Newborn Town Inc. (SEHK: 9911) Issues Positive Profit Alert for FY2024: Total Revenue Estimated to Exceed RMB 5 Billion, with Adjusted EBITDA Approaching RMB 1,000 Million

Newborn Town Inc. (SEHK: 9911) Issues Positive Profit Alert for FY2024: Total Revenue Estimated to Exceed RMB 5 Billion, with Adjusted EBITDA Approaching RMB 1,000 Million
 

On March 4th, Newborn Town released a positive profit alert for the year ended December 31st, 2024. Fueled by the rapid advancements in AI-powered social apps, the company experienced explosive revenue growth and a significant increase in profit.

For the year ended December 31st, 2024, Newborn Town's total revenue is estimated to be between RMB 5,000 million and RMB 5,200 million, reflecting a year-over-year growth of approximately 51.1% to 57.2%. Net profit is estimated to range from RMB 770 million to RMB 810 million. Adjusted EBITDA is projected to be between RMB 950 million and RMB 990 million, showing a year-over-year increase of 40.7% to 46.7%.

The 'Bush-like' Portfolio of Social Apps Thrives under AI-driven Strategy

In recent years, Newborn Town has focused on the pan-audience social networking business. By deeply integrating into local markets and driving product innovation, the company has built a thriving 'bush-like' portfolio of social apps, including MICO, YoHo, TopTop, and SUGO.

In 2024, Newborn Town’s pan-audience social networking business continued to grow at a rapid pace. While existing products made a steady contribution to revenue and profits, newly launched apps also saw significant growth.

Notably, SUGO’s total revenue surged by over 200% year-over-year, becoming Newborn Town’s top-performing social app in terms of monthly recharge revenue. It consistently ranked among the top social app revenue charts in several countries, including Saudi Arabia, Turkey, and the UAE. Additionally, the game-oriented social app TopTop also demonstrated strong growth, with revenue increasing by over 100% year-over-year.

The integration of AI technology in business scenarios has been gradually deepened, leading to enhanced efficiency across research and development, operations, marketing, and advertising.

The ongoing evolution of Boomiix model, the self-developed multi-modal AI engine, has enhanced the social connectivity of products and increased users' willingness to pay. For example, by the end of 2024, SUGO experienced a more than 20% increase in ARPU (Average Revenue Per User) compared to the beginning of the year, driven by this AI engine, marking a significant optimization in its commercialization efficiency.

The company's 'Bush-like' social product portfolio is experiencing a thriving trend across global markets. Remarkably, the driving effects of its AI initiatives have begun to emerge. With the growth model of "social app portfolio + AI engine" being verified, Newborn Town is expected to continue expanding its technology-driven impact and uncover greater value in the global social landscape.

Localization Advantages Strengthened as Presence Expands in MENA

As one of the frontrunners in establishing a presence within the MENA social entertainment landscape, Newborn Town has spent nearly a decade developing strong localization advantages and securing a solid foothold in the region. In 2024, the company continued to capitalize on growth opportunities in MENA while steadily expanding its global footprint.

According to a report by Mordor Intelligence, MENA's media and entertainment market is expected to continue growing, with an estimated value of USD 66.99 billion by 2029. In line with this trend, this region has become a fertile ground for Newborn Town to cultivate blockbuster products, with several apps ranking among the top local downloads. Through multiple-themed market events and ongoing product and service updates, Newborn Town has further solidified its localization advantages.

In the second half of 2024, the company was granted the Regional Headquarters License by Saudi Arabia's Ministry of Investment (MISA), becoming the first global social entertainment company to establish a regional headquarters in the country. This milestone marks a significant step for Newborn Town in strengthening its localization efforts.

Meanwhile, Newborn Town has actively sought additional growth opportunities in other strategic markets, including Southeast Asia, Japan, South Korea, and North America. The company's diverse social business, with a focus on connecting LGBTQ+ individuals, continues to expand internationally, with its core product HeeSay (also known as the LGBTQ+ online community) solidifying its leadership in Southeast Asia.

HeeSay has consistently enhanced its social features and strengthened its community focus, boosting brand awareness and fostering a sense of identity among users through a series of global offline events.

Quality Games Start Turning a Profit as They Enter the Payback Phase

While executing its core social strategy, Newborn Town also invested in innovative business segments, including quality games and social e-commerce, creating a clear 'second growth curve' within its gaming division.

The company's self-developed quality games, published through external teams, have generated approximately RMB 705 million in recharge revenue, marking an 80.4% increase compared to 2023.

The year 2024 also marked a turning point of profitability for Newborn Town's quality games, as they began contributing to the company's revenue growth for the first time.

Fueled by the ongoing integration of AI technology across its business operations, Newborn Town has continued to make strides in the quality games sector. Among its standout titles, Alice's Dream: Merge Games had performed exceptionally well, consistently ranking among top-performing games as evaluated by leading data analytics organizations.

Driven by its diverse app portfolio and AI-powered strategy, Newborn Town has significantly boosted its global competitiveness over the past few years. The company has forged a high-quality business model synergized by product innovation, localized operation and growth beyond its original 'operation-focused' approach. This transformation has led to comprehensive advancements in its user base, revenue scale, and overall growth quality.

In February 2025, the company was added to the MSCI World Small Cap Index, following its inclusion in the FTSE Global Small Cap Index (FTSE) and the FTSE All-Cap Index (LMS) last September.

Newborn Town has demonstrated its firm confidence in future growth through concrete actions. In 2024, the company repurchased approximately 43 million shares, totaling over HKD 140 million. Looking ahead, Newborn Town will continue to implement its strategy for cultivating the application 'bush' worldwide, strengthen AI integration and leverage its diverse product lineup to capture new niches within the global social entertainment market, creating more positive emotional values for users.

About Newborn Town 

Newborn Town has grown into a leading technology company which was listed on the Main Board of the Hong Kong Stock Exchange (HKEX) in 2019 under the stock code 9911. 

Committed to creating positive emotional values worldwide, Newborn Town has developed a diverse portfolio of applications in the social networking and entertainment sectors. Its social apps include MICO, YoHo, TopTop, SUGO and HeeSay, together with gaming products like Alice's Dream: Merge Games. These applications have achieved widespread acclaim, reaching over one billion users in over one hundred countries and regions.Newborn Town considers the Middle East and North Africa (MENA) region a key market and has also extended its influence in Southeast Asia, Europe, the United States, Japan, and South Korea. The company aims to become the world's largest social entertainment company. 

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