On May 17th, 2024, Bloks Group Limited, also known as Bloks Group, from Shanghai, submitted a prospectus to the Hong Kong Stock Exchange and plans to list on the main board of Hong Kong. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.
Link to the Bloks Group prospectus:
Main Business
Established in 2014, Bloks Group is an innovator and leader in the global construction and role-playing toy category. With over 470 patented layouts, original IP capabilities, and partnerships with more than 30 well-known IPs, the company focuses on providing consumers with affordable, highly-restored IP role-playing toys through extensive construction role-playing toy product offerings.
According to Frost & Sullivan, in the construction and role-playing toy market:
Based on 2023 GMV, Bloks Group is China's largest construction and role-playing toy company with a market share of 30.3%;
Based on 2023 GMV, Bloks Group is the third largest construction and role-playing toy company in the world with a market share of 6.3%.
Bloks Group's self-owned IPs and well-known authorized IPs form a rich IP matrix. The company has successfully launched two self-owned IPs, including the versatile Bloks and the hero infinity based on Chinese traditional culture. In addition, the company has currently obtained authorizations from more than 30 well-known IPs, including Ultraman, Transformers, Naruto, Marvel Infinite Legends, Spider-Man and his amazing friends, Minions, Pokemon, Masked Rider, Detective Conan, Hatsune Miku, Saint Seiya, Neon Genesis Evangelion, Hello Kitty, Sesame Street, etc.
Through the patented Bloks innovation system, Bloks Group has redefined role-playing toys and created globally leading, fun and construction role-playing toy products that combine standardization and individualization. As of March 31, 2024, Bloks Group has a total of 391 SKUs for sale, including 130 SKUs for children under 6, 243 SKUs for people aged 6 to 16, and 18 SKUs for people 16 and older.
Bloks Group's revenue mainly comes from the sales of toys, including construction and role-playing toys, building blocks toys, and a small amount of non-toy revenue, including certain passive income related to advertising.
Bloks Group has established a comprehensive sales network, including (i) offline sales channels, including distribution and consignment sales, and (ii) online sales channels, including various e-commerce platforms. The company's sales channel focuses have shifted towards offline, and offline sales revenue has continued to increase.
Shareholder Structure
According to the prospectus, in the pre-listing shareholder structure of Bloks Group,
Mr. Zhu Weisong holds 50.90% and 4.05% through Next Bloks and Smart Bloks respectively, a total of 54.95%.
Mr. Sheng Xiaofeng holds 2.01% through ShawnXF Limited;
Mr. Huang Zheng holds 0.63% through Bloks Is Coming Limited;
The stock incentive plan holding platform First Prosperity holds 9.81%;
Source Code Capital, through BlueCo, holds 5.64%;
Lu Xin holds 0.10% through Dragon Ridge Limited;
Situ Jianxin and Su Qisheng hold 3.73% through Gaintex;
Gaorong Capital holds 1.19% through Gaorong BLK;
Insigma Technology, including Hangzhou Xinwang, Zhejiang University Network Technology(600797.SH), Zhejiang Network Technology, holds 0.58% through HFHI.
Wu Yongming holds 0.74% stake through Hongshan Limited;
Junlian Capital holds 6.72% and 0.31% stakes through Idea Great Limited and LC Fund, respectively;
Jinyi Investment holds 3.69% and 0.40% stakes through JYCP Holding and JYMB Holding, respectively;
Lenient (GP, controlled by Li Chunyong from LYCAON Capital) holds a 0.31% stake;
Fiona Wei holds a 0.76% stake through NAW;
Mr. Yao Rongjun holds a 1.01% stake through Way Elegance;
Yunfeng Fund holds a 3.15% stake through Yunfeng Blocks;
Beihai Junzhi Management Consulting holds a 1.01% stake;
Mr. Qi Daqing, an accounting professor at Cheung Kong Graduate School of Business, holds an 0.81% stake;
Sinomedia (00623.HK) holds a 2.46% stake.
Board of directors and executives
The board of directors of Blueco consists of seven directors, including:
2 executive directors: Mr. Zhu Weisong (Chairman and CEO) and Mr. Sheng Xiaofeng (President);
2 non-executive directors: Mr. Chang Kaishi and Mr. Chen Rui;
3 independent non-executive directors: Mr. Gao Pingyang, Ms. Huang Rong, and Mr. Shang Jian.
In addition to the executive directors, the management team includes: Mr. Xie Lei, Vice President; Mr. Huang Zheng, Vice President; Ms. Fu Yifang, Chief Financial Officer; and Mr. Zhu Yuancheng, Vice President and Company Secretary.
Corporate Performance
According to the prospectus, Blueco's revenue for 2021, 2022, 2023, and the first three months of 2024 was RMB 0.33 billion, 0.326 billion, 0.877 billion, and 0.466 billion, respectively, with corresponding net income of -0.507 billion, -0.423 billion, -0.207 billion, and 0.47 billion yuan, respectively, and corresponding adjusted net income of -0.356 billion, -0.225 billion, 0.073 billion, and 1.22 billion yuan.
Intermediary Team
The underwriting team for Blueco's IPO is mainly composed of Goldman Sachs and Huatai International as joint sponsors, Ernst & Young as auditor, Jingtian & Gongcheng and Freshfields Bruckhaus Deringer as Chinese and Hong Kong/US legal advisers, and King & Wood Mallesons and Davis Polk & Wardwell as Chinese and Hong Kong/US underwriters' legal advisers, respectively. Foster Sullivan serves as industry consultant.