CICC: The future of the card game industry still has high development prospects. Copyright holders with differentiated IP reserves and perfected operational capabilities may have a competitive advantage.

Golden Securities released a research report stating that in recent years, the collectible card industry has entered a period of rapid development, with an increasing number of participants in the industry chain. The integration and development of the industry chain is expected to further mature, with a high potential for the industry market size to continue growing. In the market environment where the value of intellectual property is increasingly prominent, copyright holders with differentiated IP reserves and sound operational capabilities are likely to have a competitive advantage. Key points from Golden Securities include: Current Situation and Industry Chain Analysis: The scale of the domestic card industry is rapidly growing, with increasing integration and development along the industry chain. Cards attract consumers of all ages with their diverse types and gameplay, reaching a wide audience. According to Zhishizixun, the market size of collectible card games in China is expected to reach 26.3 billion yuan by 2024, accounting for 25.8% of the overall entertainment toys industry market size. Looking back at the development history and comparing it to the markets in the United States and Japan, the card industry in China started relatively late but entered a period of rapid growth after 2017, with an increasing number of participants in the industry chain including IP holders, manufacturers, distributors, and sellers. The domestic card industry has great growth potential in the future and is expected to see further integration and development. Demand Structure Analysis: Structural growth in domestic demand, driven by product innovation and channel follow-up. In the backdrop of the mature internet landscape and limited entertainment time in China, the card and other interest consumption tracks are experiencing structural growth opportunities. This is mainly due to the wide audience and young demographic of card consumers, low price thresholds, consumption patterns driven by emotional value, strong appeal of quality IP, and the cultivation of paid habits through "fan culture." In recent years, more and more IP holders have entered the market, improving the chain from the development to sales of IP cards. Additionally, as cards combine attributes of collection, social interaction, investment, and competition, the activity in the secondary market is increasing, which boosts the industry's popularity. With the maturity of the regulation and grading systems for secondary card trading and collection, the card market may further release value. Industry Development Trends: IP holders are deepening their vertical layout and product categories are expected to expand. Cards have a low threshold in the field of IP derivatives, with production cycles as short as 20-30 days, making it an efficient and fast way to materialize IP. As the visualization of IP gradually matures and the supply side becomes sufficient, a solid foundation is laid for the development of card building. Upstream IP holders are deepening their business layout in the card industry, increasing industry chain collaboration. Card manufacturers can accelerate the formation of a single IP, multi-category layout by closely cooperating with IP holders and reusing image resources. With improved offline channels and diversified online channels, cards are expected to further penetrate the mass consumer market. Risks: Intensifying market competition, policy and compliance risks, fluctuations in IP lifecycle.