Newborn Town Inc. (HK: 9911) Announced Positive Profit Alert
Significant Increase in Revenue and Net Profit driven from Globalized Voice-Chat, Video Communication Social Networking Business

On 3rd Mar 2021, Newborn Town Inc., the flagship internet company going global with focus on globalized social networking business, released the unaudited financial information for the year ended 31 December 2020 ('the Year'). The Group's revenue and net profit for the Year is expected to increase significantly, with the total revenue ranging from RMB 1,100 to 1,250 million, representing a year-on-year growth of approximately 180%-220%. Net profit is expected to reach RMB 100 to 120 million, representing a year-on-year growth of approximately 45%-75%. Adjusted net profit is expected to increase to approximately RMB 140 to 160 million, representing a year-on-year growth of 25%-45%.

According to the announcement, such increase in the revenue was mainly attributable to the rapid growth of the social networking business due to the increase in social -networking users, market expansion and diversified monetization, as well as the steady growth in its game business. As previously disclosed, the monthly active users (MAU) of the social networking apps have reached approximately 11.36 million.

The adjusted net profit* is expected to increase significantly compared with Year 2019, which was mainly due to the upsurge in profit from its social networking business.

*Adjusted net profit is defined as profit for the year excluding the impact from share-based compensation expenses, listing expenses, loan interest received from third parties, interest income received from the locked-up capital during the initial public offering and fair value changes of convertible redeemable preferred shares and the respective tax effects.

According to the Group's Annual Reports in the track record, revenue for year 2017-2019 were RMB 182 million, RMB 277 million, and RMB 390 million respectively. It will be a great leap forward for the Group with revenue exceeding RMB 1,100 million in 2020, demonstrating the substantial momentum in business growth.

Newborn Town Inc. places heavy emphasis on overseas businesses. Since 2016, it has been formulating strategic plans for developing the globalized social networking business with huge potential. After five years of dedication, the company has become one of the leading Chinese going-global platforms in the social networking markets. Newborn Town continues to increase its market share with three products, namely Yiyo, MICO and YoHo.

Meanwhile, the stay-at-home economy energized by the pandemic in 2020 has propelled the development of the voice-chat, video communication social platforms. MICO, Newborn Town's leading social networking platform, successfully attained the Top 20 Bestselling Social Networking Applications in both App Store and Google Play in 2020, due to its content-rich video streaming ecosystem.

Yiyo, another social networking product, featuring diversified social scenarios and contents such as private video chat and group video chat, ranked the World's top 20 Downloaded Applications in Google Play in 2020. YoHo, a voice-chat social networking product, has gained popularity among the Gulf states with strong spending power and strong social networking needs. In terms of operational scale, YoHo is currently one of the three largest voice-chat social platforms in the Middle East.

Newborn Town strives to fulfill the growing needs for online social interaction from global internet users, by offering instantaneous, efficient, and interactive social experience through its diversified product offerings. Longer app usage time and stronger user stickiness have been propelling the Group's revenue growth.

Today, Newborn Town is continuing to expand the reach of its business globally. It has covered over 150 countries with significant market presence in the Middle East, India, Pakistan and Southeast Asia, and achieved rapid growth in North America. Moving forward, the company is actively exploring Japan, South Korea, and Europe with huge market potential.