Mar. 20 (NBD) -- Alpha Group, a China-based animation and entertainment company committed to creating the "Oriental Disneyland", has been named the master toy partner for Peppa Pig in China, the company announced Monday. 

Peppa Pig is a hit pre-school property of Entertainment One Ltd. ("eOne"), one of the largest music and video distribution companies in Canada. The animation series made a strong broadcast debut on China's CCTV two years ago, winning the heart of Chinese children based on its heartwarming stories and humorous dialogues. It has also attracted a large number of adults. The series has racked up over 45 billion views.

Under the new deal, the two companies will introduce an extensive new toy line in the fourth quarter of 2018, including play-sets, figurines and role play toys. The new line will be mainly distributed in the Chinese market. 

When reached by NBD, Wang Lan, deputy PR director of Alpha Group, said that the cooperation with eOne is a win-win deal as the Canadian company doesn't have any edge in production in China. Alpha Group has its own product lineup, yet introducing foreign intellectual properties (IPs) is helpful to meet the diversified market demand. 

Last month, Alpha Group reached a strategic agreement with Nickelodeon, a program aimed at children and teenagers, to conduct a series of industrial cooperation around the world based on the legendary animated TV series SpongeBob SquarePants. 

Regarding the royalty fees, Wang declined to share any information.  

The new moves mark Alpha Group's return to its main businesses - animation and cartoon toy business.  

Over the past few years, the company has made forays into pan-entertainment sectors like film and TV, gaming, and network dramas in addition to virtual reality and artificial intelligence, so as to seek more business opportunities. 

However, the expansion in those areas didn't bring expected results, but dragged down the company's overall performance. 

According to the fiscal results for 2017, Alpha Group's revenue was about 3.6 billion yuan (575.7 million U.S. dollars), up 8.36 percent year over year. Its net profit attributable to shareholders of the listed firm was around 82.4 million yuan (13.0 million U.S. dollars), representing a fall of 83.47 percent from 498 million yuan (78.7 million U.S. dollars) in 2016.  

The steep drop in net profit was a result of the less-than-expected designer toy business as well as gaming business and losses on investments in the film and TV business, the company said. 

Shen Meng, board director of boutique investment fund Chanson Capital, said to NBD that it is wise for Alpha Group to return to its main businesses under such circumstance, as there is few successful cases in integration across animation, film, and gaming sectors and the customer bases of these fields actually have slight differences. Moreover, the film and gaming industries face strict supervision mechanism and intensified competition, with a majority of companies presenting dull performance. 

In the interview, Wang admitted that the company doesn't have core competency in pan-entertainment areas. These sectors require a great amount of capital and manpower to cultivate, which is not what the company could do at the current stage.

Email: lansuying@nbd.com.cn