Top Toy, the designer toy brand under Miniso, has filed its prospectus with the Hong Kong Stock Exchange, launching plans to list on the main board and raise about USD 300 million. On the same day, parent company Miniso confirmed the spinoff and said Top Toy would remain its subsidiary after the listing.
Founded in 2020, Top Toy was launched shortly after Miniso’s New York Stock Exchange debut, a period marked by mounting performance pressure and consecutive losses. In response, founder Ye Guofu introduced the concept of “interest-driven consumption,” betting on the growing designer toy segment for new growth. The first Top Toy store opened in Guangzhou that same year.
Five years on, the brand has grown into a key player in China’s designer toy market. According to field visits by 36Kr, some Top Toy outlets in major shopping districts attract foot traffic comparable to Pop Mart’s and surpass that of competitors such as Kayou and 52Toys.
The prospectus shows that Top Toy focuses on three product categories: figurines, 3D model kits, and soft vinyl plush toys. These are divided between self-developed and third-party lines. Its self-developed products include both proprietary and licensed IPs, while third-party products come from external brands.
Strong performance, but slowing growth
Despite entering the market late, Top Toy benefited from a fast-growing sector. Citing data from Frost & Sullivan, 36Kr reported that China’s designer toy market grew from RMB 20.7 billion (USD 2.9 billion) in 2019 to RMB 58.7 billion (USD 8.2 billion) in 2024, a compound annual growth rate (CAGR) of 23.2%. The market is projected to reach RMB 213.3 billion (USD 29.9 billion) by 2030 at a 20.9% CAGR.
Supported by this momentum, Top Toy’s revenue and net profit have risen steadily. The company reported RMB 1.909 billion (USD 267.3 million) in revenue for 2024, up 30.6% year-on-year. From 2022 through the first half of 2025, its store count grew from 117 to 293, including 30 new directly operated outlets, 141 new franchise stores, and five new agency stores.
However, revenue growth has lagged behind store expansion. While store numbers nearly doubled in 2024, revenue increased only 31%. In comparison, Pop Mart grew its store count by 20% in the same year but more than doubled its revenue, up 106.9%.
Expansion has also slowed. In the first half of 2025, Top Toy opened 17 new stores, down sharply from 128 in 2024, and closed two directly operated locations.
Designer toys account for about 97% of total revenue, with dealers contributing nearly half of sales, followed by franchise partners, directly operated stores, and other channels.
Profitability remains limited by this channel mix. Because distributors and franchisees handle most of the sales, profit margins are compressed by revenue sharing. Between 2022–2024, gross margin hovered between 28–30%, lower than peers such as Bloks and Pop Mart.
Top Toy’s asset-light model keeps selling expenses low, with ratios of 2.2%, 1.0%, and 1.1% over the same period, respectively. Rent costs account for only a small portion of expenses, supporting rapid expansion in the short term.
The company turned profitable in 2023, reporting net profits of RMB 297 million (USD 41.6 million) in 2024 and RMB 180 million (USD 25.2 million) in the first half of 2025. Net margin stood at 13.2%, constrained by weak profitability in its core operations.
Can its vision hold up?
Top Toy’s relatively low gross margin also reflects its IP strategy. The company positions itself as an IP marketplace centered on secondary creations of major franchises. It holds licenses for 43 global IPs, including Disney, Sanrio, and GG Bond, as well as more than 600 third-party IPs. Its own IP portfolio, however, remains small, with just 17 proprietary creations to date.
While the share of self-developed products has risen from 39.6% in 2022 to 49.1% in 2024, third-party products still account for over half of total sales. Within self-developed lines, proprietary IPs contribute little. In the first half of 2025, they generated only RMB 6.1 million (USD 854,000), compared with RMB 615 million (USD 86.1 million) from licensed IPs.
CEO Sun Yuanwen once drew a comparison:
“Pop Mart is like Apple’s iOS, a closed system where everything is its own. [Top Toy is] more like Android, a platform that accommodates others’ IPs and products.”
36Kr also found that Top Toy stores prominently feature Sanrio and Disney displays, which draw consumers organically and reduce the need for heavy advertising. This has seemingly helped the company maintain a low sales expense ratio relative to peers.
Still, the absence of a breakout proprietary IP weakens its brand appeal among Gen Z consumers. Dependence on external IPs also exposes it to rising licensing fees and contract expirations.
Designer toys command premium prices through unique IP value and emotional connection. Licensed IPs, by contrast, often lack exclusivity because licensors typically authorize multiple manufacturers. This leads to product homogenization and limits Top Toy’s ability to build long-term brand strength. Frequent discounting to clear inventory further erodes brand equity and margins.
In the past, Miniso covered part of Top Toy’s licensing costs, keeping expenses low. Following internal restructuring, Top Toy will now assume full control of R&D and sign future licensing deals independently.
To better align with Gen Z preferences, the company is investing in proprietary IPs. In the first half of 2025, it acquired a 51% stake in HiToy for RMB 5.1 million (USD 714,000), gaining access to IPs such as Nommi, Honey, and MayMei. Ahead of its filing, Top Toy also acquired IPs including Ninimo.
Miniso founder Ye Guofu recently emphasized IP ownership as a strategic priority, saying Miniso will expand its IP development efforts and evolve from a retail company into a cultural and creative enterprise.
“Top Toy needs to convince Hong Kong investors that its IPs can generate value beyond its retail network,” said Gao Chengyuan, CEO of marketing firm Tiaoyuan. “At this stage, the company’s valuation can only lean toward high-turnover retail, with a price-to-earnings ratio of 25–30 times.” Developing strong proprietary IPs, he added, will be essential to securing a higher valuation.
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The hard road to independence
If IP strength defines Top Toy’s competitiveness, its channel independence from Miniso may determine its market valuation.
As of the latest reporting period, Top Toy operated 38 directly owned stores, 250 franchise stores, five agency stores, and worked with 53 distributors. Revenue from distributors accounts for more than half of total sales.
Under the franchise model, partners operate stores and pay consulting fees to Top Toy while sharing revenue. In the first half of 2025, franchisees contributed 25% of total revenue. Distributors, meanwhile, purchase inventory from Top Toy and resell it to consumers. Miniso remains its largest distributor, accounting for RMB 923 million (USD 129.2 million) in 2024 and RMB 619 million (USD 86.7 million) in the first half of 2025, or 48.3% and 45.5% of total revenue, respectively.
Leveraging Miniso’s retail network has accelerated market penetration but also constrained Top Toy’s ability to establish an independent brand identity. Immersive flagship stores are key for designer toy brands to create emotional engagement, while Miniso’s variety store format dilutes that experience.
Heavy reliance on distributors also delays market feedback because consumer trends may take longer to reach the company. Directly operated stores, by contrast, offer real-time insights into Gen Z preferences and enable quicker product iterations.
To strengthen its brand, Top Toy plans to reduce dependence on distributors. Management expects its domestic store count to reach 380 to 400 by year’s end and aims to expand overseas to 100 countries with 1,000 stores within five years.
That strategy could influence valuation. “Excessive dependence on Miniso’s channels and franchise model may cap Top Toy’s long-term growth potential,” said Wang Peng, associate researcher at the Beijing Academy of Social Sciences. “Unless it proves its channels can operate independently, the Hong Kong market is likely to apply a valuation discount.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Chen Sizhu for 36Kr.