As the market share leader in China's construction character toy segment, BLOKS achieved a significant improvement in book profit over the past year. In 2025, the company generated revenue of 2.913 billion yuan, a year-on-year increase of 30.0%. Annual profit reached 634 million yuan, marking a substantial turnaround from a loss in the previous year. However, there remains a notable gap between the true quality of this "turnaround to profitability" and market expectations for it to become the "Chinese LEGO."
In 2024, the company reported a loss of nearly 400 million yuan, primarily due to fair value changes of convertible redeemable preferred shares before its listing and one-time listing expenses. Following its successful IPO in 2025, such non-cash gains and losses ceased. However, after excluding this factor, the adjusted annual profit—which better reflects actual operational performance—increased by 15.5% year-on-year, significantly lower than the 30% revenue growth rate.
A key reason for this discrepancy is the decline in gross profit margin resulting from product mix adjustments. In 2025, the company's gross margin fell from 52.6% to 46.8%, a drop of nearly 6 percentage points. During this period, BLOKS aggressively promoted products with extreme value-for-money. A series retailing at 9.9 yuan contributed 541 million yuan in revenue, with sales volume reaching 122 million units, accounting for 47.8% of total sales volume.
This low-price expansion appears more like a defensive move. Currently, in the adult and trendy toy segment, Pop Mart continues to capture high-margin customer groups with its original IPs. In the general retail sector, TOP TOY has established a presence with its "Chinese building blocks" identity. Furthermore, niche players like Rolife are diverting consumer demand in the model and aesthetic construction segments. While the competitive landscape remains unsettled, the "Chinese LEGO" label assigned to BLOKS in the capital market is still prominent.
However, analyzing the underlying logic of its business model reveals that BLOKS' path differs significantly from LEGO's. First is the difference in production models. LEGO relies on its own factories worldwide and high-precision mold assets, building a highly vertically integrated supply chain system. Its mold manufacturing precision is strictly controlled within 5 micrometers, ensuring that bricks produced decades ago can still seamlessly connect with today's products. It is also rumored that LEGO never outsources mold R&D and maintenance, with all scrapped molds being cast into factory foundations, fundamentally preventing the risk of design and technology leakage. In contrast, BLOKS currently primarily adopts a "light-asset" outsourced production model, collaborating with six third-party manufacturers for production. According to its plans, its first self-owned factory is expected to be completed and operational by the end of 2026.
Second is the significant difference in IP models. LEGO's core barrier lies in its deep development capabilities for original series and top-tier movie IPs. BLOKS, however, exhibits characteristics more akin to an "IP commercialization platform," with its growth heavily reliant on externally licensed IPs. In 2025, the four major series—Transformers, Ultraman, Kamen Rider, and Hero Universe—contributed the vast majority of revenue. The IP matrix became more balanced, with the Transformers series generating 951 million yuan in revenue, surpassing Ultraman for the first time to become the top revenue-generating IP. Although the self-developed IP "Hero Universe" contributed 264 million yuan, licensed IP sales still accounted for a high 88.5% of revenue. While this model leverages established IPs for rapid customer acquisition, it also exposes the company to systemic risks such as license expirations, rising renewal costs, and the absence of exclusivity clauses.
Expanding overseas is a critical part of BLOKS' strategy to break through growth ceilings. In 2025, its overseas revenue reached 319 million yuan, a substantial year-on-year increase of 396.6%, with the United States and Indonesia becoming key growth markets. However, BLOKS' current international expansion is more characterized as "channel expansion"—distributing through international retailers like Amazon, Walmart, and Target—rather than establishing a strong global, self-owned content community and direct-to-consumer brand presence.
Currently, consumers aged 16 and above contribute 16.7% of revenue, showing some signs of breaking into broader demographics. But to benchmark against global toy giants, BLOKS still needs to find a path beyond merely "Chinese manufacturing value-for-money" by developing the vitality of its own IPs, achieving cost reduction and efficiency gains through self-owned factories, and building brand recognition in its globalization process.
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