Guojin Securities released a research report forecasting BLOKS's (00325) net profit attributable to shareholders for 2025-2027 at RMB678 million, RMB916 million, and RMB1.154 billion, representing year-on-year growth of 270%, 35%, and 26%, respectively. The current stock price implies a 2026 P/E of 17x, and the bank assigns a 22x P/E, setting a target price of HK$80.74 while maintaining a "Buy" rating.

The bank believes competition in licensed IP products ultimately hinges on product strength, channel capabilities, and user engagement. BLOKS has established a virtuous cycle across these three dimensions, laying a solid foundation for long-term brand momentum and scale growth. Key insights from Guojin Securities include:

**Product Value x Channel Density x User Ecosystem Drive Long-Term Growth** BLOKS’s competitive edge stems from its product quality, distribution network, and user ecosystem. On product strength, the company holds 72 licensed IPs and 925 active SKUs, offering a diverse portfolio with superior cost-performance ratios across price segments, supported by refined materials, structural design, and mold precision.

For channel capabilities, BLOKS focuses on expanding offline presence in lower-tier markets, targeting school-adjacent stores to efficiently engage core users. This strategy replaces high-cost advertising with experiential branding and funnels users into online ecosystem activities like BFC tournaments, reinforcing the brand loop.

User engagement is bolstered through membership clubs, BFC tournaments, and KOL/KOC/UGC collaborations, fostering community loyalty and repeat purchases. This creates a self-reinforcing cycle of "high value → channel expansion → ecosystem feedback."

**Mid-Term Growth Driver 1: Demographic Expansion** Currently, ~80% of revenue comes from male customers aged 6–16. BLOKS is broadening its reach via two paths: - **Female Segment**: Leveraging aesthetically appealing, accessible products like the Dadoo series, enhanced by BFC culture and offline events to amplify creativity and social appeal. - **Adult Segment**: Diversifying IP offerings (e.g., EVA, Saint Seiya) to cater to niche interests, with premium, highly articulated collectibles supported by KOL/KOC outreach. Success here could unlock significant incremental growth beyond core IPs.

**Mid-Term Growth Driver 2: Overseas Expansion** BLOKS combines China’s supply chain efficiency with a dynamic IP portfolio to sustain product novelty. It replicates its domestic ecosystem (clubs, tournaments, exhibitions) abroad to build localized communities. Overseas revenue surged 518.2% YoY in 2024 to RMB64 million and 898.6% in 1H2025 to RMB111 million, validating global potential. IPs like "Transformers" may lead growth in key markets (North America/Asia-Pacific), positioning overseas as a major future contributor.

**Risks**: IP license expirations; overreliance on third-party IPs; slower demographic expansion; weaker-than-expected overseas performance; intensified competition.