Newborn Town (9911) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 rose 65.3% year-over-year to RMB2,271.9 million, driven by strong growth in both social networking and innovative business segments.

• Net profit increased 28.2% year-over-year to RMB387.6 million, with profit attributable to equity shareholders up 21.3% to RMB224.7 million.

• Adjusted EBITDA grew 29.2% year-over-year to RMB448.5 million, reflecting improved operational efficiency.

• The company deepened its presence in the Middle East and North Africa, with business scale in the region up 44% year-over-year.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit increased 61.4% year-over-year to RMB1,141.0 million, with a gross margin of 50.2%.

• Social networking business revenue rose 66.5% to RMB2,070.4 million, while innovative business revenue increased 53.7% to RMB201.5 million.

• Operating profit was RMB366.6 million, up 32.1% year-over-year.

• Basic and diluted EPS were both RMB0.20, compared to RMB0.16 in the prior year period.

• Cash and cash equivalents stood at RMB1,489.2 million as of 30 June 2024.

Outlook and guidance

• The company will continue to focus on expanding its pan-audience social networking business, especially in the Middle East and North Africa.

• Plans include further global expansion, particularly in Southeast Asia, Japan, South Korea, and North America.

• Strategy emphasizes replicating successful products from the Middle East to other markets and investing in niche games for long-term value.

• Strategic intent to pursue acquisitions and investments that create synergies with existing operations.