HK Stock Market Move | BLOKS (00325) rose more than 4% in the afternoon, the company has vast market and overseas opportunities. Sales are steadily increasing driven by big IP.

BLOKS (00325) rose more than 4% in the afternoon, rising 4.01% to HK$93.4 at the time of publication, with a turnover of HK$2863.93 million. Founder released a research report stating that the company's product portfolio is rich, with a total of 431 SKUs available for sale as of 2024H1, covering diverse needs of consumers of all ages and genders. Mainstream products are priced from RMB 9.9 to 399, and with the sinking of prices, sales have significantly increased, driving rapid growth in revenue. In terms of IP, as of December 24, the company has expanded its authorized IP matrix to around 50, and is in negotiations for over 25 IPs. In terms of channels, through cooperation with over 450 distributors, the company has effectively covered all first-tier and second-tier cities as well as over 80% of third-tier and below cities, with plans to gradually expand into sinking markets. In addition, with the gradual expansion of overseas IP rights and relying on China's high-quality production capacity, the company's overseas market growth is promising. China Galaxy Securities stated that the company is a leading enterprise in the role-playing toy field, with sales steadily increasing driven by big IPs. The market share continues to increase under the channel sinking strategy, and future economies of scale will drive the company's profit increase steadily. The bank is optimistic about the company's future growth prospects, and predicts that the company's adjusted net profit for 2024-2026 will be 6.06/9.32/12.45 billion RMB, corresponding to PE ratios of 34/22/17X at the latest closing price.