9.9 yuan toys sold out, Shaoxing boss earns over 600 million yuan annually, but Brucdo stock price drops back to IPO price

This article is sourced from Times Finance. Author: Wu Jiamin and Li Qian.

Image source: Visual China

Once ranked as the second “Frozen Capital King” in Hong Kong stocks, Blueko has delivered its first-year earnings report.

On the evening of March 13, Blueko Group Limited (00325.HK), a company specializing in role-playing building block toys, released its 2025 annual financial report. In 2025, the company’s revenue reached 2.913 billion yuan, a 30% increase year-over-year; net profit was 634 million yuan, turning a profit from the previous year.

Despite turning a profit, Blueko’s profitability declined. In 2025, the company’s adjusted net profit margin dropped from 26.1% in 2024 to 23.2%. Meanwhile, sales costs increased by 45.9% year-over-year, outpacing the 30% revenue growth, leading to a gross profit margin decrease from 52.6% to 46.8%.

Founded in 2014 by Zhu Weisong, a post-80s native of Shaoxing, Blueko started with the design, R&D, and sales of building block toys. In 2021, Blueko obtained licensing for the well-known IP Ultraman and launched role-playing building block toys, quickly gaining market share and earning the nickname “China’s Lego.”

In January 2025, Blueko listed on the Hong Kong Stock Exchange, with over 6,000 times oversubscription before listing. At that time, the amount of frozen capital exceeded that of Miao Geping, the “top beauty stock” listed in 2024, making it the second-largest frozen capital in Hong Kong stock history.

According to the prospectus, Blueko completed three rounds of financing before going public, raising nearly 1.8 billion yuan in total. Star investors such as Yunfeng Fund, Junlian Capital, and Source Capital also participated.

However, just one year after listing, the stock price approached the issue price. Why did capital retreat after the surge in oversubscription?

Net profit of 600 million yuan, turning a profit without selling toys?

With the rise of the “Guzi economy,” toy and trendy toy brands like Blueko and Pop Mart have been favored by capital in Hong Kong stocks since 2023, with their performance and stock prices soaring.

In 2023 and 2024, Blueko recorded revenues of 877 million yuan and 2.241 billion yuan, with year-over-year growth rates of 169% and 156%. However, after listing, Blueko did not sustain these high growth rates. In 2025, revenue growth slowed to 30%.

Looking at different segments, in 2025, revenue from role-playing building block toys and vehicle-building toys was 2.843 billion yuan and 69.81 million yuan, with growth rates of 29.15% and 77.05%, respectively. In comparison, in 2024, revenue from role-playing building block toys grew by 186.2%.

According to financial data, in 2025, the company’s adjusted net profit margin decreased from 26.1% in 2024 to 23.2%, a decline of 2.9 percentage points. In contrast, in 2024, annual adjusted profit increased by 702.1% to 585 million yuan, with the adjusted net profit margin rising by 17.8 percentage points to 26.1%.

High sales costs have become a factor eroding profits. In 2025, sales costs reached 1.549 billion yuan, up 45.87% year-over-year, exceeding 30% revenue growth. The financial report explains that the surge in costs was partly due to a 41.6% increase in the cost of goods sold driven by higher sales volume, and partly due to increased depreciation from new SKUs, which rose by 120.6%.

According to Times Finance calculations, Blueko’s gross profit margin fell from 52.6% in 2024 to 46.8% in 2025, a decline of over 5 percentage points.

In 2025, the company’s selling and distribution expenses increased by 36.62% to 387 million yuan, including an additional 37.7 million yuan spent on marketing and promotion. R&D expenses also rose by 37.34% to 264 million yuan.

While facing challenges in core profitability, the company achieved a turnaround in performance. One key reason may be the fair value change of the company’s convertible redeemable preferred shares. In 2024, the fair value of these preferred shares was -542 million yuan. After listing in 2025, the preferred shares were converted into common stock, and this item no longer caused further fluctuations or appeared on the income statement.

Additionally, in 2024, Blueko’s administrative expenses were as high as 465 million yuan, mainly due to a one-time stock-based compensation of 359 million yuan related to share incentive plans granted in April 2024. In 2025, administrative expenses decreased by 78.9% to 98 million yuan.

Seventy percent of revenue depends on licensed IP, with products priced at 9.9 yuan sold in over 100 million units

Despite turning a profit, Blueko, just one year after going public, faces challenges.

Over the past year, Blueko has continued to expand its IP matrix and overseas markets.

In 2025, sales from the Chinese market increased by 19.2% to 2.594 billion yuan from 2024’s 2.177 billion yuan; overseas sales grew from 64.2 million yuan in 2024 to 319 million yuan in 2025, a 396.6% increase. The United States and Indonesia are the largest overseas markets for Blueko. However, overseas revenue accounts for only 11% of total sales. In the global building block toy market, Blueko still lags behind Lego and Bandai in market size.

With the number of proprietary IPs stagnating, Blueko still relies heavily on expanding licensed IPs to attract global consumers. By the end of 2025, the company owned 2 self-developed IPs, up from 50 licensed IPs as of December 31, 2024.

As a toy company once heavily reliant on Ultraman IP, the dependence on licensed IPs remained significant in 2025.

In 2025, the combined revenue from the Transformers, Ultraman, Kamen Rider, and Hero Unlimited series accounted for 80.4% of total revenue. Among them, Hero Unlimited is the only self-developed IP, generating 264 million yuan, or 9.1% of total revenue. The other three core series are licensed IPs, collectively accounting for over 70%.

Moreover, unlike products from Lego and Pop Mart that target all age groups, products for ages 6 to 16 remain the main revenue source for Blueko, accounting for 81.1% of total revenue. This also keeps the company’s mainstream price range relatively low.

Notably, at the end of 2024, Blueko launched products priced at 9.9 yuan. The financial report shows that in 2025, sales of these low-priced products reached 541 million yuan, with 122 million units sold, accounting for 47.8% of total sales. However, the low price further squeezed profit margins. On March 14, Times Finance checked its Taobao flagship store and found the lowest price for on-sale products was 12.9 yuan, with other main building block toys priced between 16.9 yuan and 79 yuan.

As of the close on March 13, Blueko’s stock price was 61.25 HKD per share, approaching the IPO issue price of 60.35 HKD. Since listing in January 2025, the stock reached a mid-year high of about 198 HKD per share. However, it then declined, and in March this year, the stock price briefly fell below the issue price.

In the capital market, whether Blueko’s core business is healthy and whether the company’s profitability can be sustained remain key concerns. The rising costs of IP licensing renewals, whether the 9.9 yuan low-price strategy can be maintained long-term, and whether proprietary IPs can gain consumer recognition and willingness to pay—all these factors further test Blueko’s core competitiveness. On March 14, Times Finance sent an interview request to Blueko, but had not received a response as of press time.