Ultraman statues are a popular product made by Bloks Group, which had a strong performance in its initial public offering in Hong Kong on Friday.
Visual China Group (Getty Images)
Zhu Weisong's Bloks Group performed strongly after listing in Hong Kong, becoming China's latest billionaire.
Bloks' initial public offering in Hong Kong on Friday was 6,000 times oversubscribed, according to Forbes estimates, and the deal was so popular that it brought the 42-year-old chairman and chief executive $1.7 billion. USD wealth mainly comes from his shares in the company.
Bloks Group raised HK$1.7 billion (US$215 million) by selling 27.7 million shares at HK$60.35 each, the upper end of its previous sales range, to develop new products and expand marketing efforts. The retail portion of the offering was oversubscribed 6,000 times, triggering a clawback mechanism that caused the company to issue more shares to individual investors, according to a stock exchange filing.
The company's stock price rose 82% from the IPO price on its first trading day on Friday, then gave up some of its gains and closed up 54% as of 11:30 a.m.
Zhu left Chinese gaming company Youzu Information Technology about a decade ago to start his own toy company. Bloks makes Lego-like bricks and Ultraman statues.
Kenny Ng, an securities strategist at Everbright Securities in Hong Kong, said via WeChat that husband-and-wife investors may be looking for the next Bubble Mart as they compete for Bloks shares. Shares of Bubble Mart, also listed in Hong Kong, have risen more than 300% in the past year, helped by the popularity of its so-called “blind box” toys.
Blind box toys are collectible dolls sold in packaging that does not reveal the specific toy inside, giving buyers a sense of excitement when they open the box. According to “Forbes” estimates, the 38-year-old founder of Bubble Mart Wang Ning ranked among China's top 100 richest people for the first time in 2024, with a current net worth of US$7.2 billion. Bloks Group sells some of its products in blind boxes, according to its prospectus.
“Investors have high hopes for short-term returns from investing in Bloks Group,” Ng said. He added that the market is now very focused on toy companies selling collectible figurines.
The company did not respond to an emailed request for comment.
Zhu's entrepreneurial journey began in 2009, when he co-founded Shanghai-listed game developer Youzu Networks with entrepreneur Lin Qi. He served as the chief technology officer of Youzu.com until 2015, and left the company in 2016 to start from scratch.
Zhu got involved in the toy industry because of his experience shopping for his son. Unsatisfied with what he found, he saw an opportunity to make higher-quality toys and started Bloks, according to local media reports.
Initially, the company made Lego-like building blocks for young children. In 2022, the company launched construction dolls, toys that can be assembled from very small parts, which now account for the majority of its sales. The company entered into a non-exclusive agreement to produce and distribute products based on the Japanese Ultraman superhero characters, which are now Bloks Group's best-selling product lines.
In the first half of 2024, revenue increased by 238% year-on-year to exceed 1 billion yuan ($142 million). The prospectus showed that the loss amounted to 255 million yuan, an annual increase of 25.7%. Bloks Group has been losing money since at least 2021, the prospectus shows.
According to a research report on January 10, Aequitas Research analyst Clarence Chu published an article through the Smartkarma research platform saying that the company's rapid sales growth may justify its valuation.
But Everbright's Ng said turning a profit may still be a challenge.
“The company's current market value exceeds HK$20 billion, but it is still losing money,” he said. “The key is to actually generate profits because other toy manufacturers are making money.”
