Newborn Town (9911.HK) Announced 2021 Interim Results, Revenue Surged by 6 Folds and Former President Mr. Li Ping Appointed as CEO

HONG KONG,Aug. 26,2021 -- Newborn Town (9911.HK),the largest social-networking company going global in China,announced its interim results on 25 August 2021. The Group recorded a significant growth in revenue and net profit with rapid development of the social-networking products. In particular,the revenue from value-added service business grew remarkably.

Newborn Town also announced the change of Chief Executive Officer (CEO). Mr. Li Ping,the Former President,was appointed as new CEO of the Group. Mr. Liu Chunhe,the Chairman,will focus on the Group's strategies,organizational construction and social value in order to continue to create greater and longer-term value for the Company's development.

1H 2021 Revenue over RMB 1 Billion and Net Profit Surged by 40 Folds

Newborn Town's report shows that the Company's total revenue reached RMB 1.04 billion for the six months ended June 30 2021,representing a Year-on-Year growth of nearly 6 folds,of which the revenue from value-added service business reached about RMB 0.82 billion,which is equivalent to a Year-on-Year growth of over 50 folds,and accounted for 79.1% of the total revenue.

The Company's profit for the period reached about RMB 0.14 billion,representing a Year-on-Year increase of 40 folds,while adjusted EBITDA increased Year-on-Year by nearly 8 folds to RMB 0.18 billion.

In the first half of the year,the Company increased investments in product research and development,expanded its R&D team to 276 members,and R&D expenses increased Year-on-Year by nearly 4 folds. Meanwhile,the operating efficiency of the Group greatly improved,resulting in a revenue created by per employee of RMB 2.02 million.

The substantial growth in revenue and profit was driven by the rapid development of social-networking business. In the first half of 2021,the average number of Monthly Active Users (MAU) of the Company's social products reached 17.41 million,representing an increase of 38% as compared to the second half of 2020. The breakthroughs in developed markets have resulted in the continuousincrease in the Average Revenue Per User (ARPU) of social-networking products.

Social products enjoy great reception worldwide and significant growth in developed markets

In the past two years,Newborn Town has been actively expanding into the developed markets. In the first half of the year,its social products grew rapidly in developed markets such as Europe,North America,Japan and South Korea with continuous enhancement in user value.

Flagship product MICO is among the list of Top 5 highest-grossing social applications in Canada,Sweden,Switzerland,Belgium,Portugal and other developed countries. In addition,the voice-chat social product,YoHo,has also entered the list of Top 10 highest-grossing social applications in the US,France and other European and North American countries. Such remarkable results have demonstrated strong competitiveness of the Group's social products in developed markets.

Co-founder and Former President Mr. Li Ping Appointed as New CEO

On 25 August,the Board of Directors of Newborn Town appointed Mr. Li Ping as the new CEO,who will be fully responsible for the business management of the Company. And Mr. Liu Chunhe,who has resigned as the CEO of the Group,will continue to serve as the chairman and focus on the Group's strategies,organizational construction and social value in order to continue to create greater and longer-term value for the Company's development.

Mr. Li Ping joined Newborn Town in 2011 and is the Co-founder of the Company. He previously held several positions such as Chief Operating Officer (COO) and President of the Company.

He has a thorough understanding towards the global internet market and is experienced in product development,operations,and market expansion. He was once selected as "Forbes 30 Under 30 Asia" and "Hurun China Under 30s To Watch".

In 2013,Mr. Li Ping directed the design and development of the Company's first global product,Solo Launcher,which quickly accumulated more than 100 million users. The development team was certified by Google as "Global Top Developer". In 2015,Mr. Li Ping created the Shuffle advertising model and obtained a patent,leading to a new trend in the industry.

Over the years,Mr. Li Ping has led Newborn Town in its expansion into the global market,development of tens of epic social and gaming products,establishment of AI engine and user scenario engine,as well as the creation of the ecosystem of global traffic,which contributed to the Group's continuous business growth.

Looking ahead,he will be fully responsible for the Group's business management and lead the Group to achieve greater success and rapid development.

Focus on Scale Expansion to Achieve an All-Rounded Growth

During the interim results presentation held on the 26 August,Mr. Li Ping said that the Company would strive to scale up its business and further increase investment to achieve an all-rounded growth.

Regarding product planning,the Company will continue to plough deeply into the open social-networking sector with strategic focus on developing video and audio products. The Company will optimize core products,and improve user duration and stickiness,whereby to promote an all-rounded growth in user base,revenue and profit.

Regarding market development,the Company will continue to expand into the developed markets and put additional resources in the operations in North America,Europe,Japan and South Korea,in order to expand the user base and product popularity. The Group will also strive to explore more potential markets to further improve its global layout of social-networking business.

The Company will strive to seize the demographic dividend of the young generations worldwide,with a niche focus on young people such as generation Z as well as explore emerging technologies and business models.

All in all,Newborn Town maintained rapid growth in the first half of the year,with breakthroughs in revenue,net profit and user base. As the company further improves its strategic planning for long-term development and investments,a sustainable,rapid and all-rounded growth in business scale can be expected.

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