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                                INDUSTRY OVERVIEW

       The information and statistics set out in this section and other sections of this
  Document were extracted from different official government publications,
  available sources from public market research and other sources from
  independent suppliers. In addition, we engaged Frost & Sullivan in preparing the
  Frost & Sullivan Report, an independent industry report in respect of the
  [REDACTED]. We believe that the sources of the information in this section and
  other sections of this Document are appropriate sources for such information, and
  we have taken reasonable care in extracting and reproducing such information.
  We have no reason to believe that such information is false or misleading or that
  any fact has been omitted that would render such information false or misleading.
  The information from official and non-official sources has not been independently
  verified by us, the [REDACTED], Joint Sponsors, [REDACTED], [REDACTED],
  any of the [REDACTED], any of their respective directors and advisers, or any
  other persons or parties involved in the [REDACTED] (excluding Frost & Sullivan),
  and no representation is given as to its accuracy. Accordingly, the information from
  official and non-official sources contained herein may not be accurate and should
  not be unduly relied upon. Our Directors confirm that, after making reasonable
  enquiries, there is no adverse change in the market information since the date of
  the Frost & Sullivan Report that would qualify, contradict or have a material impact
  on the information in this section.

SOURCES OF INDUSTRY INFORMATION

     We commissioned Frost & Sullivan, an independent market research consulting
firm which is principally engaged in the provision of market research consultancy
services, to conduct a detailed analysis of the PRC pop toy market. During the
preparation of the Frost & Sullivan Report, Frost & Sullivan performed both primary
and secondary research, and obtained knowledge, statistics, information and industry
insights on the industry trends of the PRC pop toy market. Primary research involved
discussing the status of the industry with leading industry participants and industry
experts. Secondary research involved reviewing annual reports of companies,
independent research reports and Frost & Sullivan’s proprietary database. The Frost
& Sullivan Report was compiled based on the following assumptions: (1) China’s
social, economic and political environment is likely to remain stable in the forecast
period; and (2) the related industry key drivers are likely to drive the market in the
forecast period. As part of the preparation of the Frost & Sullivan Report, we also
commissioned Frost & Sullivan to conduct street interceptions and digital
questionnaire and face to face interviews with 1,200 randomly selected participants in
the PRC to better understand the product preferences and pop toy market from a
consumer’s perspective (the “Survey”).

     Frost & Sullivan is an independent global consulting firm, which was founded in
New York in 1961. It offers industry research and market strategies, and provides
growth consulting and corporate training. We have contracted to pay a fee of
RMB600,000 to Frost & Sullivan in connection with the preparation of the Frost &
Sullivan Report. We have extracted certain information from the Frost & Sullivan
Report in this section, as well as in the sections headed “Summary,” “Risk Factors,”
“Business,” “Financial Information” and elsewhere in this document to provide our
potential [REDACTED] with a more comprehensive presentation of the industry in
which we operate.

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OVERVIEW AND OUTLOOK OF CHINA’S PAN-ENTERTAINMENT MARKET

     China’s pan-entertainment market currently comprises three sectors: (i) digital
entertainment, (ii) physical merchandise, including, among others, pop toys (as
defined below), and (iii) offline activity. According to the Frost & Sullivan Report,
China’s pan-entertainment market has enjoyed rapid expansion in recent years. The
market size of China’s pan-entertainment industry, as measured by retail value, grew
from RMB527.7 billion in 2015 to RMB916.6 billion in 2019, representing a CAGR of
14.8%. Furthermore, China’s pan-entertainment market still has tremendous potential
for further growth. Driven by the rising disposable income and consumption
willingness, increasing high-quality pop content and growing demands for
pan-entertainment products and services, the market size of China’s
pan-entertainment industry is expected to further grow to RMB1,780.7 billion in 2024,
representing a CAGR of 14.2% from 2019.

      Pop culture, which encompasses a wide variety of things that people can be fans
of, has become increasingly important in everyday life. Physical merchandises
endorsed by pop culture or content serve as an accessible way for fans to express
their affection and affinity for such culture and content. The physical merchandise
sector has been the fastest growing sector under China’s booming pan-entertainment
industry, according to the Frost & Sullivan Report. The market size of the physical
merchandise sector increased from RMB14.6 billion in 2015 to RMB32.5 billion in
2019, representing a CAGR of 22.1%, and is expected to further increase to RMB92.6
billion in 2024, representing a CAGR of 23.3% from 2019.

    The following chart illustrates the historical and expected market size of China’s
pan-entertainment industry as measured by retail value:

                Market Size of China’s Pan-entertainment Industry, by Retail Value, 2015-2024E
     Billion RMB     Digital Entertainment       Physical Merchandise       Offline Activity
                                             2015-2019 CAGR    2019-2024E CAGR                                             1,780.7
                            Total                14.8%                  14.2%                                    1,584.6
                   Digital Entertainment         16.3%                  15.0%
                   Physical Merchandise          22.1%                  23.3%                          1,391.5
                      Offline Activity           10.3%                  10.0%              1,204.8
                                                                                                                           1,320.0
                                                              916.6         964.8                                1,183.1
                                                 799.8                                                 1,050.3
                                   716.5                                                       919.3
                     615.4
       527.7                                                  655.6             795.0
                                                 569.4
                                   503.8
                     423.3                                                                                                  92.6
        358.5                                                                                                     77.3
                                                                                                        62.9
                                                              32.5                             49.7
                      17.3          20.8          24.9                                                                      368.1
           14.6                                                                 35.1                    278.3     324.2
      154.6          174.8         191.9         205.5        228.5                            235.8
                                                                           134.7
       2015          2016          2017          2018         2019          2020E          2021E       2022E     2023E     2024E

     Notes:

     (1)     Digital entertainment primarily includes digital games, online films, online animations and live
             streaming.

     (2)     Physical merchandise primarily includes pop toys and leisure books.

     (3)     Offline activity primarily includes movies, internet café and theme parks.

     Source: Frost & Sullivan, China Game Industry Governance Committee, Internet Access Service
             Association of China, China Film Administration

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POP TOY MARKET
Overview
     Pop toys, an industry term according to the Frost & Sullivan Report, refer to toys
infused with pop culture and trendy content, serving as a subtle blend of the both. Pop
toys cover a wide variety of product categories, including, among others, blind boxes,
action figures, garage kits and adult-oriented assembled toys. Pop toys are different
from traditional toys in various aspects: (i) while traditional toys are designed based
on common images, such as birds, cars and flowers, and for functional use like
training coordination and sense stimulation, pop toys typically feature distinct designs
and aesthetics, in many cases originating from licensed pop content, such as movie,
animation, cartoon and game characters, making it good fit for display and collection
beyond mere functional use, (ii) while traditional toys are primarily for children to play
with, pop toys target young adults between 15 years old and 40 years old in general,
who seek for emotional value from expressing personality and attitude and sharing a
passion with others, and (iii) while traditional toys are mainly sold in mass volume with
very limited or none collection value, pop toys are sometimes sold in limited editions,
having certain collection value.
     Pop toys are usually designed based on cultural and entertainment IPs, which
can bring an immersive experience to customers around the original content and
artwork. Pop toy IPs can be created by talented artists, or licensed from movies,
animations, games or other sources of content. Cross-over collaboration among
multiple IPs also plays a significant role in pop toy IP development. The popularity of
IPs and widely-appealing design embedded in pop toys attract both adults and
children, thus bringing satisfaction to collect and sometimes high value to resell,
particularly for limited editions. Artists are able to express their feelings and attitudes
in their work of pop toy products and pass on to fans. As an embodiment of contents
and artistic expression, pop toys often establish a positive emotional connection with
fans. According to the Survey, 53.3% of existing and potential customers regard
creative styling as the main reason to buy or consider buying pop toys.
Global Pop Toy Retailing Market
     According to the Frost & Sullivan Report, driven by the increase of disposable
income, rapid growth of the pop culture industry, particularly the successful incubation
of more high-quality IPs in the market, the market size of pop toy retailing globally
increased from US$8.7 billion in 2015 to US$19.8 billion in 2019 at a CAGR of 22.8%,
and is expected to reach US$41.8 billion in 2024, representing a CAGR of 16.1% from
2019. The following chart illustrates the historical and expected market size of global
pop toy market as measured by retail value:

                       Market Size of Pop Toys by Retail Value (Globe), 2015-2024E

   USD Billion

                       2015-2019           2019-2024E                                          41.8
                         22.8%               16.1%                                     36.6
                                                                               31.2
                                                                       25.9
                                                     19.8      20.3
                                            15.0
                                   11.9
                        10.0
                 8.7

             2015       2016       2017     2018     2019      2020E   2021E   2022E   2023E   2024E

     Source: Frost & Sullivan, The Toy Association, Licensing International Merchandises Association

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China’s Pop Toy Retailing Market

     China’s pop toy retailing market is still at an early stage and has witnessed a
rapid growth in the past few years, according to the Frost & Sullivan Report. The
market size of pop toy retailing in China increased from RMB6.3 billion in 2015 to
RMB20.7 billion in 2019, representing a CAGR of 34.6%. Driven by continuously
increasing popularity of pop toys in China, the market size of pop toy retailing is
expected to reach RMB76.3 billion in 2024, representing a CAGR of 29.8% from 2019.
The market size of China’s pop toy retailing market in terms of retail value as a
percentage of China’s pan-entertainment market increased from 1.2% in 2015 to 2.3%
in 2019, and is expected to further increase to 4.3% in 2024, according to the Frost &
Sullivan Report. The following chart illustrates the historical and expected market size
of China’s pop toy market as measured by retail value:

                             Market Size of Pop Toys by Retail Value (China), 2015-2024E
         RMB Billion
                              2015-2019      2019-2024E
                                                                                               76.3
                               34.6%              29.8%
                                                                                       62.1

                                                                               48.7

                                                                       36.6

                                                     20.7       22.9

                                  10.8     14.0
           6.3         8.2

          2015         2016       2017     2018      2019   2020E      2021E   2022E   2023E   2024E

     Source: Frost & Sullivan, The Toy Association, Licensing International Merchandises Association

     According to the Frost & Sullivan Report, the market size of China’s pop toy
retailing is expected to increase at a CAGR of 29.8% from 2019 to 2024 on the
following basis:

     •      Demographic character of target consumers: Pop toy’s target consumers,
            the young generation aged between 15 and 40 years old, accounting for over
            35% of total population. They have shown a strong desire for self-expression
            and individuality, and are willing to spend more for emotional satisfaction.

     •      Stepping up of lower-tier cities: Favorable demographic, rapid income
            growth, improved accessibility and low penetration are releasing pent-up
            demand in China’s lower-tier cities. Similar to the emerging sectors like live
            streaming, e-commerce and online games, the consumption upgrade in
            lower-tier cities would be a key driving force of the pop toy market in China.

     •      Optimistic future plan and forecast by leading players: According to market
            interviews conducted by Frost & Sullivan, major leading pop toy market
            players are expecting to grow more than 40% over the next five years. These
            players were actively adopt IP content to establish pop toy lines, and have
            already witnessed an increasing portion of pop toys among their product
            lines in China.

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     •        Early industry stage: China’s pop toy market is still at an early stage and
              achieved a high growth of 34.6% CAGR from 2015 to 2019 by retail value.
              With growing demands for pop toys, it is expected that the momentum of pop
              toy market continues to grow. In addition, according to the Frost & Sullivan
              Report, from an industry cycle perspective, emerging markets typically have
              a continue growing momentum for over ten years.

     The value chain of pop toy retailing market in China includes IP sourcing, IP
operation, production and consumer access. Pop toy companies seek to collaborate
with artists and establish IP providers to source high-quality IPs. Leading pop toy
companies generally have strong IP operation and product development capabilities
to commercialize such IPs. Therefore, leading pop toy retailing players are more likely
to obtain high-quality IPs from artists and IP providers to enhance exposure and
maximize the commercial value of their IPs. Consumer access refers to the various
sales and distribution channels, including both online and offline. As compared to
third-party distribution channels, leading players strive to build self-operated channels
to promote brand image, increase brand exposure, enhance control and improve
operational efficiency. The following diagram illustrates the value chain of pop toy
retailing market in China:

                                                        Industry Value Chain

         IP Sourcing                 IP Operation               Production       Consumer Access

          Individual                Product Design           Industrial Design   Offline Platforms
            Artist                 and Development
                                                                                 • Retail Stores
              IP                                                 Modeling        • Vending Machines
         Design Studio                   IP Licensing                            • Convention

                                                              Manufacturing      Online Platforms
      Established IP
                                         IP Creation                             • PC Retail Platform
         Provider                                               Packaging        • Mobile APP

                       Artist Agency /
                          IP Agency

      For successful and popular IPs that have been released in earlier years and
recognized by the market, they have presented a long-life cycle of around 30 years.
For example, Bearbrick (rendered Be@rbrick), designed and produced by the
Japanese company MediCom Toy Incorporated, was firstly released in May 2001 and
has succeed in releasing forty series until now. Another example, KAWS, made the
first toy in 1999, Companion, a vinyl figure of Mickey Mouse with x-ed out eyes and
has released many co-branded products with other fashion companies during the past
20 years.

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Pop Toy Fans in China

     A young, well-educated and culturally proficient generation between the ages of
15 and 40 are the main target customers of the pop toy industry. Amid the
fast-evolving Chinese society, the young generation has much more exposure to
diverse cultures, modern lifestyles and rich information. They have shown a strong
desire for self-expression and individuality, and are willing to channel their spending
power towards emotional satisfaction. Pop toy fans are also enthusiastic to share their
feelings and preferences through social media, as part of the communities of people
with the same interests. According to the Survey, more than 95% of pop toy
consumers are between the ages of 15 and 40, 63% of whom hold bachelor degrees or
above.

     Overtime, many pop toy customers evolve from occasional buyers to regular
purchasers, who are recognized as enthusiasts or fans. They demonstrate loyalty to
pop toys through repeated purchases and can accept higher retail prices. According to
the Survey, 68.5% of pop toy customers made more than one purchase in 2019, 19.8%
among whom purchased more than five times; 68.9% of the pop toy customers made
a purchase in the last six months preceding the Survey; and 27.6% of the pop toy
customers are willing to pay more than RMB500 for a pop toy they like.

Key Growth Drivers of China’s Pop Toy Retailing Market

     According to the Frost & Sullivan Report, the key growth drivers of China’s pop
toy retailing market include:

     •    Dedicated and Growing Fan Base. Pop toys are infused with pop culture
          content well-known among consumers. With stylish design and aesthetic
          value, pop toys can be owned for display, collection or exchange. Pop toys
          often offer a sense of joy and companionship that bring consumers relief and
          comfort, and fans can express their unique lifestyle and social standing by
          purchasing different pop toys. With an expanding and dedicated fan base,
          China’s pop toy retailing are experiencing rapid growth.

     •    From Niche to the Mainstream. In the past, the pop toy market was
          featured as a niche market due to limited cultural acceptance, awareness
          and high price. In recent years, amid the backdrop of encouraging diversity
          and personality, people around the world become more open and passionate
          about various forms of previously-niche pop culture. In the meantime, social
          media facilitates such trend as people increasingly engage with the content
          and their social communities to show affinity for such content. In addition,
          product design, such as the “blind box,” and industry players’ expanding
          distribution networks make pop toys more desirable, affordable and
          accessible to fans, further bringing the pop toy market into the mainstream.

     •    Increasing Release of Blockbuster IPs. In line with the development of
          China’s pan-entertainment market, increasing number of blockbuster IPs
          have been released and promoted, which in turn leads to higher demand for
          pop toys developed based on such blockbuster IPs. High-quality content and
          IPs also create opportunities for cross-over collaborations to attract more
          fans.

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      •      Growing Disposable Income and Consumption Power. The cumulative
             effect of decades of rising disposable income and living standards has
             resulted in seismic changes in general consumption patterns in China.
             Chinese consumers are pursuing a more sophisticated lifestyle and are
             increasingly focused on the quality of goods and the emotional satisfaction
             they bring, which increases purchases of pop toys.

Competitive Landscape of China’s Pop Toy Retailing Market

     In 2019, there were hundreds of players in China’s pop toy retailing market,
according to the Frost & Sullivan Report. In 2019, the top five market players had
market shares of 8.5%, 7.7%, 3.3%, 1.7% and 1.6%, respectively, in China’s pop toy
retailing market in terms of retail value. Players in the pop toy retailing industry include
both traditional toy companies who have expanded their product coverage into pop
toys, and emerging pop toy companies who have been focusing on pop toy product
lines. Top pop toy retailing market players other than Pop Mart are primarily
multinational toy production companies focusing on IP development and licensing.
The following chart sets forth the top five pop toy retailing market players in China in
terms of retail value in 2019:

                                     Competitive Landscape of Pop Toy Companies, by Retail Value (China) 2019

                                                         CAGR
Ranking        RMB Million                           (2017 to 2019)                           Background                                          IPs Operated

  1       Pop Mart                           1,757      226.3%         A pop toy company based in China with an integrated               93 IPs, including 12 proprietary
                                                                       platform covering the entire industry chain of pop toys,          IPs, 25 exclusive licensed IPs and
                                                                       including artists development, IP operation, consumer             56 non-exclusive licensed IPs
                                                                       access and pop toy culture promotion.

  2       Company A                        1,602         47.6%         A multinational toy production company based in Europe. Its       approximately 28 licensed IPs
                                                                       featured toys consist mostly of interlocking plastic bricks. It
                                                                       also operates several amusement parks and numerous retail
                                                                       stores across the world.

  3       Company B            675                       33.1%         A Hong Kong based multinational production house for              approximately 80 licensed IPs
                                                                       designing, developing, and manufacturing highly detailed
                                                                       collectible toys or action figures to worldwide markets.

  4       Company C      359                             13.4%         A leading listed entertainment company based in Japan with        approximately 18 proprietary IPs
                                                                       significant present in toy development, production and sales.     and one licensed IP
                                                                       It has many popular IPs from cartoons and video games.

  5       Company D      338                             -12.6%        A listed multinational toy and board game company based in        approximately 90 proprietary IPs
                                                                       the United States. It has many famous brands of toy and           and nine licensed IPs
                                                                       other products based on IPs from movies and comics.

      Source: Frost & Sullivan

     Pop Mart is the largest pop toy brand in China in terms of retail value in 2019 with
a market share of 8.5%, and has experienced rapid growth with a CAGR of 226.3%
from 2017 to 2019, outpacing all other major players. The reasons for the growth rate
of Pop Mart outpacing other major players include: (i) the retail value of Pop Mart in
2017 is much lower than that of other major players which have longer operating
history and larger scale in 2017, and the retail value of Pop Mart and the other four
major players in 2017 amounted to RMB165 million, RMB736 million, RMB381 million,
RMB279 million and RMB442 million respectively, according to the Frost & Sullivan
Report, (ii) blind boxes are the major product category of Pop Mart, which have a
much higher growth rate, which had a CAGR of 143.2% from 2015 to 2019, than other
pop toy product types, which had a CAGR of 29.7% during the same periods, due to its
interactive purchase experience and increasing popularity, (iii) the fast-growing

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                                INDUSTRY OVERVIEW

popularity of the IPs operated by Pop Mart, and (iv) its enhanced brand awareness
through hosting pop toy conventions and other pop toy events. During Tmall’s 2019
Singles Day shopping festival, Pop Mart ranked first among flagship stores of toy
brands on Tmall in terms of retail value. Among the top players in China’s pop toy
industry, Pop Mart is the only one with an integrated platform covering the industry
chain, including IP operation, OEM production, consumer access and pop toy culture
promotion. Notably, in 2017, 2018 and 2019 and the six months ended June 30, 2020,
an increasing portion of Pop Mart’s revenue is generated from sales of products
developed based on IPs under its non-exclusive licensed agreements with IP
providers. According to the Frost & Sullivan Report, established IP providers may
license their famous IPs to various market players on non-exclusive basis to
potentially maximize return and mitigate risk. This leads to the situation of relatively
low entry barrier for market players to obtain the licensing rights of IPs and design and
sell products developed based on the same non-exclusive licensed IPs, resulting in
more competition in China’s pop toy retailing market.

Entry Barriers of China’s Pop Toy Retailing Market

     According to the Frost & Sullivan Report, the entry barriers of China’s pop toy
retailing market include:

     •    Leading Pop Content Resources. Pop toy companies need to regularly
          launch new and distinct products to capture ever-evolving consumer
          demand. Therefore, the ability to capture high-quality pop content, which is
          often limited, is crucial to success. Leveraging extensive industry
          connections, established distribution channels and strong IP development
          and operation capabilities, leading market players are better positioned to
          secure best-in-class pop content and enjoy stronger bargaining power in the
          process.

     •    Strong IP Development and Operating Capabilities. A successful pop toy
          company shall serve as the nexus between content providers and retail
          consumers. On the one hand, it is able to identify or incubate outstanding
          artists and high-quality pop content, for which a solid database and fan base
          would be a prerequisite. On the other hand, it needs to accurately
          understand and anticipate consumers’ preference, and is capable of tailoring
          the original IPs coupled with optimal pricing and marketing strategy for
          commercialization.

     •    Omni-channel Network with Operation Excellence. As sales channels
          become increasingly fragmented, pop toy companies need to establish
          omni-channel sales and distribution network at scale and ensure efficient
          supply chain management, while taking full consideration of product
          features, consumer needs and coordination with business partners to deliver
          a consistent, smooth and joyful shopping experience.

     •    Highly Recognized Brand Name. Reputable brand image is critical in
          attracting consumers and business partners. Establishing a brand name and
          executing effective promotion require solid track record, consumer insights
          and marketing investments.

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Competitive Landscape of Pop Toy Retailing Markets in Japan, Singapore and
Korea

      Japan, Korea and Singapore are the main pop toy retailing markets in Asia other
than China. The animation culture in Japan, K-pop culture in Korea and the
multi-cultural circumstances in Singapore accelerate the sweeping of the pop toy into
these markets, considering popular IPs are mostly animation characters, movie
characters or K-pop derivative products. The primary fan group of pop toys are people
between the ages of 16 to 40. Pop toys featured unique, limited and fashionable
lifestyles are appealing to them. Therefore, according to the Frost & Sullivan Report,
there are tremendous growth potentials in the pop toy retailing markets of these
countries.

Japan

     The pop toy retailing marketing in Japan is relatively developed, with more than
2,500 players by the end of 2019, according to the Frost & Sullivan Report. According
to the Frost & Sullivan Report, the market size of pop toy retailing in Japan in terms of
retail value was US$1.5 billion in 2019, and is expected to reach US$3.5 billion in
2024, representing a CAGR of 18.5%. The following charts set forth the major players
in the pop toy retailing market in Japan, which are selected based on their market
shares in terms of retail value in 2019:
                     Market
     Company         share           Background                                  IPs Operated

     Company C       25.5%           A leading listed entertainment company      approximately
                                       based in Japan with significant             18 proprietary
                                       present in toy development,                 IPs and one
                                       production and sales. It has many           licensed IP
                                       popular IPs from cartoons and video
                                       games.

     Company E       17.3%           A toy manufacturer based in Japan and       approximately
                                       also one of the biggest toy companies       23 proprietary
                                       in the world.                               IPs and four
                                                                                   licensed IPs

     Company A       5.2%            A multinational toy production company      approximately
                                       based in Europe. Its featured toys          28 licensed
                                       consist mostly of interlocking plastic      IPs
                                       bricks. It also operates several
                                       amusement parks and numerous retail
                                       stores across the world.

     Source: Frost & Sullivan

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Korea

     The pop toy retailing marketing in Korea is relatively developed, with more than
3,500 players by the end of 2019, according to the Frost & Sullivan Report. According
to the Frost & Sullivan Report, the market size of pop toy retailing in Korea in terms of
retail value was US$0.5 billion in 2019, and is expected to reach US$1.3 billion in
2024, representing a CAGR of 21.1%. The following charts set forth the major players
in the pop toy retailing market in Korea, which are selected based on their market
shares in terms of retail value in 2019:
                      Market
     Company          share          Background                                  IPs Operated

     Company F        8.9%           The first toy company in Korea to           approximately
                                       develop its own native toys and             19 proprietary
                                       animation.                                  IPs and three
                                                                                   licensed IPs

     Company A        7.6%           A multinational toy production company      approximately
                                       based in Europe. Its featured toys          28 licensed
                                       consist mostly of interlocking plastic      IPs
                                       bricks. It also operates several
                                       amusement parks and numerous retail
                                       stores across the world.

     Company D        4.4%           A listed multinational toy and board        approximately
                                       game company based in the United            90 proprietary
                                       States. It has many famous brands of        IPs and nine
                                       toy and other products based on IPs         licensed IPs
                                       from movies and comics.

     Source: Frost & Sullivan

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Singapore

     The pop toy retailing marketing in Singapore is relatively developed, with more
than 3,800 players by the end of 2019, according to the Frost & Sullivan Report.
According to the Frost & Sullivan Report, the market size of pop toy retailing in
Singapore in terms of retail value was US$0.07 billion in 2019, and is expected to
reach US$0.17 billion in 2024, representing a CAGR of 19.4%. The following charts
set forth the major players in the pop toy retailing market in Singapore, which are
selected based on their market shares in terms of retail value in 2019:
                      Market
     Company          share          Background                                  IPs Operated

     Company A        20.4%          A multinational toy production company      approximately
                                       based in Europe. Its featured toys          28 licensed
                                       consist mostly of interlocking plastic      IPs
                                       bricks. It also operates several
                                       amusement parks and numerous retail
                                       stores across the world.

     Company D        11.4%          A listed multinational toy and board        approximately
                                       game company based in the United            90 proprietary
                                       States. It has many famous brands of        IPs and nine
                                       toy and other products based on IPs         licensed IPs
                                       from movies and comics.

     Company G        4.1%           A leading global toy manufacturing          approximately
                                       company headquartered in California,        218
                                       famous for its series dolls.                proprietary
                                                                                   IPs and 16
                                                                                   licensed IPs

     Source: Frost & Sullivan

MONETIZATION OPPORTUNITIES OF POP TOY IP

    Pop toy retailing currently is the primary way of monetization for pop toy IPs. As
leading pop toy IPs gain significant popularity among fans, licensing and adaptation
provides additional monetization opportunities to extend the value of pop toy IPs into
a wide range of fields, such as licensed merchandise (other than toys),
advertisements, video games, movies, comic books, etc.

     Successful IPs have significant commercial value extended well beyond their
original formats. The market value of the top three IPs globally, as measured by
cumulative business value, was US$95.0 billion, US$86.0 billion and US$76.0 billion,
respectively, in 2019, according to the Frost & Sullivan Report. These IPs were
originated from cartoons or video games and were initially launched in 1996, 1974 and
1924, respectively.

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                                       INDUSTRY OVERVIEW

IP Licensing

     IP licensing primarily consists of two categories, merchandise licensing and
space licensing. Merchandise licensing refers to the arrangements where IP owners
allow licensees to develop and sell branded products based on popular IPs, usually
for a specific period of time. Space licensing refers to using IP and related concepts to
conduct themed events or space decoration, such as conventions, exhibitions,
themed stores and theme parks, with the purpose of providing immersive experiences
as well as to sell IP-related products.

    According to the Frost & Sullivan Report, IP licensing industry has huge growth
opportunities in China. Driven by a continuous growing demands, the market size of
China’s IP licensing industry is expected to reach RMB156.1 billion by 2024,
representing a CAGR of 13.1% from 2019. The following chart illustrates the historical
and expected market size of China’s IP licensing market as measured by retail value:

                   Market Size of IP licensing industry, by Retail Value (China), 2015-2024E
     RMB Billion
                           2015-2019     2019-2024E

                            14.9%             13.1%
                                                                                               156.1
                                                                                      135.7
                                                                            115.7
                                                                   96.4
                                                  84.4
                                       73.2                 77.3
                               65.6
       48.5         55.5

      2015          2016       2017    2018       2019     2020E   2021E    2022E    2023E     2024E

     Source: Frost & Sullivan, research reports published by AECOM and Mintel Group

IP Adaptation into Entertainment Content

     Pop toy IP operators may authorize other companies to adapt their IPs to be
commercially used in digital games, films, drama series and television shows, and
animations. In terms of revenue, the IP-adapted entertainment market in China has
increased by a CAGR of 21.8% from 2015 to 2019, reaching RMB308.0 billion in 2019,
and is expected to reach RMB586.7 billion by 2024, representing a CAGR of 13.8%

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                                            INDUSTRY OVERVIEW

from 2019. The following chart illustrates the historical and expected market size of
China’s IP-adapted entertainment market as measured by revenue:

                       IP-adapted Entertainment Market Size by Revenue (China), 2015-2024E
         RMB Billion
                                                                                                          2015-   2019-
           Digital Game                                                                586.7    CAGR
                                                                                                          2019    2024E
           Film                                                                524.3
           Drama Series & TV Show                                                               Digital
                                                                                                          19.1%   11.2%
           Animation                                                   463.4                    Game
                                                                                       256.1
                                                               403.9
                                                                               233.8
                                                                                                 Film     22.6%   16.1%
                                                     330.4             211.4
                                             308.0
                                                               190.4                            Drama
                                    263.9                                              90.0    Series & 25.0%     17.2%
                            226.1                    183.4                     79.1            TV Show
                                             150.5
                                                                       68.6
                    178.5           131.6                      56.0
         140.0              117.6                                                      162.8   Animation 26.6%    13.5%
                    94.5                     42.7    12.6                      141.4
          74.9                      35.7                       102.9   121.1
                            30.1                     86.8
                    21.7            61.6     73.5
         18.9               50.4                                                                 Total    21.8%   13.8%
            30.1    40.6                                               62.3    70.0    77.8
                            28.0    35.0     41.3    47.6      54.6
         16.1       21.7
         2015       2016    2017    2018     2019    2020E    2021E    2022E   2023E   2024E

     Source: Frost & Sullivan, China Audio-video and Digital Publishing Association

SURVEY

     In December 2019, we commissioned Frost & Sullivan to conduct street
interceptions and digital questionnaire and face to face interviews with 1,200
randomly selected participants in the PRC to better understand the product
preferences and pop toy market from a consumer’s perspective. Set forth below are
the details of the survey conducted by Frost & Sullivan. 1

     •           Consumer base. More than 95% of pop toy consumers are between the ages
                 of 15 and 40, 63% of whom hold bachelor degrees or above.

1
     The survey contains a total of 33 questions. Questions directly relate to each survey result are set
     out as follows:

     •           Consumer base. What is your age, highest educational background?

     •           Purchasing power. (i) How much do you spend on pop toys each year? (ii) What is your
                 frequency of buying pop toys every year for the past three years?

     •           Fan community. (i) Have you ever joined an pop toy community? (ii) What features attract you
                 to join a pop toy community?

     •           Factors influencing buying decision. What are the major factors you consider when purchasing
                 pop toys?

     •           Retail channels. Where do you usually purchase pop toys?

     •           Blind box. How many times would you repeatedly purchase a series of “blind box” toys for a
                 specific toy design?

     •           Brand recognition and store popularity. (i) Which pop toy store brand have you heard of? (ii)
                 Which pop toys store brand did you shop most frequently?

     •           Product popularity. What pop toys have you bought?

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                                INDUSTRY OVERVIEW

     •    Purchasing power. Over 45% of pop toy consumers spend over RMB500 on
          pop toys per year, 19.8% of whom purchased pop toys more than five times
          in 2019.

     •    Fan community. Almost half of the pop toy consumers are members of pop
          toy communities. Members events and promotional activities are the main
          reasons for the members to join the community.

     •    Factors influencing buying decision. Creative design is the most important
          factor the consumers consider when purchasing pop toys.

     •    Retail channels. E-commerce, offline stores and vending machines are the
          top three channels for purchasing pop toys.

     •    Blind box. Around 70% of pop toy consumers would purchase blind box toys
          three times or more for a specific toy design they want.

     •    Brand recognition and store popularity. Pop Mart is one of the most
          well-known pop toy brands and one of the most popular pop toy stores
          among pop toy consumers in China.

     •    Product popularity. Molly is one of the most popular products among wide
          range of pop toy IPs on the market.

      In the Survey, questions are designed to effectively filter in participants who have
(i) bought or plan to buy pop toys in the near future, or (ii) have heard of pop toys,
which are believed to be representative customers of pop toys, according to the Frost
& Sullivan Report. The Survey is conducted through multiple channels including street
interviews and online questionnaire with randomly selected participants to ensure a
fair and wide coverage. Such progress is closely monitored to ensure the collection of
sufficient effective samples. All of the 1,200 participants are effective samples, which
are sufficient for the purpose to better understand the product preferences and pop
toy market from a consumer’s perspective, and are comparable with similar surveys in
other retail industries, according to the Frost & Sullivan Report.

DIRECTORS’ CONFIRMATION

     As of the Latest Practicable Date, after taking reasonable care, our Directors
confirm that to the best of their knowledge, there was no adverse change in the market
information since the respective dates of the various data contained herein, which
may qualify, contradict or have an impact on the information in this section.

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