Newborn Town (SEHK:9911) published 2022 Q1 operating figures: social networking business sees 65% growth in revenue, innovative businesses are ready to go

HONG KONG,April 20,2022 --On April 19,Newborn Town (9911.HK) announced its unaudited operating figures for 2022 Q1. The Company's social networking business revenue is expected to reach RMB 625 to 650 million in Q1,up approximately 65% YoY. MAUs of social networking products averaged at around 22.27 million,up approximately 7% from 2021 Q4. Cumulative downloads of social networking products reached 386 million as of March 31,2022,up 12% from December 31,2021.

The Company has been improving the functions of its social networking products,deepening its localized operations around the world,and enriching its content ecology. Such strategic moves have further enhanced its brand influence,especially in developed markets such as Europe,North America,Japan and Korea,where new breakthroughs have been achieved. Meanwhile,the Company has also been actively promoting innovative businesses such as refined games to be its second growth engine.

Content ecology continues to refine amid rapid growth of social networking business

Focusing on the track of open social networking,Newborn Town has launched multiple audio and video social networking products,including Yumy,MICO and YoHo,as its springboard for global market expansion. MAUs of its social networking products have been rising for 9 consecutive quarters since the first release of such operating figure in Q1,2020.

The Company's social networking products have expanded their foothold in developed markets in Q1 2022: Yumy was rated as one of the Top 10 best-selling social apps in New Zealand,Hungary,and other countries; MICO entered the list of Top 15 best-selling social apps in Japan; YoHo was on the list of Top 10 best-selling social apps in Italy,Spain,and many other European countries.

In the course of global marketing,Newborn Town has been dedicated to localized operations,and constantly optimized the audio and video content ecology of its products,so as to expand opportunities for commercialization while offering high-quality and rich contents to global users.

Newborn Town has also been contributing to the goal of creating a healthy,high-quality content ecology. It supports content creators in every market,promotes high-quality content output on various platforms through means of training,services,incentive policies for creators,as well as introducing professional content production organizations.

For instance,MICO held diverse events around the world,such as Rap Battle,Best DJ,and Pride Day in the U.S.,Star Project and Soccer Queen in Japan,which are all stages for the users and content creators to participate. The outstanding creators will be well-paid and given a chance to receive brand endorsements or tailored singles,and appear on the big screens of local landmarks and magazine covers.

More than that,Newborn Town has improved the accuracy of the content recommendations through optimized algorithm,and thereby effectively enhancing the user stickiness and their willingness to pay. In turn,these bring higher income for the content creators and motivate them to provide quality output. With optimization throughout each stage,the Company has thus formed a positive cycle of content ecology.

In addition to constructing its content ecology,the Company also established a strict content audit mechanism,involving multiple audits based on algorithms,manual review and third-party partner organizations to guarantee a healthy platform.

Newborn Town's continuous improvement in content quality and matching efficiency have laid a good foundation for its content ecology. The products' robust content creation atmosphere and users' content consumption habits continue to drive the social networking business of the Company to prosper.

According to the lists of top 30 Chinese non-game companies for overseas revenue issued by data.ai (formerly App Annie) in March,Newborn Town ranks the 4th. In the data.ai list of top 30 Chinese non-game apps for overseas revenue,MICO and YoHo ranked the 7th and 17th,respectively.

Innovative businesses become the second growth engine

Apart from its rapidly growing social networking business,the Company has also been diversifying the development opportunities in overseas markets and proceeding with innovative businesses such as refined games and metaverse.

Two refined games progressed well in Q1. Mergeland-Animal Adventure,whose official version launched in January this year,registered a next-day retention of nearly 60% and a 30-day retention of about 20%,and can be rated Level S compared with similar products. The product will soon be vigorously promoted first in the U.S. market,then global markets. Another product,Mergeland-Alice's Adventure,is under beta testing and presenting excellent data results. Its official version will be unveiled in May.

In addition,the Company developed the intelligent game framework,Solar Creator,to reduce duplication of work during game development. Solar Creator significantly reduced R&D costs while improving efficiency and providing strong support for the sustainable development of refined games.

Furthermore,the Company also kept a close eye on metaverse,Web 3.0,and many other cutting-edge technologies and application scenarios. It has tested metaverse modules in its product Yumy,into which a collection of digital collectibles has been integrated,whilst building strategic partnerships with companies possessing top virtual technologies to jointly discover more possibilities for virtual social scenarios.

In the future,Newborn Town will continue to deepen its localized operations globally,optimize its content ecology,further expand developed markets in Europe,and raise its penetration rate in emerging markets in the Middle East and Southeast Asia. It will keep accelerating its goal of "being the world's largest open social networking company" and further develop a second growth curve by actively promoting the innovative businesses.

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