BabyTree Group Announces 2019 Interim Results

HONG KONG,Aug. 28,2019 -- BabyTree Group ("BabyTree" or the "Company",with its subsidiaries,the "Group"; Stock Code: 1761) is pleased to announce its unaudited consolidated results for the six months ended June 30,2019. During the review period,the Group's average total MAU reached 156.3 million,with an average monthly active users increase of 21.6% compared with 2018,and a revenue of RMB240 million in 1H 2019.The Company continues to maintain leadership in the online M&C industry. In the same time,BabyTree has announced the completion of investment in several American young family service companies to accelerate globalization strategy.

User Traffic grows steadily and Establish a Global Traffic Layout

During the reporting period,the traffic of BabyTree continues to grow strongly,with mobile devices traffic growing significantly: the average MAU of mobile Apps reached 27.6 million with an increase of 21.6% compared with 2018.BabyTree Parenting's average MAUs reached 20.1 million,representing a growth of 9.2% from 18.4 million in 2018; average MAUs for WeTime reached 7.5 million,representing an increase of 74.4% from 2.0 million in 2018. BabyTree keeps leading the industry from the perspective of data indicators of user stickiness and activity: the average one-month retention rate of BabyTree Parenting and WeTime was 62% and 68%,respectively; The average user time spent on BabyTree Parenting and WeTime per day was 22.92 minutes and 25.27 minutes,respectively.

As a well-known Chinese M&C-focusedfamily service platform,the growth of BabyTree's traffic is undoubtedly due to its trusted brand appeal. In addition,since the beginning of this year,BabyTree has developed the product innovation from the four dimensions of content,tools,social and technology,which further enhances the user experience and service cycle. For example,the Company has carried out a content upgrade,by building a comprehensive knowledge system of maternal and child health,children's education development and women's self-growth,and presenting the content of knowledge through diversified forms,to strive to build a more complete,more leading and more scientific family content library. BabyTree also enhances the efficiency of content service distribution and energy conversion of consumer services by improving the technical capabilities of algorithms and AI to enable different content,social and services to be accurately matched to users of different periods and different needs.

At the same time,BabyTree started its global traffic layout this year. The main functions of the core products are laid out in the form of small programs,such as WeChat,Baidu,and Toutiao user flow ecology. On July this year,the total MAU of the Group's four mini-programs reached 2.67 million. "The old concept is only to bring users to our own Apps. As a platform-type of M&C family service company,BabyTree's products and services are everywhere as the users are." Huainan Wang,Founder and Chief Executive Officer of BabyTree said,"We are glad to share our core strengths and capabilities with strategic partners to empower each other,and finally develop deeper,wider and farther in China and the international market."

Accelerate industry integration and deepen the strategic layout of globalization

Indeed,on a broader scale,BabyTree is constantly moving during this year,and it is reported that the company has completed the following investment projects：American Science Parenting Brand "Parent Lab",AI children companion robot brand "Zoetic" and AI Online English Enlightenment Education company "Littlelights",which originated in Silicon Valley and targets for China Market. Sufficient cash flowensures BabyTree to continuously build a new global young family serviceecosystem by investing to deepen the flow moat,consolidate and establish new industry barriers,increase ARPU value whileexploring new traffic and new businesses.

In order to integrate the global target traffic,BabyTree has invested in the M&C dividend market in the United States and India. In China,the Company has invested in the head young family service brands of WeChat traffic ecology,such as Mom & Dad Camp and Momself,as well as increasing the holding of Stardoctor,to expand user flow and life cycle. At the same time,BabyTree is positioned as a technology-driven company,so it tend to empowerhigh-quality technology companies which in the field of parenting to help young families around the world enjoy a better life.

For example,Zoetic AI invested by BabyTree is a company of pet robots in Silicon Valley of the United States. Its robot product Kiki is the world's first pet robot with emotions and personality. At the approach of Internet of Things,intelligent hardware is recognized as the next entrance of cellphone traffic. In the future,BabyTree and Zoetic AI will jointly explore and accompany the development and production of pet robots.

Optimizing operating revenue structure and promoting four major development strategies

According to the interim report,BabyTree reported operating revenue of RMB240 million in the first half of the year. Gross profit margin remained stable at 72.5%. To further realize long-term development values,BabyTree continued to improve,adjust and explore the three major business segments,namely advertising,e-commerce and content monetization.

Affected by the overall environment,the advertising business recorded slower growth in operating revenue,but significant improvement was seen in the development of the pan-M&C family consumption brands. The number of new advertising brands grew 68.5% from the same period in 2018. Meanwhile,BabyTree launched more diversified and more precise online and offline advertising and marketing models. For instance,it cooperated with top-rated M&C brands,such as Wyeth,Nestle and Unicharm to develop anone-stop scientific parenting solution "BabyTree Research Institute",embarking on a new knowledge commercial era; it also partnered with Tmall to create an IP "Global Treasure Hunt" to explore quality M&C products from around the globe for families.

The two major systems BabyTree and Alibaba are being integrated. With respect to the e-commerce business,both parties have preliminarily completed. It is expected that it will enter the rapid growth stage in 2020. During the "618" period this year,the total sales of the e-commerce business has restored to the same level compared with the same period last year. The user flowof BabyTree's flagship store on Tmall has been increasing. Its "BabyTree Custom-made Wiping Tissues" were sold out within a second during the Tmall live streaming in "618". It is disclosed that BabyTree will establish more in-depth cooperation with Alibaba to gear up for the "Double 11". Through building the M&C system,BabyTree would launch their popular tools on Taobao,and develop new business models of traffic monetization and content monetization.

Benefiting from the steadily growing demographic dividend,political tailwinds and extension of the M&C market to family consumption market as a result of industrial upgrade,the M&C industry as well as BabyTree will embrace a broad vista. To explore long-term values,BabyTree will unswervingly uphold its mission and focus on the four major development strategies: product leadership through significant spending on research and development to pursue relentless and fast-paced optimization as well as continual innovation; profitability enhance and diversification of revenue streams; industry consolidation for further broadening our user reach; globalization that allows the Group to penetrate into key international growing markets.

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About BabyTree Group

BabyTree Group ("BabyTree" or the "Company") is a pioneer in developing an online community focused on young families in China. Established in 2007,it has now become the largest and most active M&C-focused community platform in China,with 156 million monthly active users (MAUs) in 2019H1. BabyTree's community platform offers a comprehensive suite of products and services that serve the four essential needs of China's young families: learning,sharing,recording and shopping. BabyTree's primary platforms include Babytree Parenting,its flagship platform; WeTime,a social recording medium and an online depositary of early education content and tools; and Meitun Mama,an M&C product-focused e-commerce platform.

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