MINISO initiates spin-off: TOP TOY "goes solo" to test its strength

“The MINISO-affiliated” trendy toy player steps onto the spotlight of the capital market. Recently, TOP TOY, the trendy toy brand under MINISO, submitted its IPO prospectus to the Hong Kong Stock Exchange, planning to raise about $300 million, with J.P. Morgan, UBS, and CITIC Securities serving as joint sponsors. TOP TOY’s growth trajectory is closely intertwined with the capitalization process of China’s trendy toy industry. Five years ago, the brand was born during the market frenzy triggered by Pop Mart’s IPO. Now, as Pop Mart rebounds to growth after market cap corrections and trendy toy IP storytelling returns to the spotlight, TOP TOY has taken a key step towards independent listing. Backed by MINISO’s resources, TOP TOY has become the largest, fastest-growing, and most self-developed product-oriented trendy toy collection brand in China. In 2024, its mainland GMV surpassed 2.4 billion yuan. By the end of September 2025, TOP TOY’s store count reached 299, with business expanding to overseas markets such as Thailand and Japan, and products spanning categories like figures, 3D model kits, and sofubi plush. Before submitting the application, TOP TOY completed a Series A financing led by Temasek, with a post-investment valuation of $1.3 billion, becoming yet another trendy toy company entering the "10 billion RMB valuation club". TOP TOY’s push into the Hong Kong stock market comes as its parent MINISO accelerates its North American expansion and announces a major increase in proprietary IP strategies. Against this backdrop, a more sharply defined question emerges: The IP conundrum that MINISO has yet to fully resolve for TOP TOY — can TOP TOY, in turn, help the parent company achieve a strategic breakthrough in the trendy toy sector? Cost of Channel Advantage As MINISO’s extension into the trendy toy sector, TOP TOY has largely inherited the parent’s store-opening prowess. TOP TOY has adopted MINISO’s “quasi-direct management” partner model, with partners responsible for investment and operating expenses, while headquarters controls product selection, pricing, and full-process operations. This asset-light model, coupled with MINISO’s endorsement, has jointly driven TOP TOY’s rapid scale-up. In 2024, as offline consumption recovers, TOP TOY added over a hundred new stores, revenue increased 16.8% year-on-year to 1.9 billion yuan, and profit grew nearly 40% to 294 million yuan. By the end of June 2025, among TOP TOY’s 293 stores, partner stores accounted for as much as 85%. However, TOP TOY’s core channel support and revenue source are still highly dependent on MINISO. As a trendy toy supplier, TOP TOY’s sales to MINISO account for nearly 50% annually, meaning its products effectively reach the market via MINISO’s thousands of stores. MINISO’s acquisition of Yonghui Superstores, becoming its largest shareholder, also leaves room for imagination on future channel expansion for TOP TOY. TOP TOY founder and CEO Sun Yuanwen once stated that the revamped Yonghui Superstores may serve as a channel window for the company’s proprietary products, mainly including brick toys and blind boxes. The leverage effect of a massive channel network on sales growth is proven. During the market boom of sofubi plush, TOP TOY quickly capitalized on its wide reach to capture category dividends. In the first half of 2025, revenue from sofubi plush reached 146 million yuan, 2.3 times that of the whole year 2024. TOP TOY continues to strengthen its core channel advantage. Over the next five years, TOP TOY plans to cover the core business districts of 100 countries worldwide, open 1,000 stores, and jointly establish the "China Trendy Toy Going Overseas Alliance" with upstream and downstream industry partners. Like MINISO’s aggressive push into North America, TOP TOY’s overseas business is also in a period of strategic investment. In the first half of 2025, TOP TOY’s selling expenses doubled year-on-year to 160 million yuan. This growth mainly comes from additional sales and R&D team investments to expand overseas markets, along with higher international logistics, warehousing, and service costs. Expansion of directly operated stores also significantly increased depreciation and amortization expenses. Rapid expansion has also brought multidimensional operational challenges. From 2023 to 2024, TOP TOY’s inventory turnover days, in preparation for overseas markets, increased from 38.1 to 50.5 days. The average customer transaction dropped from 121.3 yuan to 109.5 yuan; average product unit price fell from 63.3 yuan to 57.8 yuan, both down 10%, bringing same-store GMV growth down from a high of more than 45% to single-digit levels. By the first half of 2025, TOP TOY’s expansion pace had clearly slowed, with fewer than 20 new stores opened. “Not Completely” Separate In Ye Guofu’s business empire, TOP TOY is seen as MINISO’s extension into the “trendy toys” segment. MINISO once stated publicly that MINISO extended from general merchandise to the trendy toy field, while TOP TOY focuses on the professional trendy toy track, with the two differing in positioning, product type, and customer price. According to the latest prospectus, MINISO and TOP TOY have completed a business restructuring, clarifying trendy toy business boundaries. From August 31 onward, R&D for trendy toy products is unified under TOP TOY, and MINISO will license its proprietary “Penpen” and “Dundun” IPs to TOP TOY for development, charging royalties based on sales. Important changes have also been made to IP licensing collaborations— Compared with past practices of jointly licensing home goods and some trendy toys, now when the original agreements expire and renew, TOP TOY will directly sign independent trendy toy licenses with IP owners, while MINISO will keep only home goods license renewals. For TOP TOY, about 95% of relevant revenue-linked IP agreements will expire collectively in 2025 and 2026. This also means that TOP TOY may face rising IP licensing fees and thereby increased costs in the future. In 2024, MINISO’s licensing fee expenditure was 421 million yuan, accounting for 2.48% of total revenue. By comparison, TOP TOY’s licensing fees were just 32.78 million yuan, with a 0.75 percentage point lower rate than its parent. In the future, TOP TOY will continue to leverage MINISO’s extensive distribution network for sales and supply both its own and third-party trendy toys as a supplier. For any new toys that meet the “trendy toy” definition in the future, TOP TOY will have the right of first refusal or priority to cooperate. MINISO’s status as TOP TOY’s biggest channel and customer remains solid for now. But with the expansion of partner stores, the sales share via MINISO channels has dropped from 53.5% in 2023 to 48.3% in 2024, and in the first half of 2025, reached 45.5%. TOP TOY expects that in the next three years, its revenue contribution from MINISO will keep declining, falling below 40% by 2028. According to the product supply framework agreement, between 2025 and 2027, the proposed maximum transaction amounts MINISO will pay TOP TOY are 1.66 billion, 2.29 billion, and 2.84 billion yuan respectively. In terms of equity structure, MINISO founder and actual controller Ye Guofu still holds 63.5% of TOP TOY. Therefore, even after the spin-off and listing, TOP TOY’s strategic development and business direction may still largely center around MINISO’s overall layout and needs. IP Barriers Yet to Be Tested Without comprehensive support from MINISO, TOP TOY would likely find it hard to achieve such rapid growth. But the key gap between TOP TOY and leading players in the trendy toy sector is precisely where MINISO also struggles—the lack of proprietary IP. In 2024, income from TOP TOY’s own IPs was only 6.8 million yuan, making up just 0.36% of overall revenue. In the first half of 2025, proprietary IP revenue was still only 6.1 million yuan, less than one percent of licensed IP revenue. A few months ago, TOP TOY acquired several IPs, such as “Nuomier,” via strategic investments in an effort to quickly close its IP gap. The much-anticipated Nuomier line achieved total GMV of around 50 million yuan since 2024; the self-developed “Great Fortune Beckons” line reached 35 million yuan over three and a half years. Despite these moves, the overall influence and commercial value of its proprietary IP remain limited. At present, TOP TOY still heavily relies on licensing collaboration with global top IPs such as Sanrio, Disney, and Crayon Shin-chan. In this model, TOP TOY obtains permission to use these IPs and develops and produces products under its own brand. In 2024, its top five IPs contributed 40% of revenue. Moreover, over half of TOP TOY’s income comes from externally purchased finished products. In 2024, its external IP product revenue accounted for 50.9% and involved more than 600 IPs. Relatively relying on external sourcing is reasonable for TOP TOY at this stage. In the current boom of trendy toy IPs and rapid trend shifts, TOP TOY, as a leading collection channel, is very attractive to many mid- and lower-tier IPs, enabling it to quickly respond to market trends at low cost and realize stable sales margins through its channel advantage. At the same time, the external sourcing model helps the brand accumulate market data and user insights, providing vital reference for future self-developed product creation. However, channels alone cannot form a real competitive barrier—the core competitiveness of the trendy toy industry ultimately comes down to the cultivation and operation of IP. Whether consumers attracted by external IPs can be effectively converted into loyal users of proprietary IPs remains highly uncertain. The strength of proprietary IPs not only determines a brand’s voice and status in the industry chain but also directly affects its profitability ceiling and long-term competitive moat. For example, Pop Mart’s 70% gross margin rivals that of luxury brands, and the combined self-owned and licensed IP model brings 52TOYS nearly 40% gross margin, but TOP TOY’s gross margin is only 32%. To achieve a true breakthrough on the trendy toy track, IP independence is a strategic threshold TOP TOY must cross. TOP TOY’s proprietary IP lineup is rapidly expanding. In the first half of the year, TOP TOY spent 5.1 million yuan for a 51% stake in the trendy toy company HiTOY Haichuang Culture, acquiring core IPs such as “Nuomier Nommi,” “Honey Sweetheart,” and “Mei Mei.” Before submitting its IPO prospectus in August, TOP TOY acquired multiple IPs including “Ninimo,” expanding its own IPs from 8 at the end of June to 17. Whether it can leverage its channel advantage to successfully incubate IPs with lasting value remains the key question for TOP TOY. Risk Disclosure and Disclaimer The market has risks, investment requires caution. This article does not constitute personal investment advice and does not take into account individual investors’ special investment objectives, financial circumstances, or needs. Readers should weigh whether any opinions, views, or conclusions expressed herein fit their particular situation. Those investing accordingly do so at their own risk.