New stock outlook | Master of Copper: Copper cultural and creative industry leader, what capital story is hidden in the 10 billion level track?

The casting wisdom of Shang and Zhou Dynasty bronze ware spans thousands of years and in the current wave of consumer upgrade, it has created new market opportunities. On May 9, 2025, Hangzhou Copper Master Cultural Innovation (Group) Co., Ltd. (referred to as "Copper Master") submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CMB International as the sole sponsor. As the leading brand in the Chinese copper cultural and creative products market with a market share of 35%, Copper Master reported an annual revenue of over 500 million, a gross profit margin of over 30%, and an average customer transaction value of over 750 yuan. However, it also faces the dual pressures of industry ceiling and homogenization competition. This IPO is not only a key move for Copper Master to seek growth breakthroughs, but also provides a sample for the integration of the copper cultural and creative industry with the capital market. Exploring sustainable commercial paths within a limited market space has become the core issue facing the company. The leading brand in Chinese copper cultural and creative products According to the prospectus, Copper Master was founded in 2013, with copper as its core material, and its products include copper cultural and creative products, plastic trendy toys, silver cultural and creative products, and gold cultural and creative products, among other categories, with copper cultural and creative products being the core of the product matrix. In 2022-2024, the revenue from copper cultural and creative products accounted for 95.4%, 96.3%, and 96.6% of the total revenue in the same period. As of December 31, 2024, the company ranked first in the Chinese copper cultural and creative product market in terms of total revenue, with a market share of 35%. In terms of business model, Copper Master has built a vertically integrated system from research, design, development, production to sales. As of the end of 2022, 2023, and 2024, the company's SKUs were 2,137, 2,296, and 2,485, respectively, with new SKUs launched each year numbering 464, 382, and 574, respectively. In terms of sales channels, the majority of the company's revenue comes from online direct sales through third-party e-commerce platforms in China. For the years 2022-2024, online direct sales (mainly from flagship stores on platforms like Tmall, JD.com, and Douyin) accounted for 70.6%, 69.9%, and 70.5% of total revenue, and with the addition of online distributors, online channel revenue accounted for 80.9%, 79.2%, and 77.2% of total revenue during the same period. Additionally, the company is expanding its offline channels, operating a total of 9 direct stores as of December 31, 2024 and having 54 authorized offline distributors operating 68 stores. Financial data shows that in 2022, 2023, and 2024, the company's operating income was 503 million yuan, 506 million yuan, and 571 million yuan, respectively; with gross profit margins of 32.2%, 32.4%, and 35.4%, respectively; and net profits of 56.938 million yuan, 44.131 million yuan, and 78.982 million yuan, respectively. The ceiling for core business growth is low Despite Copper Master's leading position in the industry through its vertically integrated business model in the niche area, the inherent limitations of the industry are becoming a hurdle for further expansion. Although the Chinese cultural and creative product market exceeded 354 billion yuan in 2024, the sub-segment of copper crafts presents a "small but refined" characteristic. According to the Frost & Sullivan report, the Chinese copper cultural and creative product market was only about 1.6 billion yuan in 2024, accounting for less than 0.5% of the cultural and creative market. Although it is expected to grow to 2.282 billion yuan by 2029, the growth scale is relatively limited. Despite Copper Master's stable position as the industry leader with a 35% market share, its annual revenue volume has remained around 500 million yuan over the past three years, indicating constraints due to track capacity. According to the Frost & Sullivan report, as of 2024, the penetration rate of copper cultural and creative products in cities is only 2.34%, and even lower in rural areas, below 1.4%. Even by 2029, the expected penetration rate in cities is only expected to rise to 2.58%. In comparison, the trendy toy market, which also focuses on cultural attributes, had exceeded 70 billion yuan in 2024, thanks to its rich product matrix and popular price system, covering consumers of all ages throughout the year, further highlighting the natural shortcomings of copper cultural and creative products in terms of audience breadth and market penetration. In a limited market space, the competitive situation in the industry is becoming more severe. According to the prospectus, there are about 1,000 companies in China specializing in the production of copper cultural and creative products, including well-known national brands and many local small and medium-sized enterprises and workshops. Many small and medium-sized manufacturers use cost advantages and low-price strategies to capture the mid-to-low-end market. In the high-end field, silver and gold cultural and creative products compete with copper crafts due to the scarcity of materials and higher added value. This "sandwiched" market situation increases the difficulty for Copper Master to achieve breakthrough growth within the existing track. Facing industry scale limitations and competitive pressures, Copper Master has outlined a multi-dimensional breakthrough path in product innovation, capacity upgrade, and market expansion in the prospectus. On the product side, relying on the research and development team, the company has built an innovative system of "traditional + trendy." On one hand, it taps into traditional cultural resources; on the other hand, it strengthens IP collaboration strategies to expand coverage to a younger customer base. At the same time, continuing the pace of launching over 400 new products per year in 2022-2024, the company plans to maintain a high frequency of new releases from 2025 to 2027 to enrich the product matrix. On the production and operation side, the company plans to upgrade production capacity at its Hangzhou factory through equipment updates and workforce expansion. The prospectus indicates the purchase and installation of new production equipment and the hiring and training of approximately 250 production personnel to improve fulfillment flexibility and long-term supply capacity. On the market expansion side, a strategy of simultaneous globalization and localization is being implemented. In 2025, the company plans to first enter markets in Hong Kong, Japan, and Italy through exhibitions and other means, gradually extending to Western Europe and North America. In the domestic market, the focus is on offline channels, with plans to add 30 new direct stores in high-end commercial districts in core cities over the next three years, and digitally upgrade management of existing stores to strengthen terminal service capabilities. In summary, in the context of a limited track size and fierce competition, the strategic implementation of product innovation, capacity upgrade, and market expansion by Copper Master will be the key to breaking through growth barriers. If the planned strategies are effectively executedThe company not only has the potential to achieve breakthrough performance, but also provide a feasible path for the commercialization of traditional craftsmanship. However, the market environment is complex and changeable, factors such as fluctuating raw material prices, evolving consumer demands, risks in overseas markets, etc., may all affect the effectiveness of strategic implementation and capital operation. Continued attention is required for the future development of Copper Master.Je suis trop fatigu pour sortir ce soir.