Sold 122 million units! Post-80s Shaoxing boss creates the "Chinese version of LEGO," earning 600 million annually

(Source: Chief Business Think Tank)

Author | Zeng Youwei

As the 9.9 yuan alternative becomes mainstream, the “Chinese Lego” supported by Ultraman with a market value of hundreds of billions may find it difficult to sustain its profitability myth.

In January 2025, when Blokus landed on the Hong Kong Stock Exchange, its achievements were quite impressive, with oversubscription exceeding 6000 times, and the frozen capital amount at one point surpassed that of the “first beauty stock” Mao Geping, becoming the second-largest “frozen capital king” in Hong Kong stock history.

With the support of star investors like Yunfeng Fund, Junlian Capital, and Source Code Capital, Zhu Weisong from Shaoxing, born in the 1980s, took ten years to transform a building toy company into a darling of the capital market.

At that time, Blokus was highly anticipated, and the title of “Chinese Lego” was somewhat well-known in the entire toy industry. The support from the Ultraman IP was strong enough, and the headwinds of the grain economy were robust. After going public, the stock price once reached 198 Hong Kong dollars, and everything seemed so smooth.

However, just a year later, the stock price plummeted. On March 13, 2026, Blokus released its first-year financial report after going public, with revenue of 2.913 billion yuan, a year-on-year growth of 30%, and an annual profit of 633 million yuan, achieving a turnaround.

Compared to the impressive report card, Blokus’s stock price was not so rosy, showing a downward trend throughout March.

On March 13, Blokus’s stock closed at 61.25 Hong Kong dollars, approaching the issuance price of 60.35 Hong Kong dollars, a drop of nearly 70% from its peak of 198 Hong Kong dollars.

The capital market voting with its feet is not without reason; underlying concerns lie in the data within the financial report. Firstly, there is the sales cost, which, compared to the revenue growth of 30%, saw a growth rate of 45.9%, far exceeding the revenue increase.

Looking at the adjusted net profit margin, it contrasts with the simultaneous growth of revenue and gross profit, as this metric actually showed a downward trend, falling from 26.1% in 2024 to 23.2% in 2025.

Meanwhile, the revenue structure is also extremely unreasonable, with over 70% of revenue still relying on licensed IP, while self-owned IP is almost negligible.

What is even more concerning is that the 9.9 yuan affordable product launched at the end of 2024 sold 122 million units in 2025, accounting for 47.8% of total sales.

In this situation, selling more means earning less. Is this a strategic choice to expand the market, or a helpless move forced by low-price competition? We cannot know.

What we see is that the once highly sought-after “oversubscription king” Blokus saw its stock price drop to near the issuance price in just one year. This once-promising “Chinese Lego” has clearly lost its previous momentum.

Selling 1.22 million units at 9.9 yuan

What’s next?

To understand why Blokus’s development has taken a sharp turn, we must start from the series of products launched at the end of 2024.

At the end of 2024, Blokus launched a line of affordable products priced at just 9.9 yuan, intended to broaden sales channels and expand into lower-tier markets, and indeed, the results matched Blokus’s expectations.

In 2025, the sales of products in this price range reached 541 million yuan, with cumulative sales of 122 million units, accounting for 18.6% of total revenue.

In the context of the overall toy market, these sales are quite good, but the cost is not small.

Based on the 541 million yuan revenue and 122 million units sold, the actual average price of products in the 9.9 yuan range is only 4.43 yuan, meaning that most products were sold at a discount below 9.9 yuan, with channel promotions, platform subsidies, and clearing inventory all lowering the actual transaction price.

The first consequence of selling products at low prices is the decline in overall gross profit margin. Financial reports show that in 2025, Blokus’s overall gross profit margin was 46.8%, down 5.8 percentage points from 2024, considering that sales of 9.9 yuan products accounted for nearly half of the total; this 5.8 percentage point decline was likely driven by low-priced products.

The more troublesome issue is that the low-price strategy is changing consumer psychological expectations. When 9.9 yuan becomes the norm, will consumers still be willing to pay for products priced at 39 yuan or 59 yuan?

When products featuring core IPs like Ultraman and Transformers can be bought for “cabbage prices,” how can brand premiums be maintained?

Opening Blokus’s Taobao flagship store, the lowest priced product is 12.9 yuan, and the main product price range concentrates between 16.9 yuan and 100 yuan. This price range is cheaper than Lego but more expensive than domestic knockoff brands. In this light, Blokus is caught in an awkward middle ground, unable to reach Lego’s brand premium while also unable to compete with the extreme low prices of counterfeit manufacturers.

Zhu Weisong, who left Youzu Network to venture into entrepreneurship, originally did not intend to struggle in the quagmire of 9.9 yuan low prices, but the reality is that once the low-price strategy is initiated, it is hard to extricate oneself. Whether Blokus can emerge from this quagmire in 2026 remains an unresolved dilemma.

Turning losses into profits!

Where does the profit come from?

Under such a drastic low-price strategy, Blokus still managed to turn losses into profits; where did this profit come from?

First, looking at the financial report, Blokus’s revenue in 2025 increased by 30% year-on-year, and its net profit turned from a loss of 398 million yuan in the same period of 2024 to profitability, which seems flawless at first glance.

However, upon closer examination, problems arise.

In 2024, Blokus’s administrative expenses reached 465 million yuan, primarily due to the issuance of stock options based on the equity incentive plan in April, which resulted in a one-time share-based compensation expense of 359 million yuan. This one-time expenditure significantly raised the loss baseline for 2024, and by 2025, administrative expenses decreased by 78.9% to 98.08 million yuan, returning to normal levels.

Another key factor was the change in the fair value of convertible redeemable preferred shares. In 2024, this item caused Blokus to incur a book loss of 541 million yuan. After going public in 2025, preferred shares converted to common stock, and this item no longer generated further changes or was included in the profit statement.

These two sources of income combined made Blokus’s profit statement look much better, in other words, the turnaround in 2025 was largely not due to a substantial improvement in the profitability of core business operations.

The metrics that truly reflect the profitability of the main business, however, were not ideal, as the adjusted net profit margin decreased by 2.9 percentage points year-on-year, and the gross profit margin dropped by more than 5 percentage points.

On one hand, the increased proportion of low-priced products lowered the overall average price; on the other hand, the substantial rise in sales costs led to a decline in gross profit margin. Blokus’s profit model is under dual pressure, facing challenges from both sides.

Highly dependent on IP

How long can Ultraman hold on?

Blokus’s growth fundamentally hinges on the support of the Ultraman IP.

In 2021, Blokus obtained the licensing rights for the Ultraman IP, launching building character toys and quickly opening up the market. That year, the Ultraman IP single-handedly supported Blokus’s explosive growth. It can be said that the revenue growth in 2023 and 2024 was largely thanks to Ultraman.

The 2025 financial report shows that the income generated from the four major series of products—Transformers, Ultraman, Kamen Rider, and Hero Infinite—were 950 million, 810 million, 330 million, and 260 million yuan respectively, accounting for 80.4% of total revenue.

Among them, Hero Infinite is the only self-developed IP, generating 9% of total revenue, while the other three core series are all licensed IPs, with their combined revenue share exceeding 70%.

In other words, more than 70% of Blokus’s revenue is controlled by others.

The business model of licensed IP inherently carries fragility: IP licenses are generally signed for 3-5 years, with uncertainty in renewal, and the renewal costs typically increase year by year. Competitors may also emerge midway to intercept the IP at a high price, especially for top-tier IPs like Ultraman and Transformers, which are highly contested in the industry.

Blokus is clearly aware of this issue, as by the end of 2025, the number of licensed IPs the company held increased from 50 in 2024 to 73, with new additions including Toy Story, Zootopia, and Frozen. This broad-net strategy indeed diversifies the risk of single IP dependency, but it ultimately addresses the symptoms rather than the root cause.

To stabilize the revenue base, self-developed IP must still be relied upon. By the end of 2025, Blokus had only two self-developed IPs: the child-oriented “Transformable Blokus” and the culturally themed “Hero Infinite.”

However, based on current performance, neither of these IPs has managed to shoulder the revenue burden; they still show a significant gap compared to popular licensed IPs.

Without self-owned IP, there is no pricing power, and thus no brand premium, not to mention a brand moat. This is the core issue facing Blokus.

The path to the sea

It looks beautiful

In 2025, Blokus not only performed well in the Chinese market but also excelled in overseas business, delivering an impressive report card with overseas sales revenue of 318 million yuan, a year-on-year increase of 396.6%.

Among them, the Americas market grew by 804.1%, and Asia (excluding China) grew by 238.1%, with the United States and Indonesia being the two countries with the highest overseas market revenue.

From the data, it is evident that overseas expansion is indeed accelerating; however, looking more calmly, the 319 million yuan in overseas revenue accounts for only 11% of total revenue. In other words, Blokus still heavily relies on the Chinese market, and its overseas business has yet to take shape.

Another concern regarding overseas expansion is cost. Entering new markets requires significant marketing resources, product design that adapts to local consumers, and the establishment of new distribution networks.

In 2025, Blokus’s sales and distribution expenses increased by 36.6% year-on-year to 386 million yuan, with marketing and promotion expenses rising by 37.7 million yuan, largely as a cost of overseas expansion.

More critically, in the global building toy market, Blokus’s competitors are giants like Lego and Bandai. Lego has nearly a century of brand accumulation, a global channel network, and countless classic self-owned IPs.

Bandai has top-tier IPs like Gundam, Dragon Ball, and One Piece, with decades of fan accumulation, while Blokus’s only self-owned IP worth mentioning is Hero Infinite. How can it compete with them?

In the financial report, Blokus stated that it plans to focus on deepening its expansion in North America and Europe in 2026. The ambition is indeed commendable, but the difficulty is immense. Competing for market share in Lego’s stronghold requires not just determination, but also strength.

In conclusion

Blokus’s story is a typical example of Chinese-style entrepreneurship, with a founder from the 1980s, coming from the gaming industry, crossing over to the toy sector, seizing the IP trend, rapidly scaling up, and attracting capital for an IPO. However, going public is just the beginning of the test.

In one year, from “oversubscription king” to stock price nearing the issuance price, the capital market has cast its vote with its feet. The core issue is clear: over 70% of revenue depends on licensed IP, while self-owned IP accounts for a negligible share. Selling over a billion units of 9.9 yuan low-priced products resulted in a five-point drop in gross profit margin, and while overseas expansion grew quickly, it accounts for less than 10% of total revenue.

None of these issues are easy to solve. The costs of IP renewal will only rise, the low-price strategy, once initiated, is hard to reverse, and the overseas market must contend with giants like Lego and Bandai. What Blokus needs to do is not just continue telling stories, but to solve these real problems.

When Zhu Weisong left Youzu Network, he undoubtedly had greater ambitions, but making toys is different from making games; a game can become a hit overnight, while toys require a slow accumulation of brand and IP. Lego took nearly a century to reach today, while Blokus has only been around for ten years. The road ahead is still long.

The turnaround in 2025 is a good start, but that’s all it is. The real test lies in 2026, 2027, and beyond… When the marginal effect of the Ultraman IP diminishes, whether Blokus can rely on self-owned IP and brand premiums to sustain growth will be the key to determining whether it can become the “Chinese Lego.”