Company and Industry Summary Company Overview - The company is a leading global social entertainment firm established in 2009, with over a decade of experience in international expansion since 2013 [3] - The company operates two main business segments: social business and innovative business, with social business accounting for approximately 90% of total revenue [3] Financial Performance - For the first three quarters of 2024, the company reported revenue exceeding 3.5 billion RMB, with social business revenue growing over 60% year-on-year [1] - Innovative business revenue for the same period was approximately 300 to 320 million RMB, reflecting a year-on-year growth of 12.4% to 19.9% [2] - The company's overall revenue growth for the previous year was 18%, with a significant increase in gross profit margin by 14% [11] Social Business Highlights - The social business segment includes two categories: semi-group social and multi-group social, with products like Miko, Yoho, Popo, and Sugo [3] - The semi-group social business is primarily focused on the Middle East and North Africa (MENA) region, which contributes over 50% of social business revenue [2] - The SOHO platform has emerged as the highest revenue-generating social product, following Miko, achieving a monthly revenue of over 10 million USD [1] Market Dynamics - The MENA region is projected to exceed 2.36 billion USD by 2028, with an annual growth rate of over 20% from 2023 to 2028 [5] - The LGBTQ social business segment, acquired through the purchase of BlueCity, has become the second-largest globally, with a user base exceeding 7.43 million MAU [7] Innovative Business Insights - The innovative business focuses on premium games and advertising, with a notable entry into the casual mobile game market [8] - The flagship game, Alice Dream, has achieved a monthly revenue of nearly 10 million USD, ranking among the top 30 Chinese mobile games in overseas revenue [9] - Overall game revenue reached 576 million RMB, with a year-on-year growth of 82.5% [9] Strategic Initiatives - The company aims to cultivate multiple flagship products with monthly revenues exceeding 10 million USD over the next three years [10] - Plans to enhance the commercial capabilities of Alice and introduce new products are in place, with a target for Alice to break even by Q4 2024 [11] - The company is actively repurchasing shares, having bought back approximately 26 million shares for nearly 80 million HKD, reflecting management's confidence in the company's future [13] Future Outlook - The company projects a revenue target of 4.5 billion RMB for 2024 [13] - Continued focus on expanding overseas operations, particularly in Southeast Asia, is planned, with a goal to establish a strong brand presence [10] - The company is also exploring strategic acquisitions to enhance its market position [10] Additional Notes - The company has made significant organizational changes post-acquisition of BlueCity to improve profitability and streamline operations [14] - The acquisition of Miko World is progressing, with expectations to complete the transaction by late Q4 2024 [15]

Investment Rating - The report maintains a "Buy" rating for Chizicheng Technology (09911 HK) [1] Core Views - Chizicheng Technology's Q3 2024 revenue slightly exceeded expectations, with social business maintaining high-quality growth [1] - The company's social business revenue for Q1-Q3 2024 is expected to reach RMB 3 24-3 28 billion, a year-on-year increase of 60 7%-62 7% [1] - The company's innovative business revenue for Q1-Q3 2024 is expected to be RMB 300-320 million, a year-on-year increase of 12 4%-19 9% [1] - The company's self-developed and externally distributed premium game achieved a turnover of approximately RMB 576 million, a year-on-year increase of about 182 5%, but has not yet been reflected in the company's revenue [1] Financial Performance - The company's revenue for 2024E is expected to be RMB 4 773 billion, with a year-on-year growth rate of 44 3% [1] - The company's net profit attributable to the parent company for 2024E is expected to be RMB 383 million, a year-on-year decrease of 25 2% [1] - The company's ROE for 2024E is expected to be 25 5% [1] - The company's EPS for 2024E is expected to be RMB 0 32 [1] - The company's P/E ratio for 2024E is expected to be 10 3x [1] Social Business - The company's social business revenue for Q1-Q3 2024 is expected to reach RMB 3 24-3 28 billion, a year-on-year increase of 60 7%-62 7% [2] - The company's social business revenue for Q3 2024 is expected to be RMB 1 17-1 21 billion, a significant increase compared to the same period last year [2] - The company's social business growth is driven by the expansion of the pan-population social business in the Middle East and North Africa, with the SUGO platform achieving a monthly turnover of over USD 10 million [2] - The company's acquisition of BlueCity in August 2023 has contributed to the growth of social business revenue [2] - The company's new products, such as SUGO, TopTop, and HeeSay, are expected to contribute to the growth of social business revenue [2] Innovative Business - The company's innovative business revenue for Q1-Q3 2024 is expected to be RMB 300-320 million, a year-on-year increase of 12 4%-19 9% [5] - The growth of innovative business is driven by the steady development of social e-commerce business [5] - The company's flagship game, "Alice's Dream: Merge Games," achieved a turnover of approximately RMB 576 million, a year-on-year increase of about 182 5% [5] Acquisition of NBT Minority Stake - The company plans to acquire a minority stake in its subsidiary NBT Social Networking [3] - NBT's net profit after tax for 2022, 2023, and Q1 2024 were RMB 440 million, RMB 660 million, and RMB 170 million, respectively [3] - The acquisition is expected to be completed by the end of 2024 and will increase the company's net profit attributable to the parent company [3] Investment Recommendation - The report recommends maintaining a "Buy" rating for Chizicheng Technology [5] - The report expects the company's revenue for 2024-2026 to be RMB 4 773 billion, RMB 5 395 billion, and RMB 6 028 billion, respectively [5] - The report expects the company's net profit attributable to the parent company for 2024-2026 to be RMB 383 million, RMB 729 million, and RMB 844 million, respectively [5] - The report expects the company's P/E ratio for 2024-2026 to be 10 3x, 6 4x, and 5 5x, respectively [5]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company has shown rapid growth in its social and gaming product revenues, with a projected revenue increase of 60.7% to 62.7% year-on-year for its social business in the first nine months of 2024 [2][3] - The innovative business segment is expected to generate revenue of 300 to 320 million RMB, reflecting a year-on-year growth of 12.4% to 19.9% [3] - The independently developed premium games have achieved a revenue of approximately 580 million RMB, marking a significant year-on-year increase of about 182.5% [3] Summary by Sections Revenue and Profit Forecast - Total revenue for 2024 is projected at 4,818 million RMB, with a year-on-year growth of 45.65% [1] - Net profit attributable to shareholders is forecasted at 406.7 million RMB for 2024, a decrease of 20.70% compared to the previous year [1] - The earnings per share (EPS) for 2024 is estimated at 0.29 RMB, with a price-to-earnings (P/E) ratio of 11.62 [1] Social Business Performance - The social business continues to grow rapidly, with the SUGO platform becoming the second social product to achieve monthly revenue exceeding 10 million USD [2] - As of September 30, 2024, the cumulative download of social business applications reached approximately 740 million, a 6.5% increase from June 30, 2024 [2] - The average monthly active users for the social business in Q3 2024 were approximately 28.98 million, reflecting a quarter-on-quarter growth of about 1.5% [2] Innovative Business and Gaming - The innovative business segment's revenue is expected to grow due to the steady development of social e-commerce [3] - The flagship game "Alice's Dream" has rapidly developed and entered the top 30 of Sensor Tower's overseas revenue rankings for Chinese mobile games [3] - The report indicates an upward revision of net profit forecasts for 2024 and 2025 due to better-than-expected performance in social business and gaming revenue [3]

Investment Rating - The report assigns a "BUY" rating to Newborn Town (09911.HK) with a target price of HK$ 3.80, an increase from the previous target price of HK$ 3.31 [2]. Core Insights - Newborn Town reported a year-on-year revenue increase of 65.3% to RMB 2,271.9 million for the half year ended June 30, 2024, with RMB 2,070.4 million coming from the social networking business [2]. - The performance of Sugo and TopTop was highlighted as resilient, contributing over 30% to total revenue, driven by strong performance in the MENA market [2]. - The report anticipates more than 1x growth for TopTop and Sugo in FY 2024, projecting over 50% year-on-year growth for the social networking business [2]. - Mico's performance was stable, accounting for over 40% of revenue from the social networking business, with operational optimization strategies leading to improved results [2]. - The acquisition of a non-wholly owned subsidiary that owns social entertainment products is expected to enhance profits attributable to shareholders [2]. - The innovative business segment saw a year-on-year growth of 53.7%, with one-third of this growth attributed to IAA games [2]. Financial Summary - Revenue projections for the upcoming years are as follows: RMB 3,307.8 million in 2024, RMB 4,401.4 million in 2025, RMB 5,281.1 million in 2026, and RMB 5,573.5 million in 2027, reflecting a year-on-year growth of 33.1% in 2024 [9]. - Gross profit is expected to increase from RMB 1,722.1 million in 2023 to RMB 2,203.5 million in 2024, with a gross margin of 52.1% [9]. - Net profit attributable to shareholders is projected to rise from RMB 512.8 million in 2023 to RMB 803.7 million in 2025 [9]. - The report indicates a significant increase in cash flow from operations, with projections of RMB 753.5 million in 2025 and RMB 831.3 million in 2026 [12]. Market Comparison - Newborn Town's market capitalization is approximately HKD 4.1 billion, with a P/E ratio of 6.4 and a gross margin of 52.1% [5]. - Compared to peers in the gaming and social networking sectors, Newborn Town's performance metrics indicate competitive positioning [5].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HK$ 3.80, up from a previous target of HK$ 3.31 [1]. Core Insights - The company achieved total revenue of RMB 2.27 billion in the first half of 2024, representing a year-on-year growth of 65.3%, with approximately RMB 2.07 billion coming from social business [1]. - Strong performance from Sugo and TopTop, driven by robust results in the MENA region, contributed over 30% of the group's revenue and remains a key growth driver [1]. - Sugo is expected to achieve over 100% revenue growth in the fiscal year 2024, contributing to more than 50% year-on-year growth in the group's social business [1]. - Mico World showed ideal performance, with Mico accounting for over 40% of the group's social business revenue, benefiting from optimized operational and commercialization strategies [1]. - The company announced the acquisition of non-wholly owned subsidiaries holding Mico and YoHo, which is expected to enhance profits attributable to shareholders [1]. Financial Summary - Total revenue projections for the company are as follows: RMB 3,307.8 million (2023), RMB 4,401.4 million (2024E), RMB 5,281.1 million (2025E), and RMB 5,573.5 million (2026E), with year-on-year growth rates of 18.1%, 33.1%, 20.0%, and 5.5% respectively [8]. - The gross margin is projected to be 52.1% in 2023, decreasing slightly to 49.6% by 2026 [8]. - Net profit attributable to shareholders is expected to rise from RMB 512.8 million in 2023 to RMB 806.1 million in 2026 [8]. - The company’s operating cash flow is projected to increase from RMB 753.5 million in 2024E to RMB 961.6 million in 2026E [13]. Market Comparison - The company’s market capitalization and financial ratios are compared with peers, showing a market capitalization of HK$ 4.1 billion and a price-to-earnings ratio of 6.4 [3].

Investment Rating - The report maintains an "Add" rating for the company with a target price of 4.08 HKD, based on a 12x PE for FY2024, corresponding to a market value of 48.6 billion RMB [1][2]. Core Insights - The company reported impressive performance for the first half of 2024, with total revenue reaching 2.272 billion RMB, a year-on-year increase of approximately 65%, and net profit of 388 million RMB, up 28% year-on-year. Adjusted EBITDA was 448 million RMB, reflecting a 29% growth [1]. - The growth was primarily driven by the company's expansion in the Middle East, North Africa, and other markets. The social business segment saw revenue of approximately 2.070 billion RMB, a 67% increase year-on-year, while the innovative business segment generated 202 million RMB, a 54% increase [1]. - The acquisition of a minority stake in NBT Social Networking is expected to enhance the company's net profit attributable to shareholders, as NBT will become a wholly-owned subsidiary, with its financial performance consolidated into the company's financial statements [1][2]. - The company has been included in the FTSE Global Small Cap Index and the FTSE All-World Index, which is anticipated to increase its visibility and influence in international capital markets [1]. Summary by Sections Performance Overview - In H1 2024, the company achieved total revenue of 2.272 billion RMB, a 65% increase year-on-year, and net profit of 388 million RMB, up 28% [1]. - The social business segment's revenue grew by 67% year-on-year, while the innovative business segment's revenue increased by 54% [1]. Acquisition Impact - The acquisition of NBT Social Networking is valued at approximately 1.98 billion HKD, and is expected to significantly boost the company's net profit post-acquisition [1][2]. Market Positioning - The inclusion in FTSE indices is expected to enhance the company's profile and attract global investment [1].

Financial Performance - For the six months ended June 30, 2024, customer contract revenue was RMB 2,271.9 million, an increase of 65.3% compared to RMB 1,374.6 million for the same period in 2023[4]. - Gross profit for the same period was RMB 1,141.0 million, up 61.4% from RMB 706.9 million in the prior year[4]. - Profit for the period reached RMB 387.6 million, representing a 28.2% increase from RMB 302.3 million in the previous year[4]. - Profit attributable to equity shareholders was RMB 224.7 million, a rise of 21.3% compared to RMB 185.3 million for the same period in 2023[4]. - Adjusted EBITDA for the six months was RMB 448.5 million, an increase of 29.2% from RMB 347.0 million in the prior year[4]. - Basic earnings per share for the period were RMB 0.20, compared to RMB 0.16 in the same period last year[5]. - The company reported a total operating profit of RMB 366.6 million, up from RMB 277.5 million in the previous year[5]. - Net profit for the same period was RMB 388 million, an increase of 28% year-on-year[12]. - The gross profit margin decreased from 51.4% for the six months ended June 30, 2023, to 50.2% for the same period in 2024[31]. Revenue Breakdown - Total revenue for the first half of 2024 reached RMB 2.272 billion, representing a year-on-year growth of 65%[12]. - Revenue from the social business segment was RMB 2.070 billion, with a year-on-year growth of 67%[12]. - The innovative business segment generated revenue of RMB 202 million, marking a 54% increase year-on-year[12]. - The flagship games segment generated a total revenue of RMB 387 million, reflecting a remarkable year-on-year growth of 393%[17]. - The core product (Mico World) in the MENA region saw a business scale increase of approximately 44% year-on-year[12]. Cost and Expenses - The company's cost of revenue for the six months ended June 30, 2024, was RMB 1,130.9 million, reflecting a 69.4% increase from RMB 667.7 million in the same period last year[25]. - The cost of revenue for the social business was RMB 1,046.1 million, a 61.1% increase from RMB 649.5 million year-on-year, mainly due to increased share of revenue to streamers and employee benefits[26]. - Sales and marketing expenses increased by 95.3% to RMB 481.6 million for the six months ended June 30, 2024, compared to RMB 246.6 million for the same period in 2023[32]. - Research and development expenses rose by 20.1% to RMB 163.9 million for the six months ended June 30, 2024, from RMB 136.5 million for the same period in 2023[33]. Cash Flow and Assets - Operating cash flow reached RMB 359 million, showing a significant increase of 103% year-on-year[12]. - Total assets increased from RMB 2,790.9 million as of December 31, 2023, to RMB 2,999.1 million as of June 30, 2024[43]. - Cash and cash equivalents rose to RMB 1,489.2 million as of June 30, 2024, up from RMB 1,386.3 million as of December 31, 2023[44]. - Operating cash flow increased to RMB 370.7 million for the six months ended June 30, 2024, compared to RMB 181.9 million for the same period in 2023[44]. Shareholder Information - The company has granted a total of 80,000,000 share options to 32 eligible individuals, with performance-linked vesting conditions[8]. - Mr. Liu Chunhe holds 238,706,646 shares, representing 20.04% of the total shares[57]. - Mr. Li Ping owns 73,121,774 shares, accounting for 6.14% of the total shares[60]. - The total number of issued shares as of the last practicable date is 1,191,216,000[61]. Strategic Initiatives - The company is focusing on expanding its MICO social business segment[9]. - The company plans to continue its "Middle East incubation, global replication" strategy, focusing on the MENA market to optimize products and services[19]. - The company aims to launch the HeeSay online community in 2024, targeting the global LGBTQ+ audience and enhancing brand influence through online and offline activities[20]. - The company plans to pursue strategic investments or acquisitions to create synergies within its business, focusing on companies with competitive advantages in technology and data[49]. Corporate Governance - The company has complied with the principles and provisions of the corporate governance code during the reporting period[124]. - The board has resolved not to declare an interim dividend for the six months ended June 30, 2024[126]. Acquisitions - The company signed a share purchase agreement to acquire NBT Social Networking Inc. for a total consideration of HKD 1,982,658,000 (approximately RMB 1,809,572,000), which includes cash consideration of HKD 993,790,000 (approximately RMB 907,032,000) and share consideration of HKD 988,868,000 (approximately RMB 902,540,000)[127].

证券研究报告·海外公司点评·软件服务(HS) 赤子城科技（09911.HK） 后发产品快速增长，收购 NBT 少数股权有望 增厚归母净利润 2024 年 09 月 05 日 买入（维持） | --- | --- | --- | --- | --- | --- | |------------------------------|--------|--------|---------|--------|--------| | [Table_EPS] 盈利预测与估值 | 2022A | 2023A | 2024E | 2025E | 2026E | | 营业总收入（百万元） | 2800 | 3308 | 4586 | 5090 | 5656 | | 同比 (%) | 18.60 | 18.15 | 38.64 | 10.99 | 11.11 | | 归母净利润（百万元） | 130.14 | 512.85 | 346.63 | 701.21 | 800.32 | | 同比 (%) | 145.46 | 294.09 | (32.41) | 102.29 | 14.13 | | EPS- 最新摊薄（元 / 股） | ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就因本公告全部或任何部分內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 NEWBORN TOWN INC. 赤子城科技有限公司 （於開曼群島註冊成立的有限公司） （股份代號：9911） 截至2024年6月30日止六個月之中期業績公告 及有關二零二三年年報的補充資料 赤子城科技有限公司（「本公司」）董事會（「董事會」）欣然公佈本公司及其附屬公 司（「本集團」）截至2024年6月30日止六個月（「報告期間」）之未經審核簡明合併中 期業績。中期業績已由審核委員會審閱及畢馬威會計師事務所根據香港會計師公 會頒佈的香港審閱準則第2410號「由實體的獨立核數師執行中期財務資料審閱」審 閱。畢馬威會計師事務所的未修訂審閱報告載入擬寄發予股東的中期報告。 在本公告中，「我們」及「我們的」指本公司及本集團（視乎文義所指）。 | --- | --- | |-------|-------------------------------------------------------------- ...

Investment Rating - Buy rating with a target price of HKD 4.59, representing a potential upside of 31.9% from the current price of HKD 3.60 [3][4] Core Views - The company is expected to see stable revenue growth in 2024 despite global macroeconomic slowdown, driven by its leading position in the social出海 sector [13] - The acquisition of a subsidiary is expected to significantly boost归母净利润 by fully consolidating the subsidiary's financial performance [9][23] - The company's LGBTQ+ social business,蓝城兄弟, is expected to continue improving profitability and contribute to revenue growth [10][12][26] Financial Performance - Revenue is projected to grow from HKD 2,800 million in 2022A to HKD 6,573 million in 2026E, with a CAGR of 23.05% [7][15] - Gross margin is expected to remain stable around 45% from 2024E to 2026E [7][14] - Net profit is forecasted to increase from HKD 287 million in 2022A to HKD 679 million in 2026E [7][15] - ROE is projected to improve from 18.8% in 2024E to 19.6% in 2026E [14] Business Operations - The company has established a diversified product portfolio including MICO, YoHo, SUGO, and TopTop, targeting emerging markets like the Middle East and Southeast Asia [13] - The acquisition of米可世界 is expected to enhance归母净利润 by eliminating minority interest deductions and improving EPS [23][25] - The company's LGBTQ+ social business is benefiting from the integration of赤子城科技's technological and market insights, leading to improved operational efficiency [12][26] Market Position - The company is a leading player in China's internet出海 sector, with a strong presence in social networking and entertainment services [13][23] - Its products serve over 150 countries and regions, with nearly 100 million users globally [25] - The company is well-positioned to capitalize on the growing LGBTQ+ market, which is projected to reach USD 5.4 trillion by 2023 [26]