By 2025, the "Overbuy King" and the "Frozen Capital King" may have emerged. Can BLOKS (00325) become the next dark horse to double in the Hong Kong stock market "valley economy"?

s of now in 2025, compared to the previous year where the annual buyers and frozen capital kings only appeared at the end of the year, this year saw a strong competitor for these titles emerge at the beginning of the year - BLOKS (00325). On January 10th, BLOKS was officially listed on the Hong Kong Stock Exchange. In the public offering in Hong Kong, it was oversubscribed by 5999.96 times, and internationally oversubscribed by 38.6 times, ranking third in the history of Hong Kong IPO listings in terms of total subscription amount. In terms of frozen capital, the size of the frozen capital in BLOKS' IPO this time was surpassed only by Ant Group, which was postponed in 2020, and Kuaishou in 2021, ranking third in the history of Hong Kong IPO listings. Repeating the past or soaring to new heights? Looking at the overall performance of the grey market on January 9th, BLOKS had a similar performance in the largest two grey markets. The overall trend was a low opening followed by a rise, followed by a fall from the high point before stabilizing again, and finally closing at a second highest price. According to trading data from Livermore Securities, BLOKS closed at 105.3 Hong Kong dollars, up 74.48% from the offer price of 60.35 Hong Kong dollars per share, with a profit of 13,485 Hong Kong dollars per 300 shares without counting fees. While the grey market is a trading behavior among retail investors in single broker IPOs, theoretically it should not affect the official listing trading, but to some extent reflects market sentiment and expectations. In fact, as a strong contender for the title of "annual buyers king" in 2025, BLOKS, like HERBS GROUP before it, has garnered significant market attention, but HERBS GROUP's performance after listing was not as expected. HERBS GROUP was listed on December 19th, with the opening price reaching 5.05 Hong Kong dollars at one point, eventually closing up 10.4% at 4.14 Hong Kong dollars. However, the next day, Grass Chicken Group saw a significant drop, falling more than 18% at one point during the day. On December 23rd, HERBS GROUP's stock price continued to decline, closing at 3.08 Hong Kong dollars, down 9.94%, falling below the IPO price of 3.75 Hong Kong dollars per share. As for BLOKS, the initial performance after listing seems to align with market expectations behind its high subscription rate. After officially listing, BLOKS opened at 109.6 Hong Kong dollars per share, up 81.61% from the offer price, with a total market capitalization of 26.862 billion Hong Kong dollars. Looking at the stock price trend on the first day, BLOKS' stock price quickly fell after the high opening of 80%, maintaining a rise of over 60% before 10:30 am. However, around 10:39 am, there was a sudden wave of small declines in the company's stock price, and by around 11:30 am, the increase had narrowed to 43.50%. At the opening of the midday session, the stock price of BLOKS rose by over 50% within half an hour, but dropped quickly in less than half an hour, with the later rise fluctuating below 50% and finally closing at 85.00 Hong Kong dollars, up 40.85%. Looking at the trading seats for brokers on the first day, the top three buying seats for BLOKS were China Citic, Huatai, and GF Securities, with net purchases of 2.2497 million shares, 0.6933 million shares, and 0.3771 million shares respectively. The top three selling seats were Hui Li, Credit Suisse, and China Citic Lyon, with sales of 0.3189 million shares, 0.2154 million shares, and 0.1302 million shares respectively. Considering the distribution of chips, due to the fact that BLOKS' stock price on the day narrowed from over 80% to 40.85% at closing, many chips were locked at high levels. Currently, 70% of the company's chips are in the range of 90.10 Hong Kong dollars to 103.50 Hong Kong dollars, with an average cost of 98.50 Hong Kong dollars, higher than the closing price of 85.00 Hong Kong dollars per share. The overlap of chip ranges is 75.70%, with a profit ratio of only 0.91% on that day, and some signs of the bottom-fishing phenomenon by positions of funds. Referring to the stock price trend of HERBS GROUP before, whether BLOKS will repeat the past or soar to new heights, or if there will be a trend within a few days after listing, remains to be seen. "The Grain Economy" is booming, and the timing of profitability is key The frenzy surrounding the BLOKS IPO may reflect investors' recognition of the potential development of the "Grain Economy," which has been popular in the consumer market recently. It is understood that the "Grain Economy" was one of the hottest concepts in the domestic capital market at the end of 2024. "Grain" is the transliteration of the English word "Goods," referring broadly to IP peripheral products such as comics, animations, games, etc. Because they satisfy the emotional value of young people, these products have immense development potential and are basically unaffected by macroeconomic and consumer market influences. According to Guotai Junan Securities research reports, common classifications of "Grain" on the market include Ba Chi, Li Pai, Card, and Doll. Ba Chi comes from the English word "badge" for badges, and is mainly made of materials like nickel, plastic, with common sizes around 3-8 cm, usually with second element IP related designs on the front; Li Pai refers to signs made of acrylic materials with character images or related patterns; Cards are usually sold in blind boxes or bags, with rich IPs, classified by card material as colored paper, polaroids, flash cards, translucent cards, holographic tickets, etc. In terms of market space, according to statistics from the Forward Industry Research Institute, the overall scale of the Chinese secondary market exceeded 220 billion yuan in 2023, with the content market exceeding 110 billion yuan. The secondary game market holds an important position, with a scale of about 80 billion yuan. Compared to the content market of the secondary dimension, IP peripheral products have become a rapidly growing track, with the market size increasing rapidly from 5.3 billion yuan in 2016 to 102.4 billion yuan in 2023, with an annual compound growth rate of 52.70%. Currently, the secondary market is increasingly enthusiastic about the concept of the "Grain Economy."For example, in November and December 2024, several "grain economy" concept stocks in A-shares showed strength. Among them, Shifeng Cultural Development, Guangbo Group Stock continued to hit the daily limit for consecutive days, Rastar Group, Guangzhou Wahlap Technology Corporation and other GEM stocks appeared with a 20% limit up, and other related concept stocks also followed the trend to strengthen. Currently, the six leading stocks in the A-share grain economy have been bought in bulk by several foreign institutions, including Morgan Stanley, JPMorgan Chase, Goldman Sachs, HSBC, and Barclays.In the Hong Kong stock market, the stock price of POP MART (09992) soared by 346.59% in 2024, while another conceptual stock company MNSO (09896) has been on the rise for four consecutive years since its listing. Currently, the stock price has reached 47.50 Hong Kong dollars, a cumulative increase of 467.50% from the low point of 8.37 Hong Kong dollars in 2022. For BLOKS, the company has a significant position in the field of modular character toys. According to Frost & Sullivan data, in 2023, it ranked third in the global modular character toy market with a GMV share of 6.3%, and its market share in China reached 30.3%. From the perspective of market operations and company performance, BLOKS has a rich portfolio of IP resources, including over 500 patents and approximately 50 well-known IP licensing partnerships, such as Ultraman and Transformers. Popular IP toy products have successfully attracted a large number of consumers, driving revenue from 3.256 billion yuan in 2022 to 8.77 billion yuan in 2023, with a 237.6% increase in the first half of 2024 compared to the same period last year, reaching 10.46 billion yuan. Therefore, as a hot concept in both the AH market, BLOKS, also a hot concept target in the "valley economy," is likely to continue to be favored by the market in the future. However, there are also factors that may restrain its valuation from continuing to rise, such as the company's profitability. Although the company's revenue has grown rapidly during the reporting period, the situation of continuous net losses has not been reversed. The prospectus shows that the company was in a loss-making position in 2021-2023 and the first half of 2024, with net losses of 5.07 billion yuan, 4.23 billion yuan, 2.07 billion yuan, and 2.55 billion yuan respectively. The accumulated loss in the three and a half years is close to 14 billion yuan. However, from a trend perspective, the current net loss is gradually narrowing, and the key factor for turning losses into profits in the future could be one of the factors that further increase the company's valuation.