Goldman Sachs has released a research report indicating a mixed performance among Chinese IP retailers and toy companies under its coverage for the first half and second quarter of 2026. The bank noted that Miniso Group recorded softer profitability, while Bloks (00325) delivered stronger-than-expected sales figures.

The investment bank has assigned a "Neutral" rating to Bloks (00325) with a target price of HK$72.4, while maintaining a "Buy" rating on Miniso's H-shares with a target price of HK$29.3. Goldman Sachs anticipates that China's IP and toy demand will sustain its resilience in the second half of the year, though growth may decelerate due to a higher comparative base, with overseas trends becoming increasingly divergent.

The firm highlighted that Miniso's domestic sales exceeded expectations, but weaker overseas distributor performance and operational deleveraging exerted downward pressure on its profit margins. For Bloks, revenue surpassed the bank's projections by 6%, driven by assembled model car toys and robust overseas sales. However, gross margins were negatively impacted by mold depreciation, new product ramp-up costs, and the rising proportion of the RMB 9.9 value-priced segment.

Goldman Sachs projects that demand for IP and toy products in China will remain resilient through the latter half of the year, yet growth is expected to moderate against a higher comparison base. Overseas dynamics are likely to show more pronounced differentiation, with Bloks demonstrating stronger growth visibility due to its low market penetration. In contrast, Miniso is prioritizing inventory health, store productivity, and profitability over rapid expansion.

Gross margin continues to be a pivotal point of debate, as logistics, procurement, and product or regional mix may constrain margin expansion. While Bloks may benefit from favorable economies of scale, overseas supply chain investments remain a mitigating factor against such advantages.