HK Stock Market Move | BLOKS(00325) rose more than 5% during trading hours, IP empowers growth, the company's revenue scale continues to grow rapidly

BLOKS (00325) rose over 5% in midday trading, reaching a 5.35% increase at the time of publication, closing at HK$86.6 with a turnover of HK$22.59 million. Guotai Junan released a research report stating that BLOKS is a leading company in the role-playing building toy industry, benefiting from strong IP resources, product strength, and channel power. The business scale is expected to continue expanding, with ample growth potential. The company's revenue from role-playing building toys currently accounts for over 80%, with operating income expected to increase rapidly from HK$330 million in 2021 to HK$877 million in 2023, with a CAGR of 63%. Profitability is also expected to improve continuously, with the gross profit margin rising steadily from 37.4% in 2021 to 52.9% in 2024, and the adjusted net profit turning positive in 2023 and reaching 27.9% in 2024. China Securities Co., Ltd. pointed out that BLOKS' success mainly comes from entering the rapidly growing Chinese role-playing building toy market, offering consumers a fun experience and affordable prices through cooperation with popular IPs, blind box sales, and a standard component production system. Compared to other brands like Bandai, BLOKS products offer better value for money, and compared to domestic manufacturers, BLOKS products have stronger playability, richer accessories, and a more diverse range of IPs. Looking ahead, with the company lowering product prices, expanding its IP portfolio, and venturing into international markets, it is expected to drive continued growth for the company.