(Picture source: Visual China)

The wind of the Goods Economy has continued into 2025, and the first wave of heat has hit the Hong Kong stock market as the year begins.

On January 10, the building block character toy brand Bluegog (0325.HK), known as the 'Chinese version of LEGO,' officially listed on the Main Board of the Hong Kong Stock Exchange with an issue price of 60.35 HKD per share. It opened over 80% higher, reaching 109.6 HKD per share, and closed up by 40.85% at 85 HKD per share, with a total Market Cap of 20.5 billion HKD.

With a valuation increase of tens of billions, former Yoozoo veteran Zhu Weisong has secured another IPO.

Founded in 2014, Bluegog is the largest building block character toy company in China and the third largest globally. According to Frost & Sullivan, Bluegog achieved approximately 1.8 billion yuan in GMV in 2023, a year-on-year growth of over 170%, making it the fastest-growing scaled toy company in the world.

Behind Bluegog is the serial entrepreneur Zhu Weisong, who was also involved in founding Yoozoo Interactive (002174.SZ). After Yoozoo Interactive successfully went public through a reverse merger in 2014, Zhu Weisong established his own company, Bluegog.

Currently, Zhu Weisong's holding ratio is approximately 54.95%. Based on the issue price, the market value of the shares held by Zhu Weisong exceeds ten billion HKD.

Zhu Weisong led the team and secured investments from several well-known Institutions. Since its establishment, Blokus has completed three rounds of financing. In 2018, the company raised 0.857 billion yuan in an angel round, with Lin Qi, a 'old partner' who co-founded Yoozoo Interactive, contributing a significant 0.1 billion yuan, along with individual investors such as Chen Weirui and Qi Dahong, as well as financing parties like Jinyi Chuangpin, Bowen Investment, Zheyi Investment, and Junjin Investment.

In 2020, Blokus completed a 0.33 billion yuan Pre-A round financing, introducing Source Code Capital, Junlian Capital, and Gao Rong Venture Capital; in 2021, nearly 0.6 billion yuan in A round financing was led jointly by 'Alibaba's' Yunfeng Fund and Junlian Capital, with Source Code Capital, Gao Rong Venture Capital, and some original Shareholders participating, raising a total of 1.787 billion yuan with a valuation exceeding 7 billion yuan.

Before the filing, in April 2024, Zhu Weisong transferred equity to five investors through his wholly-owned Smart Bloks, totaling 2.3501 million shares and costing about 75.8384 million yuan. Additionally, Gaorong BLK Holding Limited, under Gao Rong Capital, also transferred 0.8953 million preferred shares for about 28.8908 million yuan.

Prior to the IPO, Zhu Weisong held a 54.95% stake, making him the actual controller of the company. Junlian Capital holds 7.03%; Source Code Capital holds 5.64%; Yunfeng Fund holds 3.15%; Gao Rong Venture Capital holds 1.19%.

Blokus's IPO received 6,000 times subscription during the offering process and introduced three cornerstone investors, including Jinglin Asset Management Hong Kong Limited, UBS AM Singapore, and Wells Fargo Fund Management Limited, as well as Wells Fargo Asset Management (Hong Kong) Limited, with a total subscription of 50 million USD.

The next POP MART? Can 'Ultraman' help create another miracle.

Many people in the Capital Markets benchmark Blokus against POP MART.

On December 11, 2020, POP MART was successfully listed on the Hong Kong Stock Exchange, opening with a Market Cap exceeding 100 billion HKD. By the close of the same day, it had risen by 79.22%, closing at 69 HKD per share. This time, Blokus, riding the wave of the 'Goods Economy', is expected to replicate the performance of POP MART on its first day of listing.

Currently, Blucome's toy products are mainly divided into two categories: "building character toys" and "block toys." Between 2016 and 2021, Blucome's products were primarily focused on block toys. In 2021, the company obtained the authorization for "Ultraman" in China and began selling "building character toys," leading to a surge in performance.

According to the prospectus, from 2021 to 2023 and in the first half of 2024, Blucome recorded revenues of 0.33 billion yuan, 0.326 billion yuan, and 0.877 billion yuan respectively; adjusted period profits were -0.356 billion yuan, -0.225 billion yuan, 72.882 million yuan, and 0.292 billion yuan. Most of the company's revenue comes from "Ultraman," which accounted for 63.5% and 57.4% of total revenue in 2023 and the first half of 2024 respectively.

In terms of product pricing, Blucome's mainstream products are priced between 19.9 yuan and 399 yuan. In 2023, the average selling price of "building character toys" was 21 yuan. After shifting from "block toys" to "building character toys," Blucome saw a significant increase in gross margin. From 2021 to 2023, Blucome's gross margins were 37.4%, 37.9%, and 47.3%, with the gross margin of "building character toys" at 48.4% in 2023, while "block toys" only had a gross margin of 38.7%.

As of March 31, 2024, Blucome had over 30 Licensed Intellectual Properties (IPs), including well-known IPs such as Ultraman, Transformers, Naruto, Minions, Detective Conan, and Hello Kitty, with a total of 227 SKUs based on licensed IPs available for sale. From 2022 to March 2024, revenue from licensed IPs was 0.116 billion yuan, 0.705 billion yuan, and 0.382 billion yuan, accounting for 98.4%, 91.7%, and 84.2% of the building character toys revenue respectively.

However, to acquire IP licenses, Blucome's capital expenditures have been increasing year by year. From 2021 to 2023, the costs for acquiring intangible assets were 7.815 million yuan, 5.7 million yuan, and 19.03 million yuan, mainly used for purchasing licensed IPs. Although Blucome's IP licensing fees are far lower than the 0.236 billion yuan licensing costs of POP MART (9992.HK) in 2023, its gross margin remains below the 61.3% level of POP MART due to the smaller revenue scale.

The net proceeds from this fundraising event for Blucome are 1.557 billion Hong Kong dollars, and the funds raised will primarily be used to enhance research and development capabilities related to product design and development; further enrich the IP matrix; and invest in core production resources, focusing on self-owned scaled factories for building character toys.