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Tanwan (SEHK:9890): Valuation Check After New Five-Year Pop Toy IP Partnership and Ecosystem Expansion

Simply Wall St · 2d ago

Tanwan (SEHK:9890) just signed a five year strategic cooperation with COEXIST Group and Shenzhen Gongyisi Culture, locking in exclusive pop toy rights from over 200 artists. The stock is already reflecting that pivot.

See our latest analysis for Tanwan.

The latest cooperation news lands after a strong run, with the share price at HK$15.98 and a year to date share price return of 124.75% pointing to building momentum. At the same time, the 1 year total shareholder return of 87.56% shows longer term holders have already been well rewarded.

If Tanwan’s pop toy push has grabbed your attention, it could be a good moment to see what else is growing fast by exploring fast growing stocks with high insider ownership.

But with Tanwan pivoting from games into a broader IP and pop toy ecosystem, is the recent rally still leaving room for upside, or are investors already paying today for the company’s future growth potential?

Price-to-Earnings of 7.8x: Is it justified?

At HK$15.98, Tanwan trades on a price-to-earnings ratio of 7.8 times, which screens as inexpensive relative to both the wider Hong Kong market and direct peers.

The price-to-earnings ratio compares what investors are paying today for each unit of current earnings, making it a central yardstick for profitable entertainment and gaming businesses like Tanwan. With earnings having grown strongly over the past five years and the company only recently moving decisively into profitability, a single-digit multiple hints that the market is not pricing in especially ambitious profit expectations.

Against the Hong Kong Entertainment industry average price-to-earnings of 14.9 times and a broader market average of 12.3 times, Tanwan’s 7.8 times multiple looks meaningfully lower. That discount suggests investors are paying a far smaller premium for Tanwan’s earnings than they are for comparable companies, despite its high historical earnings growth and elevated return on equity.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 7.8x (UNDERVALUED)

However, Tanwan’s diversification beyond core gaming and the execution risk in building a pop toy IP ecosystem could challenge margins and sustain investor scepticism.

Find out about the key risks to this Tanwan narrative.

Build Your Own Tanwan Narrative

If you see things differently or want to dig into the numbers yourself, you can craft a personalised view in just a few minutes: Do it your way.

A great starting point for your Tanwan research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.