Newborn Town Announced its Operating Figures for the First Three Quarters; Expected Revenue Growth of Over 115% YoY; MAU of Social Apps Reached 20.43 million

HONG KONG, CHINA / ACCESSWIRE / October 19, 2021 / On 18 October, Newborn Town Inc. (HK:9911), China’s top social networking enterprise going global announced its operating figures for the first three quarters of 2021. The Company expects the revenue for the first three quarters will reach RMB 1.58 to 1.70 billion, representing a significant growth of over 115% year-on-year (YoY).

Revenue from the Company’s value-added service business is expected to reach RMB 1.35 to 1.40 billion. The value-added service business, which is mainly contributed by social networking business, has achieved remarkable breakthroughs in developed markets such as Europe, North America, Japan and Korea.

On user base, the average monthly active users (MAU) of Newborn Town’s social networking products for the third quarter this year reached approx. 20.43 million, representing an increase of approx. 12.07% quarter-on-quarter (QoQ). As of 30 September 2021, the cumulative number of downloads of the social networking products reached 298 million, representing a growth of 17.38% as compared to 30 June 2021.

Social networking business grew rapidly with breakthroughs in developed markets

Since 2013, Newborn Town has been focusing on the overseas market. The Company expanded into social networking business in 2015, and completed its IPO in Hong Kong in 2019. As China’s top social networking enterprise going global, Newborn Town has developed a series of global audio and video social networking products, such as MICO and YoHo.

For the nine months ended 30 September 2021, the total revenue of the Company is expected to reach RMB 1.58 to 1.70 billion, representing a growth of over 115% YoY. The surge in revenue is primarily attributable to the rapid growth in social networking business. During the nine-month period, the Company’s revenue from value-added service business is expected to reach RMB 1.35 to 1.40 billion, which is mainly from social networking business.

The announcement stated that Newborn Town’s social networking business achieved remarkable breakthroughs in developed markets such as Europe, North America, Japan and Korea. Newborn Town’s social networking products have been leading the way in emerging markets such as Middle East, Southeast Asia and South Asia, and the Company has successfully replicated the success to developed markets such as North America and Europe.

Figures from App Annie showed that MICO ranked Top 10 of the Highest-Grossing Social Applications in 100 countries and regions, including Canada, United Kingdom and Sweden. YoHo, the audio social networking app also ranked Top 10 of the Highest-Grossing Social Applications in European and American countries such as the US and France. In addition to the growing user base, there is also a huge increase in user value.

Achieve greater business scale and brand effect by further investing in R&D and operation

Newborn Town further invested in product development, promotion, localization and talent cultivation this year, resulting in continuous enhancement in performance.

According to the Interim Report of 2021, the Company’s R&D expenses in the first half of the year increased by almost 4 times YoY. Along with this, the Company also increased its inputs on localization.

In the U.S. market, Newborn Town organized activities such as Rap Battle and Best DJ to merge its social application with cultures of Rapping and Electronic Music. The Company also organized public wellbeing activities to for instance, battle against cyberbullying. In Japan, the Company embraced elements of animation by inviting the actress of Ultraman – Japan’s national superhero series, to join their platform and collaborate with AnimeJapan to promote its product. Recently, the Company joined hands with the Osaka City Hall to co-organize “Illuminating Osaka”, an event that was well received by the local government and mainstream media in Japan.

Outstanding performances in overseas markets, attracting attention from investors and media

Newborn Town has been developing at a high pace and is seen as the representative of Chinese companies with focus on overseas markets. It received continuous attention from media and institutions domestically and overseas.

Last week, the renowned weekly magazine The Economist released a full-page report on the Company. In the last few months, the Company was also covered by the Financial Times’ Chinese website, China Daily, the overseas edition of People’s Daily, Hurun Report, and numerous respected newspapers and magazines, recognizing the Company’s overseas social business.

Meanwhile, the capital market has also been paying more attention to Newborn Town. Earlier this year, Newborn Town was added to MSCI’s China Small Cap Index. BlackRock, Goldman Sachs Asset Management, and State Street Global Advisors are among the group of nearly 10 top-notch institutional investors which had set open positions on the Company. In particular, BlackRock has increased its stake for several times, showing a vote of confidence on Newborn Town and the social networking business.

Lately, China’s major investment and trading platforms such as Wind, TongHuaShun (10JQKA) and Xueqiu (Snowball) have established their “Overseas Internet Business” division and set up a more details grouping to response to the “Overseas business” concept. The capital market has eyes on this sector, and it is expected the industry will draw more attentions in the future.

Conclusion

Newborn Town has been constantly devoting more on all aspects, including product development, localized operation and talent cultivation. The Company’s competitive edges and first mover advantage are getting more obvious. Along with its healthy cash flow and capital structure, Newborn Town is opening room for promising growth. The Company is expected to perform even better as it maintains its competitive advantages in the field of overseas social networking.

SOURCE: DLK Advisory Limited

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