Over the past few decades, rubber ducklings have become a symbol of childhood memories in family bathtubs. A ship accident in 1992 added a legendary color to the duckling.

On January 10, 1992, a container full of yellow rubber ducklings fell into the sea under strong winds and waves after a cargo ship was caught in a storm on its way from China to Washington, USA. At this point, 29,000 ducklings embarked on a journey around the world halfway around the world.

Curtis Ebersmeyer, an American oceanographer, tracked and studied this. In the more than a decade after the "rafting incident," the rubber duckling traveled through Alaska, Japan, Hawaii, Canada, Iceland, and across the Arctic. It reached the shipwreck site of the Titanic and drifted to the coasts of Britain and Ireland in 2007.

According to Zhitong Financial APP, in 1948, the first domestic plastic duckling was born on the production line of Yongxin plastic Factory founded by Hong Kong businessman Lin Liang, which was the predecessor of the nearly 30, 000 drifting ducklings. Since then, Lin Liang also founded the original IP of LT DUCK duckling, which has become a well-known IP brand in cooperation with HSBC and Chow Tai Fook Jewellery.

In fact, Lin Liang is not alone in focusing on the operation of the duckling image IP. In 2005, the B.Duck duckling, created by Hong Kong designer Eddie (Xu Xialin), supported another business system. On Nov. 5, the role intellectual property company, which has grown by operating B.Duck, once again submitted its application for listing on the main board to the Hong Kong Stock Exchange.

Diversified operation of a single role

As an IP operator, the role of B.Duck is the core of Deying Holdings' current business. Among them, the company's history can be traced back to the Senke products founded by Xu Xialin in 2001, and after the birth of B.Duck in 2005, the company officially launched the role management business.

Up to now, Deying Holdings has been operating the role of B.Duck for 15 years. According to Frost Sullivan, Deying Holdings ranks fifth among all domestic role intellectual property companies in terms of role licensing revenue in 2020, with a market share of about 2.4%. In terms of sales in 2020, the e-commerce market share of role intellectual property products in China is about 0.6%.

It is understood that the earliest product launched by the B.Duck brand is a duck-shaped bathroom waterproof radio, which is popular in Japan and Europe. After that, the B.Duck duckling image has also been used in different product categories such as home, kitchen, stationery, electronics and so on.

From 2005 to now, Deying Holdings is still dominated by the role of the B.Duck family, and through the role of the family for brand management and marketing in multiple channels. In addition to B.Duck, the company has also launched Buffy, B.Duck Baby, Dong Duck, Bath'N Duck and other family role images, forming today's diversified operation pattern of a single role.

In addition, the company also plans to launch other new reserve roles such as Buffy friends Butter, Mocha, Cream, Moses and DaDa in the future to promote the formal transformation of the company's role portfolio to diversification.

Specifically, the role authorization of the B.Duck family of Deying Holdings is mainly divided into five types: commodity authorization, live entertainment authorization, content and media authorization, promotion authorization and design consulting.

Specifically, the third-party products authorized by the company's commodity licensing business can be divided into six categories: 1. Household necessities; 2. Clothing and accessories; 3. Toys and personal care of infants and young children; 4. Shoes; 5. Consumer electronic products; 6. Others.

In addition, the company's real-scene entertainment authorization business mainly focuses on the development of theme park attractions, catering, promotion and marketing activities. For example, Tak Ying Holdings has partnered with Nanjing overseas Chinese Town to open a B.Duck-themed amusement park, which opened in 2020, and B.Duck family characters have also partnered with dim sum restaurants, food and beverage merchants, teahouses, cafes and other catering entities.

Of course, the way an IP operates is not limited to that. In addition to the above major authorization methods, Tak Ying Holdings also cooperates with offline partners to expand the operation of the B.Duck brand. For example, the company has issued credit cards with B.Duck image with Everbright Bank.

The gross profit margin of IP e-commerce reaches 50%.

For brands, the fan base and fan circle ability of a high-quality IP can bring a strong boost to its sales growth. At the same time, in the process of spreading the brand with goods as the carrier, it also contributes to the further increase of the fan base of IP, thus enhancing the influence of IP.

In the business model of Deying Holdings, in addition to role authorization, the company also carries out e-commerce and other businesses of its own B.Duck family role retail products through design, development and procurement.

According to Zhitong Financial APP, in 2015, Deying Holdings officially opened its first online flagship store in Tmall. After that, the company has also expanded its channels to e-commerce platforms such as JD.com, Vipshop Holdings Limited and HKTVmall.

In 2018-2020, the first six months of 2020, and the first six months of 2021, the company's gross profit margins on e-commerce and other businesses reached 49.4%, 53.4%, 59.5%, 59.1% and 57.3%, respectively. As of June 30, 2021, the company has provided more than 7400 SKU for this business.

After nearly five years of development, the company's e-commerce business has surpassed its role-authorized industry and become the main business sector of the current source of income.

In terms of overall performance, the company achieved revenue of HK $201 million, HK $243 million, HK $234 million, HK $93 million and HK $124 million respectively in 2018-2020, the first six months of 2020 and the first six months of 2021. Net profit reached HK $9.862 million, HK $24.102 million, HK $54.548 million, HK $14.225 million and HK $17.461 million, respectively. The realized net interest rates were 4.9%, 9.9%, 23.4%, 15.3% and 14.1%, respectively.

From the perspective of cost composition, as Deying Holdings is a typical intellectual property company and carries out its own e-commerce business, its cost side mainly takes the cost of inventory sold and employee welfare expenses as the main expenditure link of the company.

Among them, in 2018-2020, the first six months of 2020 and the first six months of 2021, the cost of inventory sold, which is composed of inventory cost and inventory impairment provision for e-commerce business, accounted for 34.54%, 30.92%, 23.51%, 27.13% and 22.35%, respectively. Employee welfare expenditure composed of salaries, allowances and other employee benefits accounted for 21.34%, 21.06%, 18.13%, 21.43% and 24.12%, respectively.

It is worth noting that according to the company's current pricing strategy, it is usually priced by adding a profit margin on the basis of the purchase cost of the goods. However, at the practical level, if the procurement cost rises, if the company can not fully follow the cost adjustment price to achieve transfer, it will face the risk of profit margin fluctuations.

In terms of market, mainland China and Hong Kong have always been the main markets of the company, accounting for more than 98% of the company's total revenue. Among them, the mainland market accounts for the majority of the company's income, with more than 90% of its income coming from the mainland.

According to Frost Sullivan, from 2016 to 2020, retail sales of role licensed goods in mainland China and Hong Kong increased from HK $39.3 billion to HK $40.4 billion, with a compound annual growth rate of about 0.7%. The figure given by Frost Sullivan is that retail sales of role intellectual property licensed goods will grow rapidly at a compound annual growth rate of 7.6 per cent from 2021 to 2025. Its judgment is based on the continuous improvement of the creative ability of domestic intellectual property rights and the enhancement of consumers' awareness of intellectual property protection.

In addition, Frost Sullivan also predicted that in view of the impact of the epidemic on the consumer goods market as a whole, the retail market in Hong Kong, China is recovering as the vaccination rate increases and the spread of the epidemic is gradually under control. Hong Kong's role-licensed goods market is also expected to recover at a relatively slow pace.