How AI · Brico Can Turn Losses Around Using US IP Addresses?

Original First Published | Jinjiao Finance (ID: F-Jinjiao)

Author | Chester

“China’s LEGO” has finally risen.

As China’s largest building block toy company, Brico has delivered a turnaround financial report: for fiscal year 2025, revenue reached 2.913 billion yuan, a 30% increase year-over-year; net profit attributable to the parent was 634 million yuan, successfully reversing losses.

For a company that had lost money for four consecutive years, this feels more like a long-overdue self-affirmation.

When it listed in Hong Kong last January, Brico quickly secured over HKD 55.36 billion in margin subscriptions, with a public offering of up to HKD 146 million, oversubscribed by more than 3,800 times. A yet-unprofitable company was being fiercely chased by capital.

The reason isn’t particularly complicated. Using the same blind box model, Brico’s revenue growth in 2024 hit 156%, surpassing Pop Mart’s 107%. As a result, a simple, straightforward narrative quickly fermented in the capital market: “The next Pop Mart in Hong Kong stocks.”

A year later, this financial report at least proves one thing: Brico has indeed emerged.

But it doesn’t confirm the script initially written for it by the capital market. Here, there’s no dopamine harvesting for the middle class like Pop Mart, nor the almost religious brand brainwashing of LEGO.

It’s neither Pop Mart’s “dopamine premium” nor LEGO’s “religious worship.” What truly propelled this company to rebound is a secret war involving scale, granularity, and generational gaps.

Next “Ultraman”

Once, Brico was believed to have its key IP in Japanese hands: Ultraman. But last year, Brico found a new “Ultraman.”

In 2025, Brico’s new product release pace significantly accelerated, with SKU total reaching 913, jumping from quarterly updates to monthly updates. Among all IPs, the two most dense and critical are Transformers and Kamen Rider.

Data shows these two IPs released approximately 224 to 298 SKUs throughout the year, accounting for a quarter to a third of total new products. For a company with 75 IPs, 29 of which are commercialized, this concentration already indicates strategic bias.

The main product launches have also become new revenue pillars.

In 2025, Transformers revenue hit 951 million yuan, a 109.6% increase, replacing Ultraman as the top IP; Kamen Rider revenue reached 331 million yuan, up 94.8%, rising to the third-largest IP.

The once perceived biggest risk—“Ultraman dependence”—is being replaced by a more stable multi-IP structure. Although Ultraman’s revenue share declined sharply by 25.6% in 2025, it validated a clear path: the male teenage demographic.

While Pop Mart, targeting young women, surged forward, the boys’ toy market remains large and stable. In 2025, China’s toy market reached 180 billion yuan, with over half of that in boys’ toys.

More importantly, these IPs possess almost everlasting vitality. Since its debut in 1966, Ultraman has developed over 70 main characters; Kamen Rider, from 1971 to today, has over 40 main riders and hundreds of secondary riders; Transformers, from the G1 animation in the 1980s to the cinematic universe, has over a thousand characters.

Massive characters mean continuous SKU expansion capacity. Through low prices, blind box mechanisms, and dense SKUs, they continuously stimulate repurchase and maintain market buzz.

| A Kamen Rider has multiple forms in blind boxes

Compared to Ultraman’s relatively fixed forms, Transformers and Kamen Rider have advantages in “playability”: the former can switch between vehicle and humanoid forms, while the latter can evolve into multiple weapons and armor configurations. This highly variable structure naturally aligns with the core selling points of building block toys—articulability, modifiability, and combinability.

| Brico’s “Pokémon” grafted onto “Transformers”

Additionally, the Transformers IP, licensed globally by toy giant Hasbro, has also helped Brico profit overseas.

As early as 2024, Brico launched an official YouTube overseas channel, extensively posting stop-motion animations of Transformers toys. In the first ten months, it easily gained a million followers, mostly promoting Transformers with little to no other IPs.

To connect with contemporary American teenagers, Brico focused on recent series: the 2023 “Transformers: Rise of the Beasts” and the 2024 “Transformers: Origins.” These stop-motion videos, leveraging the movability and disassembly features of building blocks, vividly recreate iconic scenes from the movies:

Content and products are linked, quickly translating into sales. The financial report shows that Brico’s overseas revenue in 2025 was 319 million yuan, a 396.6% increase, a huge jump from 2024’s 2.9%. The fastest-growing region was the Americas, with an 804.1% increase. The US is the core market.

From “dependence on Ultraman” to “bundling a set of global IPs,” Brico appears safer now.

Toy Industry “Pinduoduo”?

Compared to Pop Mart, Brico’s clearest and sharpest label is actually two words: cheap.

The same Q-version Kamen Rider character sets from Bandai Japan cost five times more than Brico’s:

Compared to Bandai and Hasbro’s focus on high-end collectibles and model toys, Brico deliberately avoids high-price segments, instead focusing on smaller, buildable sets. Its core lies in joint block component technology: 90% of parts are standard universal pieces, with a basic skeleton adaptable to different IP images, allowing high part reuse.

This is why Brico is called “China’s LEGO.” And this design not only enhances movability and playability but also greatly reduces mold costs. Coupled with China’s mature toy supply chain, Brico naturally has the ability to keep prices low.

Brico’s cheapest “Starry Version” blind box costs as little as 9.9 yuan, with other versions at 19.9 yuan (“Starlight Version”) and 39.9 yuan (“Galaxy Version”). The most expensive “Legendary Version” collectible model is only in the hundreds of yuan.

Low prices also determine its channel strategy. Offline, Brico has entered retail chains like Miniso and penetrated campus stationery and toy stores on a large scale. In 2024, during Ultraman’s peak, its offline outlets reached 150,000, covering all first- and second-tier cities and about 80% of third-tier cities.

Low prices drive impulse buying, especially in offline channels. In school stationery stores, 9.9 yuan toys no longer require parents’ money; kids can buy with their pocket money, making purchase decisions easy.

This explains Brico’s core logic: leverage low prices to stimulate high-frequency purchases, use high frequency to scale up, and spread costs through scale. This is a very typical “Pinduoduo-style” approach.

But this “scale for profit” path is essentially walking a razor’s edge.

In recent years, Brico’s investment in IP licensing and sales has remained high: from 2021 to mid-2024, licensing fees totaled hundreds of millions of yuan, with Ultraman licensing alone exceeding 60 million yuan in the first half of 2024; sales expenses in the same period reached 283 million yuan, accounting for 12.6% of revenue.

Even with a 155.6% YoY revenue surge in 2024, the company still lost nearly 400 million yuan. More critically, the Ultraman IP, which contributed over half of the revenue that year, will expire in 2027, forcing Brico to seek alternatives early.

Thus, the aggressive expansion in 2025 makes sense: launch new IP frantically to hedge against dependence on a single IP; simultaneously, use low prices to increase volume and further dilute cost structure.

The results show this strategy worked. In 2025, the 9.9 yuan “Starry Version” blind box contributed 540 million yuan, accounting for 18.6%, with nearly half of sales volume. Meanwhile, the company’s overall expense ratio dropped to 34.9%, down 15.8 percentage points year-over-year, indicating scale effects.

But if we exclude financial optimizations from listing (such as fair value changes of convertible preferred shares and one-time expenses), the true profitability quality of Brico begins to reveal another side.

In 2025, adjusted profit increased only 15.5% YoY, far below the 30% revenue growth; adjusted net profit margin was 23.2%, down 2.9 percentage points year-over-year.

In other words, scale is expanding, but profitability is weakening, clearly showing that low-price strategies are eating into gross margins. In 2025, the average selling price of Brico’s building block toys dropped 27.5% YoY, and gross margin fell from 52.6% in 2024 to 46.8%, a decline of 5.8 percentage points.

Brico has proven that the “Pinduoduo” model can work in the toy industry, carving out a path in small stationery stores outside the giants’ view.

Chenghai’s Cycle

In the潮玩 (trend toy) scene, a 50% gross margin is even considered “stingy.”

Take Pop Mart as an example: its gross margin has long been maintained between 60% and 70%, with some core IPs approaching 80%. The fundamental difference lies in pricing power.

Pop Mart relies on original or designer-collaborated IPs, whose scarcity directly translates into premium pricing. While the market often labels Brico as “the next Pop Mart,” their underlying operational systems are fundamentally different.

More precisely, Brico is more like a highly clever “patchwork”: it borrows the blind box mechanism of潮玩 but is rooted in the traditional toy industry.

This path has clear advantages. Transformers, Ultraman, Kamen Rider—these are all super IPs spanning decades, continuously adapted into films and series, with a stable and ongoing audience base. For Brico, this means lower marketing costs and higher conversion efficiency, as the IP itself handles much of the marketing.

But the cost is also clear. Licensing IPs means always relying on the rights holders in the US and Japan. Collaborations can lead to explosive growth but also have an endpoint. Ultraman’s license will expire in 2027, and this uncertainty always exists.

In comparison, LEGO also extensively uses IP collaborations, but its true moat is “LEGO” itself. LEGO’s standardized, highly recognizable building blocks have become a symbol of play.

Although Brico also creates a unique building experience through its universal construction system, this feature exists only within the toy’s internal structure. Its appearance still lacks distinctive features, more like “a toy of some IP” rather than a standalone product language.

The harsher reality is that Transformers and Kamen Rider are IPs tailored by Hasbro and Bandai to sell products. This means Brico’s real competitors are these global giants that set the rules of the game.

To fill the gap, Brico has also tried launching original series like “Hero Infinite,” but in 2025, this series’ revenue share shrank to 9.1%, down 14.8% YoY. This data ruthlessly shatters the illusion: in the realm of original imagination, Brico still struggles.

This is not just Brico’s dilemma but a “fate cycle” that Chinese toy companies have been unable to escape for thirty years.

In the 1990s, Chenghai, known as the “Toy Capital,” nurtured Audi Daban. Back then, Audi toys, by reproducing Japanese “Mini 4WD” and “Spinning Warriors,” became a childhood companion for many and helped boost Chenghai’s industrial rise. Later, Audi evolved into Aofei Entertainment, attempting to break through with original anime, but its creative ability and influence have never matched Western or Japanese classics.

Thirty years later, from Audi Daban to Brico, Chinese toy companies have mastered complex molds, low-cost production, and vast channels.

But behind that delicate industrial shell, the soul remains absent.

Whether LEGO’s bricks or潮玩’s blind boxes, what truly allows a company to enjoy cyclical premium power is not the myriad play methods but the irresistible original imagination behind the toys.