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赤子城科技：An increment in the profit attributable to shareholders
09911NEWBORNTOWN(09911) 西牛证券·2024-10-14 08:12

Investment Rating - The report assigns a "BUY" rating to Newborn Town (09911.HK) with a target price of HK3.80,anincreasefromtheprevioustargetpriceofHK 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].