In the first half of 2025, POP MART achieved over 200% growth in both revenue and net profit, with overseas business revenue increasing 439.6% year-over-year. Founder and Chairman Wang Ning stated at the earnings conference that achieving over 30 billion yuan in revenue this year would be relatively easy, and the upcoming mini-version Labubu is expected to become a super hit product. On the same day, POP MART's stock price hit a historical high of HK$316 per share, with market capitalization surging above HK$400 billion.

Just one day later, TOP TOY, a subsidiary of MINISO, announced it had secured strategic financing led by Singapore sovereign wealth fund Temasek, with a post-investment valuation of HK$10 billion. From January to June 2025, TOP TOY's segmented business revenue reached approximately 742 million yuan, growing 73.0% year-over-year, with 293 offline stores. Public reports indicate that MINISO has hired JPMorgan Chase and UBS Group to prepare for TOP TOY's Hong Kong IPO, expecting to raise $300 million. Additionally, 52TOYS, backed by "IP giant" Wanda Film and Ruyi Films, and trading card leader KaYou have also submitted applications to the Hong Kong Stock Exchange.

BLOKS, operating in the same trendy toy sector, has not received similar capital market enthusiasm. According to its interim results report, the company achieved total revenue of 1.338 billion yuan in the first half, up 27.9% year-over-year, with overseas sales surging 898.6% to 111 million yuan compared to the same period in 2024. Adjusted net profit reached 320 million yuan, up 9.6% year-over-year, while profit attributable to owners of the parent company was 297 million yuan, compared to a loss of 258 million yuan in the first half of 2024. Notably, this marked BLOKS' first return to profitability in terms of net profit attributable to the parent company since the 2023 interim report.

However, on the first trading day after the results announcement, BLOKS opened with a significant dive, plummeting as much as 17.7% intraday and touching a low of HK$96.7 per share. Although it recovered slightly above HK$100 per share, it still closed down 13.5%, with a single-day turnover rate of approximately 4.0% and trading volume exceeding HK$1 billion. In fact, BLOKS' stock price has been under continuous pressure and declining over the past two months, with a cumulative drop of about 32.6%. The company's latest market capitalization stands at HK$26.545 billion, representing a 44.9% decline from its peak in early June.

(Source: Wind, June 9 to August 27, 2025)

**Sales Driven by 9.9 Yuan Budget Products, Licensed IP New SKUs Contribute Over Half of Performance**

Investors' lukewarm reception to this interim "report card" may stem from two core reasons.

First, performance growth has significantly decelerated. By product category, BLOKS' building character toy sales revenue totaled 1.325 billion yuan in the first half of 2025, up 29.5% year-over-year, accounting for 99.0% of total revenue. While sales volume increased significantly by 96.8% to 111 million units, this was far below the 411.0% growth rate from H1 2023 to H1 2024. Among these, budget-priced products at 9.9 yuan retail price sold 48.6 million units, representing about 43.9% of total building character toy sales volume. Excluding the impact of budget products, normal-priced building character toy sales volume only grew modestly by 10.5% compared to the same period in 2024.

During the reporting period, building block toys further contracted, with sales revenue declining 45.5% year-over-year to 12.512 million yuan. Compared to 58.099 million yuan in the first half of 2023, this represents a sharp 78.5% decrease. Only about 100,000 units were sold in six months, down 42.9% from the same period in 2024, while sales volume in the first half of 2023 was 531,000 units. The prospectus shows that the "main force" of building block toys was the company's proprietary IP "Bianbianblooks." Without active product structure adjustments, the sales decline reflects the relatively weak vitality of its proprietary IP.

By region, BLOKS' domestic market still contributes over 90% of total revenue, with year-over-year revenue growth rates of 173.0%, 151.3%, and 18.5% for 2022 to the first half of 2025, respectively, falling to double digits for the first time. In overseas markets, revenue from Asia (excluding China) and North America increased 652.5% and 2135.9% respectively compared to the first half of 2024. However, due to low base figures, the combined revenue share of these two regions is less than 8%, with limited positive impact on overall performance.

Meanwhile, BLOKS' sales costs increased by 40.2%, exceeding the revenue growth rate for the same period. Beyond commodity costs rising with sales volume, the company increased mold quantities to meet the demand for high-precision and multi-cavity molds for newly launched SKUs, causing mold depreciation expenses to surge 208.1% compared to the same indicator in the first half of 2024. As a result, comprehensive gross margin declined 4.5 percentage points to 48.4%. To develop and promote new products, BLOKS' sales and distribution expenses and R&D expenses increased 46.4% and 69.5% year-over-year respectively, with net profit margin recording 22.2%.

Second, dependence on licensed IP remains unresolved. Based on the prospectus and previous financial reports, BLOKS' most "profitable" IP has consistently been Ultraman. In H1 2023 and H1 2024, Ultraman IP generated revenue of 204 million yuan and 601 million yuan respectively, accounting for approximately 65.8% and 57.5% of revenue in those periods. In the first half of 2025, although the company did not separately disclose Ultraman IP performance, the 273 newly launched SKUs came from licensed IPs including but not limited to Hatsune Miku, Minions, Kuromi, Detective Conan, Sesame Street, Ultraman, Transformers, Marvel: Infinity Saga, Pokémon, and Naruto, with combined revenue accounting for 53.1%.

In other words, the company's fundamentals are still primarily supported by licensed IP. However, on one hand, licensed IPs generally lack exclusivity. Taking Ultraman IP as an example, many brands including TOP TOY, Bandai Namco, Qimiao Building Blocks, and Zhongdong Toys also produce and sell similar licensed building toy products, dividing BLOKS' already limited market share. On the other hand, licensed IP market popularity experiences cyclical fluctuations, with relatively low operational flexibility and freedom. Especially without stimulation from phenomenal film or cultural events, consumer preferences may shift to other IPs.

In the first half of 2025, BLOKS signed 13 new IPs, with approximately 5% of net proceeds from fundraising used to expand the licensed IP portfolio. The potential risks of rising IP renewal costs and declining popularity in the future cannot be overlooked.

**Post-IPO Unlock Leads to Over 25% Cumulative Decline, Source Code Capital Holdings Drop Below 5%**

On July 10, BLOKS officially faced its first post-IPO share unlock. According to announcement disclosures, this unlock involved 110 million shares from controlling shareholders, representing about 45.14% of total share capital; 70.85 million shares from pre-IPO investors, representing about 28.88% of total share capital; 27.04 million shares from other existing shareholders, representing about 11.04% of total share capital; and 6.43 million shares from cornerstone investors including Greenwoods, UBS AM Singapore, and Fuguo Fund, representing about 2.63% of total share capital.

Public reports show that on the unlock date, some BLOKS shareholders deposited shares with China International Capital Corporation Hong Kong Securities, with a market value of approximately HK$22.64 billion, representing about 6.40% of total share capital. In the Hong Kong stock market, this practice of transferring shares from custody accounts to brokerage securities accounts is called "share parking" or "account transfer," typically potentially preparing for future selling transactions. While this action does not equate to actual selling, the market views it as a potential reduction signal. According to Wind data calculations, from July 10 to the close of the reporting date, BLOKS' stock price cumulatively declined 26.9%.

Based on information disclosed in the prospectus, BLOKS completed three rounds of equity financing before listing, raising a total of 1.643 billion yuan, with a valuation approaching 7 billion yuan after the last round of equity transfer transactions. Its external institutional investors (i.e., pre-IPO investors) include Legend Capital, Yunfeng Capital, Source Code Capital, Jinyi Investment, Gaorong Capital, CITIC Media, and Zhongwang Yinxin under Zhejiang University Netcom Group.

According to shareholder agreement exemption clauses, these institutions are not subject to regular lock-up restrictions and can freely sell their holdings from the first day of listing. However, in the final offering price and allocation results announcement, BLOKS' institutional investors all signed lock-up commitments, agreeing not to sell their holdings for six months from the listing date.

Hong Kong Stock Exchange equity disclosure information shows that Legend Capital and Source Code Capital are institutional investors holding more than 5% of BLOKS after listing, with shareholdings representing 6.23% (IDEA GREAT holding 5.96%, LC Fund IX holding 0.27%) and 5.00% of total share capital respectively. On February 11, 2025, the company exercised over-allotment options to issue 4.1607 million shares at HK$60.35 per share, passively diluting Source Code Capital's shareholding to 4.91%, eliminating the need for future public disclosure of equity changes.

(Source: Hong Kong Stock Exchange Equity Disclosure)

Assuming institutional investors have not yet made large-scale disposals, Source Code Capital's shareholding corresponds to a market value of HK$1.306 billion, equivalent to RMB 1.202 billion. From 2020-2021, Source Code Capital continuously invested a total of 250 million yuan in BLOKS over nine months, with this investment generating returns of approximately 4.81 times. The comprehensive investment returns for Jinyi Investment, Legend Capital, Gaorong Capital, and Yunfeng Capital are 4.27 times, 3.55 times, 3.13 times, and 2.13 times respectively.