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Shares in Bloks Group, a maker of Transformers and other toy figurines, as much as doubled on their Hong Kong debut on Friday, making a billionaire of their founder and underlining the surge in ‘kidult’ culture despite falling birth rates in the world’s second-largest economy.
Shares in the Chinese toymaker rose as much as 82 per cent on their secondary listing debut in Hong Kong, before closing up 41 per cent, valuing founder Weisong Zhu’s stake at more than US$1bn. The listing, priced at HK$60.35, raised US$215mn for the Shanghai-based company.
The successful offering represents a boost for Hong Kong’s IP0 market and another example of mainland Chinese companies seeking to raise capital in the territory following secondary listings by groups, including appliance maker Midea and delivery service SF Holding.
Analysts said Bloks’ achievement highlighted a ‘kidult’ cultural moment where young adults were seeking to rediscover their childhood and toymakers increasingly sought to cater to older demographics.
Retailers that sell pop-culture toys, including collectibles from toymaker Pop Mart, have become high-flying stocks in the market, as “a proxy for Chinese consumption growth, especially among the younger generations”, said Wang Qi, chief investment officer for wealth management at UOB Kay Hian in Hong Kong.
“Retail demand was hot because it’s a consumer deal and a known name, just like Maogeping [a Chinese cosmetics company that went public in Hong Kong last December],” said Jean Thio, capital markets partner at Clifford Chance, which advised on the IPO.
The listing was heavily oversubscribed for its Hong Kong allocation, as well as its international portion, according to documents filed with the Hong Kong stock exchange.
Yet Bloks Group has made a loss since at least 2021, according to its unaudited financial information in its IPO prospectus, with a pre-tax loss of Rmb203,000 in its 2024 fiscal year.
China’s toy market was worth Rmb159.8bn ($21.8bn) in 2023, according to a recent report from Daxue Consulting, which highlighted the rise of so-called “pop toys” inspired by popular culture. The consultancy pointed to growing demand from Gen Z consumers, including young adults, as a driver for the sector.
Market research group IMARC expects the market to grow 9.3 per cent a year to hit $47.4bn in 2032.
Enthusiasm for the toy market comes amid a demographic slowdown in China which has seen the number of newborns fall sharply, as well as a wider loss of consumer confidence against the backdrop of a weak property sector. Xi Jinping last month said “vigorous” efforts would be made to boost domestic demand.
Hong Kong shares of Pop Mart were up 328 per cent over the past 12 months, beating most members of the MSCI China Index. It also easily outperformed China’s benchmark CSI 300 index, which posted a 14 per cent gain over the same period.
Mainland China has seen the number of IPOs plummet in the past year, though a host of new listings from the mainland are expected for Hong Kong, which last year saw its IPO tally increase.
Battery maker CATL plans to launch a secondary listing in Hong Kong, although its inclusion on a Pentagon watch list for its links to the Chinese military may be a setback for its US backers.
