20250104

The recent hot IPO $BLOKS(00325.HK) was oversubscribed by over 4,440 times, with margin financing reaching approximately HK$650 billion. Is it really that strong? Should we subscribe? Bubble Dragon will analyze it for everyone:

BLOKS' business:

China's leading role-playing toy brand, with major licensed IPs including Ultraman and Transformers, as well as its own IPs "BLOKS" and "Hero Unlimited".

Highlights:

• Transitioned to building block business in 2023, with revenue CAGR of 63% from 2021-2023, and 237.6% in H1 2024!

• Adjusted profit of RMB292 million in H1 2024, up 300.9% YoY! Still in rapid growth phase

• Aligns with the popular "Guzi" economy concept

• After IPO reform, subscription costs have dropped significantly, this stock's popularity will explode

Risks:

• Ultraman and Transformers licenses mainly expire in 2027 and 2028, renewal risks exist

• Own IPs "BLOKS" and "Hero Unlimited" seem less popular

• May not get allocation due to high popularity, could lose on fees and interest expenses

Conclusion: Must subscribe!!!

• Bubble Dragon has applied for the tail-end of Group A

• Probability of opening higher on first day estimated at over 99%! Personally conservatively expect 20-30% gain

• Biggest risk is losing on fees

• One lot costs about HK$18,000

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Disclaimer: I am not licensed by the SFC of Hong Kong. The content is purely personal sharing and not investment advice, nor does it constitute any offer, solicitation or recommendation of any investment products.

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