Chinese Toy Entrepreneur Zhu Becomes Billionaire After Frenzied IPO

Zhu Weisong is China’s newest billionaire after a strong market debut of his Bloks Group in Hong Kong.

Bloks’ Hong Kong initial public offering Friday was 6,000 times oversubscribed and wildly popular after trading began, giving Zhu, the 42-year-old chairman and CEO, a fortune of $1.7 billion mostly based on his stake in the company, according to Forbes estimates.

Bloks Group raised HK$1.7 billion ($215 million) by selling 27.7 million shares at HK$60.35 apiece, or the top end of a previously marketed range, to develop new products and expand marketing efforts. The retail portion of the share sale was 6,000 times oversubscribed, triggering a claw-back mechanism that led the company to offer more shares to individual investors, according to a stock exchange filing.

The company’s shares jumped as much as 82% from their IPO price in their first trading day Friday, before paring some of the gains to end 54% higher as of 11:30 a.m.

Zhu left Chinese gaming company Yoozoo Information Technology almost a decade ago to establish his own toy company. Bloks makes Lego-like building blocks and Ultraman figurines.

Mom-and-pop investors might be looking for the next Pop Mart as they scramble for Bloks shares, says Kenny Ng, a Hong Kong-based securities strategist at Everbright Securities, by WeChat. Also listed in Hong Kong, Pop Mart shares have jumped more than 300% over the past year thanks to the popularity of its so-called “blind box” toys.

Blind box toys refer to collectible figurines sold in packaging that doesn’t reveal the exact toys inside, giving buyers a sense of excitement when they open the box. Pop Mart’s 38-year-old founder Wang Ning, who joined the ranks of China’s 100 Richest for the first time in 2024, now has a net worth of $7.2 billion, according to Forbes estimates. Bloks Group sells some of its products in the blind box format, according to its prospectus.

“Investors have high hopes of generating short-term returns by investing in Bloks Group,” Ng says. He adds that the market is now paying a lot of attention to toy companies that sell collectible figurines.

The company didn’t respond to e-mailed requests for comment.

Zhu’s entrepreneur journey started in 2009, when he cofounded Shanghai-listed games developer Yoozoo with late entrepreneur Lin Qi, who died after allegedly being poisoned by a colleague. He was Yoozoo’s chief technology officer until 2015, leaving the company in 2016 to start something from scratch.

Zhu ventured into toys because of his experience shopping for his son. Unsatisfied with what he could find, he spotted an opportunity to make higher quality toys, according to local media reports, and started Bloks.

Initially the company made Lego-like building blocks for younger children. In 2022 it launched assembly figurines, or toys that can be assembled from very small parts, which now account for most of its sales. The company has a non-exclusive deal to make and distribute products based on Japan’s Ultraman superhero characters, which are now Bloks Group’s best-selling product line.

In the first half of 2024, revenues soared 238% year-on-year to over 1 billion yuan ($142 million). Losses reached 255 million yuan, up 25.7% from the same period a year earlier, according to its prospectus. Bloks Group has been in the red since at least 2021, its prospectus shows.

Clarence Chu, an analyst at Aequitas Research who publishes via the Smartkarma research platform, says the company’s rapid growth in sales might justify its valuation, according to a Jan 10 research note.

But turning a profit might remain a challenge, says Everbright’s Ng.

“The company now has an over HK$20 billion market capitalization, but it is still loss making,” he says. “The key is really generating a profit as the other toy makers are all making money.”