48 episodes.
Toy manufacturers such as Kayou and MotonCore also adopted a similar approach when creating original IP, and launched respectively Kayou Three Kingdoms and Star Armor Soul Legend combining Chinese characters.
As of March 31, 2024, Bruco has more than 4 million fans of its two own IP addresses across the network, and the total amount of animation playback has exceeded 14 billion.
Massive information, accurate interpretation, all in Sina Finance APP
Editor in charge: Jiang Yuhan
