Who says the stock market is less profitable than the cryptocurrency market? The Hong Kong stock market has gone completely crazy recently!
A company that sells packs of cards for 1.7 yuan is surprisingly going public.
It is known in the industry as the 'child harvesting machine'—Card Game (Zhejiang Card Game Animation Co., Ltd.)—with revenue of 10.057 billion yuan in 2024, a net profit of 4.466 billion yuan, and a gross profit margin of 67.3%. What does this mean? It translates to a net profit of 67 yuan for every 100 yuan worth of cards sold!
In comparison, the 'king of blind boxes' Pop Mart, which drives young people crazy, had a revenue of 13.04 billion yuan and a net profit of 3.125 billion yuan in 2024. Card Game earned 1.4 times the profit with less than 80% of Pop Mart's revenue. Even more astonishing is that Card Game's gross profit margin exceeds that of Pop Mart by nearly 20 percentage points, making it a 'fighter in the realm of high profits.'
The capital market is in a frenzy. Analysts predict that once Card Game is listed, its market value may surpass Pop Mart's 230 billion HKD, becoming a new 'wealth creation myth' in the Hong Kong stock market. After all, which company can earn 4.4 billion before its IPO? Even Tencent and Alibaba would have to call it 'big brother.'
A pack of cards costs 1.7 yuan, draining elementary students' pocket money.
Card Game's 'wealth code' is hidden in each small pack of cards.
At the gates of elementary schools nationwide, children clutch their pocket money, staring intently at the 'Ultraman cards' on the shelves. A pack of cards costing 1.7 yuan might contain a highly rare 'SSR card.' To complete their card sets, children buy them by the box and even sneakily use their parents' money to 'spend.'
This strategy is even more ruthless than drawing cards in games.
Parents are complaining: 'For a single card, kids can spend all the family savings!' But Card Game understands human weaknesses—children have the least self-control, and parents are willing to spend on their kids. Leveraging this 'precise targeting,' Card Game sells 4.8 billion packs of cards a year, equivalent to each Chinese person buying 3 packs.
What’s even more astounding is that Card Game has captured the essence of the 'blind box economy' with its card games. The probability of drawing rare cards is absurdly low, and a rare card can be sold for tens of thousands in the second-hand market. This form of 'gambling consumption' is irresistible to children and has made Card Game extremely profitable.
The founder's comeback: From water conservancy worker to 'King of Cards.'
The founder of Card Game, Li Qibin, actually has a very legendary entrepreneurial story.
He was originally a water conservancy worker with a 'stable job.' In the 1990s, his family business failed, leaving a debt of 3 million yuan, forcing him to venture into entrepreneurship. By chance, he discovered that the cards included with bubble gum could trigger consumption desires, so he used his last 10,000 yuan to set up a printing company specializing in making cards.
In 2013, Li Qibin set his sights on the Ultraman IP. He spared no expense to acquire the rights to use Ultraman cards, launching the 'Ultraman Series Cards' that became an instant hit. However, his ambition was too great; he attempted to build an anime industry chain, leading to a broken capital chain, factory shutdowns, and unpaid wages for employees. Overnight, he became a 'big swindler,' disappearing without a trace.
It wasn't until 2017 that Card Game emerged. Li Qibin changed his 'disguise' and re-entered the market. This time he was smarter, hoarding IP crazily—Ultraman, Naruto, Harry Potter, Douluo Continent... By 2025, Card Game held over 70 top-level IPs, covering consumers of all ages, and was dubbed 'the one who understands Chinese children best among the 70s generation.'
The path to Hong Kong IPO
Card Game's success is not only reflected in its grasp of the children's market but also in its capital operations. In 2021, Card Game received Series A funding from Sequoia China, accelerating its expansion and capturing 71.1% of the market share, becoming the leader in the Chinese card market.
However, Card Game has not had a smooth journey. Its IPO path was rocky from the start.
In January 2024, the first prospectus for a Hong Kong IPO was submitted, but a month later it was placed on a list due to the CSRC's requirements for supplementary materials for overseas issuance and listing. The regulatory body raised multiple questions regarding the equity structure, data security, and protection of minors' information. Due to failure to meet regulatory requirements in a timely manner, Card Game's initial application expired at the end of July 2024. The company is currently updating its prospectus to restart its Hong Kong IPO, still needing to face the issues mentioned above. Given the ongoing regulatory focus on data security and protection of minors, Card Game must enhance its compliance measures and provide clear answers to improve the chances of a successful listing.
On one hand, its financial data is almost 'perfect': with revenue exceeding 10 billion yuan in 2024, a net profit of 4.466 billion yuan, and a gross profit margin of 67.3%, holding 71.1% of the market share. These figures are enough to crush 90% of listed companies, which is why Sequoia and Tencent are eager to invest.
On the other hand, Card Game's business model hides risks.
Regulatory risks: In 2023, the government introduced guidelines to regulate blind box operations, prohibiting the sale of blind boxes to children under 8. Although Card Game claims to have 'strengthened age prompts,' investigations found that there are still many violations in its terminal sales. This is why Card Game, while updating its prospectus, couldn't help but approach the Hong Kong IPO with a sense of 'urgency.'
IP dependence: Of the 70 IPs Card Game holds, only 1 is proprietary; the rest rely entirely on licensing. If the copyright holders terminate their cooperation, Card Game's 'card empire' could collapse in an instant.
Concentrated equity: Li Qibin and his wife hold 83.5% of the shares, having cashed out 1.8 billion yuan in the three years leading up to the IPO. This 'one-man rule' ownership structure raises concerns among investors about corporate governance transparency. But Card Game clearly wants to capitalize on the momentum—following Pop Mart's overseas expansion story by selling Ultraman cards globally, continuing to harvest foreign children.
With the successful listing of Mixue Ice City, investors in the Hong Kong stock market have become more open, and more and more 'losers' are preparing to try again. Card Game has also decided to restart its IPO plan, submitting its prospectus to the Hong Kong Stock Exchange in April 2025.
Who is footing the bill? The 'sweet burden' of parents.
The success of Card Game lies in the 20% annual growth rate of the children's consumption market, essentially capturing the 'anxiety' of Chinese parents.
Today, there are 245 million children aged 0-15 in China, with young parents willing to spend 30%-50% of their household expenses on children's consumption, preferring to save on their own needs to ensure their children are 'not left behind.' This mentality has given rise to a children's consumption market worth nearly 60 trillion yuan.
Card Game has keenly grasped this psychology—using randomness to stimulate the desire to collect and employing social attributes to create comparisons, making elementary school students 'cry and fuss' to force their parents to pay.
However, this 'overconsumption' is causing social controversy. Some parents complain: 'My child steals my credit card to buy cards and even skips class to get them!' Experts point out that the 'gambling mechanism' of cards may lead minors to addiction, impacting their physical and mental health.
The future path: From 'King of Cards' to global giant?
Card Game's ambitions extend far beyond the domestic market.
It is replicating the overseas expansion strategy of Pop Mart, selling cards to Japan, South Korea, and Southeast Asia. In 2024, Card Game partnered with Hasbro to acquire global rights for My Little Pony, with English and Japanese versions of the cards already on sale overseas. At the Paris International Expo, Card Game's national trend cards have also attracted the interest of foreign collectors.
If all goes well, Card Game may become the first 'cross-border card giant' in China. But this path is not easy—Japan has Pokémon and Yu-Gi-Oh, and the US has Magic: The Gathering. How will Card Game break into these mature markets?
Conclusion: How long can children's money be earned?
Card Game's IPO is a collective bet by capital on the 'children's economy.'
Its success proves that 'children's money is the easiest to earn'; its controversies also expose the moral risks of its business model. While we marvel at the 4.4 billion net profit, we should also consider: how long can such a 'high-profit business' last?
Perhaps Card Game's story is just a microcosm of the Chinese consumer market. Under the 'involution' of parenting anxiety, parents are using real money to pay for their children's 'happiness.' And capital will never miss any 'windfall.'
