- 2024-09-21
- News
Explosive Popularity of the 'Otaku Economy'
Recently, the "Otaku Economy," representing an emerging consumer trend, has exploded in the secondary market, with related concept stocks continuously rising. Most of these concept stocks belong to the culture and media sector, with main businesses including the production and sales of trendy stationery, animation, and game IP (intellectual property) derivatives, etc.
The sudden popularity of the "Otaku Economy" refers to the peripheral products of the second-element IP, for which many young consumers are willing to pay, forming a new consumer force.
According to data at the end of the third quarter this year, among the holding institutions of "grain economy" concept stocks, public funds are mainly passive index funds, with fewer active equity funds. Some securities firms have also paid attention to such concept stocks, with some research reports pointing out that "Otaku shops" are currently in the stage of accelerating store openings, and companies or brands with extensive retail channels are expected to enjoy the industry beta in the early stage.
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Is the speculation of the "Otaku Economy" in the secondary market a flash in the pan, or will it inject new growth momentum into the entertainment sector?
Hot New Opportunity
As of the close on November 26, the three major A-share indices all fell, with the Shanghai Composite Index down 0.12%, the Shenzhen Component Index down 0.84%, and the ChiNext Index down 1.15%. The total market turnover was 1.33 trillion yuan, less than the previous day.
According to Tonghuashun data, on that day, "grain economy" concept stocks were very active, with many stocks closing at or near their upper limit, including Chuangyuan Shares, Huali Technology, Alpha Entertainment, Shifeng Culture, Guangbo Shares, etc., and many stocks have continued to hit the upper limit. The main businesses of these listed companies are related to trendy stationery, animation and game IP derivatives, toy production and sales, etc.
Tonghuashun data shows that as of November 26, many stocks have increased by more than 50% in the past five days. Looking at a longer period, since September 24, many stocks have increased by more than 100%.
The continued rise of "grain economy" concept stocks has also driven some ETFs (Exchange-Traded Funds), with the animation and game theme ETFs tracking related concept stocks, nearly a 40% increase since September 24.
As of the end of the third quarter this year, some passive index funds have heavily held the aforementioned high-rising concept stocks, in addition to a small number of active equity funds that have heavily held the aforementioned concept stocks.
Due to the significant increase in stock prices, several listed companies involved in the "grain economy" have issued announcements of abnormal fluctuations in stock trading. The relevant companies remind that the recent fluctuations in the company's stock prices are relatively large, and investors should pay attention to the risks of secondary market transactions.
Z Generation Loves "Fried Grain"
The emergence of the "grain economy" is related to the second-element culture. "Grain" is a phonetic translation of "goods," mainly referring to some second-element IP peripheral products, such as badges (also known as "bajis"), acrylic signs, laser tickets, etc., which are sought after by many young people of the Z generation (usually referring to the generation born between 1995 and 2009).
It is reported that the behavior of consumers buying "grain" is called "eating grain," and the circle where people who buy "grain" gather together is called the "grain circle."
Reporters saw in some shopping malls in Shanghai that trendy toy stores displayed many animation IP "grains," and the consumers who came to "eat grain" were mostly college students and high school students, among which the most popular "grain" was the IP-rich "baji," also the first choice for "eating grain."
The price of some "bajis" is still affordable, ranging from 15 to 40 yuan, but this can only be considered "common grain" within the "grain circle." According to different prices, there are higher-level titles such as "lake view grain" and "sea view grain."
If a "baji" is a popular animation game IP series, then its price on the secondary platform will be speculated. Reporters have noticed that a "baji" of a popular animation IP has been speculated to tens of thousands on the secondary platform, and if calculated by weight per piece, its value per gram even far exceeds the price of gold per gram.
The market for young people "frying grain" is growing crazily. According to data from the Prospective Industry Research Institute, overall, China's second-element industry has grown from a germ to maturity, and the second-element market has shifted from being driven by the content industry to being driven by both the content industry and peripheral derivative industries. In recent years, the peripheral derivative industry has gradually become one of the main forces driving the development of the second-element market, with its proportion increasing from 28% in 2016 to 46.1% in 2023. Overall, from 2016 to 2023, the scale of China's second-element industry has grown from 18.9 billion yuan to 221.9 billion yuan, with a compound annual growth rate of 42.2%.
In this regard, a research report from Zheshang Securities pointed out that well-known chain grain shops generally rely on upstream IP resources, grow rapidly, have strong explosiveness, and are in the stage of accelerating store openings. "Companies or brands with extensive retail channels at present are expected to enjoy the industry beta in the early stage. In the medium and long term, the core competitiveness will return to product development and selection capabilities, and ultimately fall to differentiated product supply."
Attracting Capital Attention
Belonging to the Z generation of young people, "grain" has become popular, and many securities firms have also successively released related research reports. So, how long can the "grain economy" continue in the secondary market?
"Due to the relatively small total market value of the culture and media sector, it is easy to be driven by related hot spots to rise," said Han Wei, Managing Director of Tai Shi Investment, in an interview with reporters. "The logic behind the recent popularity of the 'grain economy' has two aspects: one is that the scale of the second-element peripheral derivative industry has reached a hundred billion, becoming a new consumer variety that cannot be ignored; the other is that according to various analyses and predictions, the 'grain economy' will have an annual growth rate of more than 15% for a relatively long period in the future."
Liu Youhua, Deputy Director of the Wealth Research Department of Paipai Network, believes that the recent popularity of the "grain economy" mainly comes from the rapid growth of the second-element culture and its peripheral goods market, as well as the consumption boom brought about by the rise of the Z generation of young people.
In Han Wei's view, as the market size of the "grain economy" continues to expand and the market capacity of related listed companies increases, institutional investors' attention to the "grain economy" will continue to increase. This also means that as the macroeconomic operation enters a new normal, high-growth new consumption and new economic models will increasingly attract the attention of institutional investors in the future.
Liu Youhua believes that the "grain economy" has gained high market recognition and active pursuit of funds. The rise of such concept stocks provides new growth momentum for the culture and media sector, and it is expected to continue to drive the rise of the culture and media sector with the continuous heat of the "grain economy."
However, for this emerging consumer trend, Han Wei believes that on the one hand, we should maintain an open attitude and be brave in discovering new investment opportunities. On the other hand, we should calmly choose stocks with core competitiveness and without valuation bubbles, and invest patiently in the long term, without blindly following the trend.
Liu Youhua said that the "grain economy" concept stocks, due to their huge market potential and recent strong performance, are expected to continue to attract more investment in the future, thereby attracting the attention of institutions.
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