Toymakers build fun Hong Kong stocks a playground
10/01/2025 12:00
(The author is a Reuters Breakingviews columnist. The opinions
expressed are her own.)
By Robyn Mak
HONG KONG, Jan 10 (Reuters Breakingviews) - Hong Kong's
long-dormant animal spirits have found a fun niche in an
otherwise gloomy market. Shares in Chinese toymaker Bloks
0325.HK surged 82% on their Friday debut, thanks to
overwhelming demand in the city. The $2 billion firm, which
specialises in assembling Transformers and other figurines, is
tapping into the country's collectible toy frenzy led by Hong
Kong-listed peer Pop Mart 9992.HK , whose stock clocked up a
blistering 360% gain in 2024. It's a welcome reminder that there
are still bright spots in the beaten-down economy.
Initial public offerings in the hub raised less than $6
billion last year, a fraction of 2020's record $32 billion haul,
per Dealogic data. China's sputtering economy and geopolitical
tensions with the United States are to blame - and look set to
deepen.
Bloks' blockbuster debut injects some much-needed cheer into
Hong Kong's market. Local mom-and-pop investors put in offers
for 6,000 times the amount of shares on offer, making the deal
one of city's most popular. That allowed the toymaker to price
at the top of the marketed range after increasing the amount of
shares sold. At the implied valuation of 24 times annualised
first-half 2024 adjusted net profit, Bloks commands a premium
over slower-growing global peers Hasbro HAS.O and Mattel
MAT.O . But it looks cheaper than the $15 billon Pop Mart,
whose shares trade at a 43 times multiple.
The toymakers showcase a booming trend in the People's
Republic referred to as "emotional consumption". Young
shoppers, faced with dim job and wage prospects, are eschewing
Louis Vuitton handbags and other luxury goods in favour of cheap
and cheerful products. These range from Pop Mart's Labubu
gremlin figurines and key chains, which count K-pop group
Blackpink's Lisa as a devoted fan, to premium lipsticks from Mao
Geping 1318.HK , whose stock popped 85% on its December debut
in Hong Kong. The consumption shift doesn't stop there: niche
hobbies like biking, hiking and camping are now on the rise,
boosting China sales at Amer AS.N , known for its Salomon and
Wilson brands, and Lululemon LULU.O . A little fun can do the
Chinese economy, and investors, some good.
Follow @mak_robyn on X
CONTEXT NEWS
Shares of Chinese toymaker Bloks rose 82% from their initial
public offering price in early trading on their Hong Kong debut
on Jan. 10.
The company raised HK$1.67 billion ($215 million) after
pricing at the top of the marketed range and increasing the
amount of shares sold. Local retail investors bid 6,000 times
the amount of shares on offer.
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Graphic: China's collectible-toy mania takes over Hong Kong https://reut.rs/3C2yCxo
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(Editing by Antony Currie and Ujjaini Dutta)
((For previous columns by the author, Reuters customers can
click on MAK/
robyn.mak@thomsonreuters.com))