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） | ...

Financial Performance - Customer contract revenue for the six months ended June 30, 2024, was RMB 2,271.9 million, an increase of 65.3% compared to RMB 1,374.6 million for the same period in 2023[2] - Gross profit for the six months ended June 30, 2024, was RMB 1,141.0 million, up 61.4% from RMB 706.9 million for the same period in 2023[2] - Net profit for the six months ended June 30, 2024, was RMB 387.6 million, an increase of 28.2% compared to RMB 302.3 million for the same period in 2023[2] - Profit attributable to equity shareholders for the six months ended June 30, 2024, was RMB 224.7 million, up 21.3% from RMB 185.3 million for the same period in 2023[2] - Adjusted EBITDA for the six months ended June 30, 2024, was RMB 448.5 million, an increase of 29.2% compared to RMB 347.0 million for the same period in 2023[2] - Operating profit increased by 32.1% to RMB 366.6 million for the six months ended June 30, 2024, from RMB 277.5 million for the same period in 2023[24] - The company reported a basic earnings per share of RMB 0.20 for the six months ended June 30, 2024, up from RMB 0.16 in the same period of 2023, representing a growth of 25%[45] Revenue Growth - In the first half of 2024, the company's total revenue reached RMB 2.272 billion, a year-on-year increase of approximately 65%[6] - The company's social business generated revenue of RMB 2.070 billion, up 67% year-on-year, while innovative business revenue reached RMB 202 million, growing 54% year-on-year[6] - Revenue from core products, specifically the "Mico World" product, grew over 100% year-on-year[5] - Revenue from the MENA region grew approximately 44%[5] - Revenue from the SUGO product increased over 250%, with monthly revenue exceeding USD 10 million[5] - Social business revenue reached RMB 2,070.4 million, up 66.5% from RMB 1,243.5 million year-over-year, driven by optimized operations and the acquisition of Chizicheng Strategy Investment Limited[14] Cost and Expenses - Total revenue cost for the six months ended June 30, 2024, was RMB 1,130.9 million, a 69.4% increase from RMB 667.7 million in the same period of 2023[16] - The total expenses for the six months ended June 30, 2024, amounted to RMB 1,882,213,000, compared to RMB 1,134,234,000 for the same period in 2023, reflecting a significant increase in operational costs[59] - Sales and marketing expenses rose 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[21] - The innovative business's cost of revenue surged by 365.6% to RMB 84.8 million, primarily due to increased inventory costs and employee benefits related to social e-commerce expansion[18] Cash Flow and Liquidity - Operating cash inflow for the six months ended June 30, 2024, was RMB 359 million, a year-on-year increase of 103%[5] - Cash and cash equivalents at the end of the period were RMB 1,489 million, an increase of 7% compared to the beginning of the period[5] - Cash flow from operating activities increased to RMB 370,703 thousand for the six months ended June 30, 2024, up from RMB 181,862 thousand in the same period of 2023, reflecting improved operational efficiency[50] - The company’s cash and cash equivalents reached RMB 1,489,188 thousand as of June 30, 2024, compared to RMB 774,894 thousand a year earlier, indicating a strong liquidity position[50] Assets and Liabilities - 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, while total liabilities decreased from RMB 843.4 million to RMB 747.7 million[31] - The debt-to-asset ratio improved from 30.2% as of December 31, 2023, to 24.9% as of June 30, 2024[31] - Non-current liabilities decreased to RMB 125,901 thousand as of June 30, 2024, from RMB 146,951 thousand as of December 31, 2023, a reduction of 14.3%[47] - The company’s total liabilities as of June 30, 2024, were RMB 747,666 thousand, down from RMB 843,361 thousand at the end of 2023, indicating a decrease of 11.3%[47] Strategic Initiatives - The company plans to continue focusing on the Middle East and North Africa markets while expanding into Southeast Asia, Japan, South Korea, and North America[10] - The company plans to launch the Heesay online community for the LGBTQ+ demographic in 2024, aiming to enhance brand influence and market presence[12] - The company plans to engage in strategic investments or acquisitions to create synergies, focusing on companies with competitive advantages in technology and data[33] - The company aims to replicate successful products from the Middle East to global markets, leveraging its established user demand and business models[11] Market Outlook - The Middle East media and entertainment market is projected to reach USD 66.99 billion by 2029, indicating strong growth potential for the company[11] - The company expressed gratitude to management and employees for their efforts during the reporting period[68] - Forward-looking statements regarding business outlook and financial performance are based on existing data and assumptions, which may prove incorrect due to various risks and uncertainties[68] - The company emphasized that shareholders and potential investors should not overly rely on forward-looking statements due to inherent risks[68]

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]

作者 吴立 分析师 SAC 执业证书编号：S1110517010002 wuli1@tfzq.com 股价走势 -21% 12% 45% 78% 111% 144% 177% 2023-06 2023-10 2024-02 赤子城科技 恒生指数 资料来源：聚源数据 相关报告 投资建议 风险提示：1、海外市场监管政策风险 2、汇率波动风险 3、新业务不及 预期 4、市场拓展不及预期 5、收购进度不及预期 港股公司报告 | 公司点评 本报告署名分析师在此声明：我们具有中国证券业协会授予的证券投资咨询执业资格或相当的专业胜任能力，本报告所表述的 所有观点均准确地反映了我们对标的证券和发行人的个人看法。我们所得报酬的任何部分不曾与，不与，也将不会与本报告中 的具体投资建议或观点有直接或间接联系。 除非另有规定，本报告中的所有材料版权均属天风证券股份有限公司（已获中国证监会许可的证券投资咨询业务资格）及其附 属机构（以下统称"天风证券"）。未经天风证券事先书面授权，不得以任何方式修改、发送或者复制本报告及其所包含的材 料、内容。所有本报告中使用的商标、服务标识及标记均为天风证券的商标、服务标识及标记。 本报告是机密的， ...

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