BLOKS Group is looking to raise as much as HK$1.46 billion (S$225 million) in a Hong Kong initial public offering (IPO), as the Chinese toy maker aims to ramp up product development and output while cashing in on the reviving IPO market.
Bloks will be selling a total of 24.1 million shares, priced between HK$55.65 and HK$60.35 each, according to a regulatory filing made on Tuesday (Dec 31).
The deal will raise between HK$1.34 billion and HK$1.46 billion, and the shares sold will represent 10 per cent of the company’s total shares, the filings showed.
Shanghai-based Bloks, which assembles the Ultraman and Transformer toys, will use the proceeds from the IPO to complete its self-operated factory in 2026 and hire 400 additional employees.
Bloks is China’s largest player in the assembly character toy segment, according to a report it commissioned to consultancy firm Frost & Sullivan.
The listing plans come while there look to be green shoots of recovery in the Hong Kong IPO market following an extended downturn period over the last few years.
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Local cosmetics firm Mao Geping recently raised US$300 million in its oversubscribed Hong Kong IPO, while courier group SF Holding raised US$749.3 million.
Bloks reported a first-half loss of 254.9 million yuan (S$47.5 million) while posting 1.05 billion yuan in revenue, more than triple from a year ago.
Xinyao (Criss) Wang, an analyst at Smartkarma, said the latest pre-IPO valuation for Bloks has reached 7.2 billion yuan but should be lower than global toy designer Pop Mart.
“Bloks’ business model is more similar to Pop Mart, rather than LEGO, but Bloks’ profitability is lagging behind both of them,” added Wang and also flagged that Bloks’ current high revenue growth may not be sustainable.
LEGO is a privately-held Danish toy company.
Goldman Sachs and Huatai International are joint bookrunners on the offering. REUTERS
