Shulou(Shulou.com)11/24 Report--

On October 11, 2023, China Merchants Securities released a research report covering superstar legends (06683.HK) for the first time, with the first "overweight" rating, considering that superstar legends have unique star IP resources, two-way empowerment of IP operation and new retail, significant synergy, and its continuous expansion of product matrix in recent years is expected to create a new growth engine. It is expected that its net profit from 2023 to 2025 will be 94 million yuan, 141 million yuan and 175 million yuan, corresponding to 66.5,44.4 and 35.7 times of valuation respectively. Combined with the performance of superstar legend in the capital markets, its share price has risen significantly since August 29, up about 60% so far, at one point reaching HK $9.38, a record high, according to Wande.

In the view of China Merchants Securities, superstar Legend is an innovative new retail operator dedicated to the development and sales of new retail products and the creation and operation of IP. The creation and operation division of IP can become one of the marketing tools to promote new retail products while generating its own revenue.

In terms of star IP resources, in addition to creating a two-dimensional IP "classmate Zhou" for Jay Chou, superstar Legend has continued to create a large-flow star IP with Liu Xiehong as the core, including Wang Wanfei, Fang Wenshan, Nanquan Mom (Liang Xinyi, Zhan Yuhao, Zhang Jie), Chen Farong and other multiple IP portfolios, and entered into a memorandum of understanding with Eric's artist agency. And in the view of China Merchants Securities, the relationship between the superstar legend and the core head star IP is solid, and the 10-year and renewable 10-year IP licensing agreement between Jay Chou and Jewell Music has locked the priority of cooperation in many areas of related IP.

With its own star IP resources, superstar legend continues to expand its business areas, driving the expansion of new retail business with innovative business models. China Merchants Securities pointed out that superstar Legend's current core product is Magic Carcass Coffee, which focuses on the concept of "low-carbon diet" and bulletproof beverage, and its product marketing depends on its own IP. According to the prospectus, the broadcast of Jay Chou's Reality Show program "Journey of the week", which was co-produced by the superstar legend in 2020, boosted sales of magic carcass coffee by implanting into the program, driving the superstar legend's net profit in 2020 up 233.04% from the same period last year. Data show that superstar Legend has been the No. 1 bulletproof beverage market in China for three years in a row, based on the total merchandise trading volume from 2020 to 2022.

The report mentioned that in recent years, superstar legends have continuously enriched IP resources, created star IP diversion matrix numbers, carried out media content creation and event planning, and conducted business cooperation through e-commerce, short videos and live broadcast channels to establish a promotion platform for new retail products, with significant synergy. According to the prospectus, with the help of Liu Xianhong's influence on the live broadcast platform, superstar Legend entered the live streaming trial operation through "Liu Xianhong Fat Ka" in July 2022, relying on the linkage with Liu Xianhong and Wang Wanfei to increase the exposure of the live broadcast room and carry out the sales of their own products and the third brand products. the data show that the new product line set up by superstar legends in July 2022 loves to eat fresh Motors, with an income of 15.1 million yuan in the first half of 2023. It quickly achieved a sales record from zero to tens of millions within a year.

Obviously, the superstar legendary IP creation and operation business can not only promote new retail products, but also expand its marketing network from the initial private domain traffic based on the development of distributors and dealers to the public domain traffic based on live broadcast and goods, so as to realize global marketing. The research newspaper pointed out that the share of revenue from public domain traffic in the first half of 2023 increased significantly from 3% in the first half of 2022 to 30%.

In the future, China Merchants Securities pointed out that in 2023-25, superstar legend plans to launch no less than 30 new food and beverage products and 30 new products. Among them, the superstar legend plans to invest 24.5 million yuan of the global sales proceeds into food and beverage product research and development, nearly 21.5 million yuan into product research and development, and continue to increase the product matrix.

It is understood that nearly a month, Puyin International, Minyin Securities also issued the first coverage of superstar legends research reports, and are given a "buy" rating.

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