Hong Kong concept tracking|The market vitality of IP derivatives is relatively high. Ali Fish, as a leading IP authorization platform, benefits greatly from downstream IP expansion (with concept stock)

On January 10th, BLOKS was listed on the Hong Kong Stock Exchange. During the public offering stage, BLOKS received 5999.96 times oversubscription, and the international offering received 38.6 times oversubscription, reflecting the market's optimism towards the construction role-playing toy sector. BLOKS creates construction role-playing toy products through its own IP and licensed IP, and has a cooperation relationship with Ali Fish, a subsidiary of ALI PICTURES, regarding IP rights. EB SECURITIES research believes that Ali Fish is expected to benefit from the expansion of IP portfolio by companies like BLOKS and the growth of sales of related licensed IP products. Ali Fish is the IP licensing agency platform under ALI PICTURES (01060). 1) Global perspective: According to the "2024 Global Top Licensing Agency Rankings", the sales of global licensing agencies increased by $5.7 billion in 2023, with a total retail sales of $93.63 billion for the year. China's licensing agency, Ali Fish, ranked 11th on the list. In 2022, Ali Fish entered the list and ranked 25th. In 2023, its ranking soared 14 places to 11th, with retail sales reaching $2.75 billion (compared to $430 million in 2022). 2) Domestic perspective: According to the "2024 Chinese Brand Licensing Industry Development White Paper", China's brand licensing market has been growing steadily over the past six years. In 2023, China's annual retail sales of licensed products reached 140.1 billion yuan, an increase of 0.8% year-on-year; the annual licensing revenue in China in 2023 was 5.47 billion yuan, a year-on-year increase of 0.9%. Ali Fish is the largest IP licensing agency platform in China. 3) Significant copyright advantages of Ali Fish: Since its establishment in 2016, Ali Fish has cooperated with hundreds of high-quality domestic and foreign IPs and thousands of brands and channel merchants to build an IP matrix, including Sanrio, Pokemon, Universal Pictures, Chiikawa, Crayon Shin-chan, and more. 4) Fast growth in Ali Fish's revenue: In the first half of FY25, Ali Fish's retail sales of licensed IP products increased significantly year-on-year, driving a revenue growth of over 40% year-on-year for Ali Fish. Derivative products are the most valuable form of IP monetization. The scale of trendy toys is steadily increasing, with emerging sectors like collectible card games and construction role-playing toys showing potential. According to BLOKS' prospectus, the compound annual growth rate of China's construction role-playing toy market is expected to reach 41% from 2023 to 2028. BLOKS' IP portfolio: According to the prospectus, the company has signed non-exclusive licensing agreements with around 50 well-known IPs, including Saint Seiya, Pokemon, Sanrio (Hello Kitty, etc.), which are licensed by Ali Fish. EB SECURITIES research believes that as other IP products such as Transformers and Pokemon advance, the proportion of the company's Ultraman revenue is expected to further decrease. Additionally, the growth in sales of licensed IP products from Ali Fish is likely to boost Ali Fish's revenue.