In the past 2021, Aofei Entertainment (002292, SZ) achieved operating income of 2.644 billion yuan, an increase of 11.66% year-on-year. In general, in 2021, when the epidemic was affected by the epidemic, trade policy changes, and the prices of shipping and bulk raw materials rose, Aofei Entertainment successfully stabilized the performance of the basic disk and achieved positive growth.
Entering 2022, the cost of shipping and raw material prices are still at a relatively high level, and the net profit of Aofei Entertainment in the first quarter is under pressure. However, according to He Dehua, president of Aofei Entertainment, the revenue and net profit of Aofei improved in the first quarter. At the same time, He Dehua also said that the company has begun to promote the listing of new products and appropriately increase the pricing of overseas products to cope with the rise in operating costs.
He Dehua also detailed the business plans of the major major sectors of Aofei Entertainment in 2022. He said that in the toy business, "Audi Double Diamond" will have a brand upgrade action this year; the "Aobei" brand will continue to expand its advantages and incubate new categories of durable goods; in terms of IP film and television, Aofei Entertainment is expected to launch 1 to 2 new children's IP in the second half of the year.
Companies can handle uncertainties with ease
From the perspective of the general environment, the current pressure on Aofei Entertainment is universal. Rising maritime costs and rising raw material prices are common problems faced by most A-share listed companies. According to reports, due to the imbalance between supply and demand caused by the global epidemic, the price of seaborne shipping rose in the second quarter of last year. According to the Shanghai Air Exchange, the "arrival and departure service on-time" of the global main route from Asia to the west coast of the United States was only 11% in January this year, continuing to maintain a low level.
He Dehua said that from the recent data, the current maritime prices have dropped slightly. In order to cope with the rising costs, the management of Aofei Entertainment has also formulated countermeasures, including enhancing product strength, promoting the listing of new products, improving gross profit margins, moderately increasing the pricing of overseas products, and actively communicating with suppliers and signing insurance agreements.
At present, the results seen are that the product strength of Aofei Entertainment is improving, and the sales share of new products is growing at the same time. Secondly, He Dehua also revealed that the company's export product pricing adjustment has been promoted in early April and is expected to be completed within this year, "which will help to increase the average gross profit of the company's business and reduce the impact of external factors." ”
Looking forward to the whole year, He Dehua expects that Aofei Entertainment can relatively calmly cope with the changes in uncertainty brought about by the objective environment.
He Dehua, President of Aofei Entertainment
Judging from the 2021 annual report of Aofei Entertainment, "toy sales" and "baby and child products" have become the company's "fist" business and the core support of the company's revenue. Among them, toy sales revenue last year was 1.044 billion yuan, an increase of 5.87% year-on-year, accounting for 39.49% of the total revenue of Aofei Entertainment.
The annual report shows that last year, thanks to the effective control of the epidemic, the market consumer demand gradually picked up, and the company's toy business gradually returned to normal. He Dehua said that in the first quarter of 2022, the company's revenue increased compared with the fourth quarter of last year.
Aofei Entertainment's toy business mainly includes two brands, "Audi Double Diamond" and "Play Point Unlimited", of which "Audi Double Diamond" is mainly based on children's IP and category toys, and "Play Point Unlimited" is the tide play brand launched by the company in recent years.
He Dehua revealed that in 2022, the "Audi Double Diamond" brand plans to focus on the product line and focus on the derivative toys of its own IP. In addition, "Audi Double Diamond" will reactivate the original advantageous categories and evergreen categories of Aofei on the basis of the original gameplay this year, and plans to launch new projects.
He also said that "Audi Double Diamond" will have a brand upgrade this year, as well as actions related to the rejuvenation of the brand image.
In the tide play business, Aofei Entertainment participated in the well-known Kaitian Studio in the field of tide play sculpture last year. At the beginning of this year, the company, together with Kaitian Studio and Beijing Intelligent Manufacturing Technology, jointly launched the "Pleasant Goat" big movie "Pleasant Goat" two chuang tide play hand--"Lightning Happy Goat". In addition, Aofei has reached a cooperation intention with "Glory of kings" and plans to launch tide play products related to "glory of kings".
The revenue scale of the baby and child business continued to maintain double-digit growth
It can be seen from the financial reports of Aofei Entertainment over the years that the baby and child business is a business segment that has grown rapidly in recent years. In 2016, the proportion of baby and child product revenue to total revenue was only 15%, and in 2021, 5 years later, the proportion of baby and child product revenue to total revenue has climbed rapidly to 39.12%, and the status is comparable to that of "toy sales".
In 2021, the company's baby and child products business revenue increased by 14.17% year-on-year. He Dehua said that the company's baby and child business continues to grow at a double-digit rate.
Aofei Entertainment's baby and child business mainly includes two brands, "Babytrend" and "Aobei Mother and Baby", Babytrend is mainly based on the North American and international markets, and its product categories include strollers, car seats and feeding toys. Aobei Mother and Baby is mainly based on the domestic market, and its product categories include professional educational toys and safe paper products.
In recent years, Babytrend's business development is ideal, and the revenue scale and market share have steadily increased. At the beginning of last year, Aobei Mother and Baby also firmly upgraded its brand in the direction of big mother and baby.
In 2021, Aofei Entertainment's baby and child business maintained a growth trend among the three major retail customers of Walmart, Amazon and Target, while mid-level customers such as Burlington also achieved higher growth rates. In terms of products, new products have become the engine of sales growth, with new product sales increasing by nearly 100% year-on-year, and the proportion of new product sales increasing from 15% in 2020 to 25%. In terms of developing C-end business, Aobei also continued to focus on live streaming with goods, social e-commerce and other businesses last year, so last year's "Aobei Mother and Baby" online business increased by nearly 60% compared with the same period in 2020.
Baby Bear Towel
He Dehua said that the three types of products such as cotton soft towels, fitness racks and rattle teether are the three major explosive products of "Aobei Mother and Baby". The current product strategy of "Aobei Mother and Baby" is: first, expand the category advantages in infant standard products, early education educational toys, etc.; second, expand the secondary advantage categories such as paper products and baby carriages; third, incubate new categories of durable products such as infant fences and cribs.
It is reported that in the first quarter of this year, Aobei also iteratively upgraded its paper products and classic baby educational toys, and launched new products such as the selection of Xinjiang long-staple cotton bear cotton soft towels, suitable for music early education, cute cat paradise fitness rack and other new products.
It is planned to deepen the operation of animation IP with more elements
He Dehua said that IP film and television, toys and baby and child businesses are the three major supporting businesses of Aofei Entertainment. Last year, the revenue of film and television products accounted for 12.65%, and the revenue of television media accounted for 3.13%.
Over the years, Aofei Entertainment has adhered to the construction of an animation culture industry ecology with animation IP as the core, and created an "IP + whole industry chain" operation platform that is user-centered, covering infants to K12+ people, and integrating animation, movies, licensing, toys, babies and children, tide play hands, theme business and other businesses.
According to He Dehua, in the IP film and television business, Aofei Entertainment will continue to create high-quality content this year. He said that Super Flying Man, Pleasant Goat and Gray Wolf, Balala Little Magic Fairy, etc. will launch a new series of animated episodes this year; in terms of movies, the company will launch an upgraded version of the animation movie around the head TV animation IP, planning to release 1 to 2 works per year; in the second half of this year, Aofei Entertainment will also launch 1 to 2 new children's IP, and continue to deepen the K12 quality content matrix.
It is worth noting that from the animation works launched in April this year, the new season of Balala Little Magic Fairy's Magic Star Edge Fort ranked first in the list of children's content, tencent children's animation, and the top three of Youku children's animation hot list on the day after it was launched.
In terms of animation IP licensing, He Dehua said that in addition to focusing on key authorized categories such as food and beverages, daily chemical products, and clothing accessories, the company's IP licensing team has also actively expanded emerging licensing models and licensing platforms, seeking to expand the field of IP licensing, focusing on breaking the circle of young people's market. "In recent years, the company's licensing business in the fields of entertainment education, young trends and cross-border marketing has also grown, and the commercial malleability of IP has been further verified."
Audi double diamond IP toy
In addition, Aofei Entertainment also seizes market opportunities, actively lays out emerging tracks, and seeks diversified monetization of animation IP.
For example, around the development strategy of IP+ content, Aofei Entertainment participated in some companies in the VR/AR field in the early days, including Beijing Nuoyiteng and Guangdong Virtual Reality, covering the all-round layout from action data acquisition + 3D content production + hardware.
In terms of digital collections, since the fourth quarter of last year, Aofei has begun to test the digital collection distribution with platforms such as whale detectives and ticket sales with its own IP and some agent IP, and the distribution products include digital collections such as the player card exclusive to the "Pleasant Goat and the Gray Wolf" movie. At the same time, the company also cooperated with Ant Group and Zhanku Network to launch the National Comics Second Creation Competition, which made the award-winning works into digital collections and distributed them on the whale exploration platform.
He Dehua believes that digital collection is a new type of carrier that stimulates young people's second creation and makes IP glow with new charm. This year, the company will also explore this aspect to explore the long-tail value of IP. "We will continue to pay attention to and explore new trends and new technologies, and explore the possibility of IP meta-universe applications with virtual digital products such as digital collections, digital handmade products, and digital models as the starting point."
"Lightning Happy Sheep" digital collection
(This article does not constitute any investment advice, and the content of information disclosure is subject to the company's announcement.) Investors operate accordingly at their own risk. ）
Text/With the Wind