HONG KONG, Aug. 30, 2024 /PRNewswire/ -- On August 29, Newborn Town (09911. HK) unveiled its interim results for the first half of 2024, demonstrating significant growth in various key operational indicators. The improvement was driven by its skyrocketing pan-audience social networking business and further expansion in the MENA market.
According to the announcement, Newborn Town reported a total revenue of RMB 2,272 million for the first half of 2024, marking a substantial 65% period-on-period increase. Net profit for the period reached RMB 388 million, up 28% period-on-period. Profit attributable to the Company's owners was RMB 225 million, reflecting a 21% period-on-period rise. Adjusted EBITDA totaled RMB 448 million, demonstrating a 29% period-on-period increase.
The social networking business segment attained robust growth, achieving revenue of approximately RMB 2,070 million, marking a 67% growth period-on-period. Additionally, the innovative sector made significant progress, recording around RMB 202 million in revenue, reflecting a 54% period-on-period growth.
Notably, the Company's long-term investment in the MENA region has been yielding positive feedback. The capability for "product replication "has been further strengthened, with new products represented by SUGO rapidly maturing, thus bringing fresh growth momentum to the Company.
As one of the major markets, the MENA market has consistently been the core focal point of the Company's strategic implementation of localization strategy. Through years of in-depth regional operations, Newborn Town has built up a comprehensive regional organization, nurtured a local team of employees, and forged strong connections with local creators and partners.
The benefits brought about by Newborn Town's localization efforts are becoming increasingly evident. For the first half of 2024, the MENA market contributed over 50% of the Company's social networking business revenue, with the core products recording a 44% period-on-period increase.
The MENA region has also been the market for Newborn Town's new business incubation. Products with high potential, such as TopTop and SUGO, have been successfully scaled up from inception as their business models were verified for global market expansion.
This August, Saudi Arabia's Ministry of Investment granted Newborn Town a Regional Headquarters (RHQ) license, making it the world's first social entertainment company to establish a regional headquarters in Saudi Arabia. This move further consolidates Newborn Town's efforts in the MENA region.
Under the RHQ program, Newborn Town will aim to build a trustworthy enterprise in the MENA region through close connections with governments, active engagement in community development and charitable activities, serving the local populace and building an ecosystem.
While continuously widening the moat with its localization strength, Newborn Town has also achieved significant breakthroughs in product operation, starting to achieve the goal of replicating the popular apps that generate tens of millions of dollars in monthly revenue. After MICO, the companion-based social app SUGO has reached the target.
Newborn Town's operation strategy, centered on cultivating the "Bushes" housing apps with diverse features, has been developed through a deep understanding of users' specific social and entertainment needs. Under this strategy, Newborn Town's strength in app operation has steadily advanced, alongside enhancements in the middle platform mechanism.
Moreover, the Company's aggregated localized operation resources have hastened the emergence of hit apps by facilitating swift product launches, cost-effective trial and error testing, and highly efficient verification.
SUGO and TopTop, the new apps under Newborn Town, have both experienced explosive revenue growth. SUGO, for example, has achieved an over 250% period-on-period increase in revenue. In July, SUGO contributed the majority revenue to Newborn Town among the apps.
TopTop, the social gaming platform with a double period-on-period revenue increase in the first half, was featured as a recommendation on the Apple App Store in May, reaching users across dozens of countries and regions, including Saudi Arabia, the United Arab Emirates, and Oman.
The first-mover products, such as MICO and YoHo, have also made significant strides. MICO, TopTop, SUGO, and YoHo all ranked on Sensor Tower's Top 10 highest-grossing social apps in MENA from January to May 2024.
According to the announcement, the Company will persist in its pursuit of creating successful products in increasingly specialized niches and duplicating more apps that yield monthly revenues in the tens of millions of US dollars.
Beyond its pan-audience social networking business achievements, Newborn Town's other business segments have also seen notable progress.
HeeSay, the LGBTQ+ online community, has strengthened its global brand presence through more refined in-app operations. Since early this year, this platform has launched a series of offline events in Bangkok, Ho Chi Minh City, Los Angeles, etc., fostering a stronger sense of community among users. These efforts have contributed to an increase in business scale of approximately 25%.
In addition, the Company has continued investment in developing quality games. In the first half of 2024, Newborn Town's quality games achieved a recharge of RMB 387 million, up 393% period-on-period. Its flagship title, Alice's Dream: Merge Games, secured a spot among Sensor Tower's top 30 Chinese mobile games in overseas revenue for May and June.
Overall, Newborn Town has made significant strides across key markets and various business segments in the first half of 2024. The Company has reinforced the validity of its business models in the social sector, bolstering the competitiveness of its new products and injecting new growth catalysts.
Moving forward, Newborn Town aims to delve deeper into the social entertainment realm, gaining a foothold in MENA and expanding globally to create positive emotional values.
