Summary of Newborn Town (9911.HK) Conference Call Company Overview - **Company**: Newborn Town (9911.HK) - **Industry**: Social Networking and Live Streaming - **Market Cap**: HK$15,627 million (US$2,012 million) - **Current Price**: HK$11.06 - **Target Price**: HK$16.00 - **Recommendation**: Buy/High Risk Key Points Industry Position - Newborn Town is the 6 Chinese internet player by overseas revenue and 3 in social networking, following ByteDance and Joyy as of August 2025 [1][2][3] Growth Drivers 1. **Product Development Success**: The company has seen replicable success in product development, particularly with Sugo, amidst increasing competition [1][3] 2. **Global Presence**: Strong foothold in MENA and pan-SEA regions, with effective localization strategies [1][3][43] 3. **Emerging Growth Areas**: Anticipated growth in games, social e-commerce, and short dramas [1][3] 4. **Strategic Investments**: Proven track record of strategic investments fueling growth [1][3] 5. **AI Adoption**: Implementation of AI to enhance operational efficiency and growth [1][3] Financial Performance - **Revenue Forecasts**: Expected revenue growth of +54% in 2024, +35% in 2025, +20% in 2026, and +16% in 2027 [3][4] - **Net Profit**: Projected net profit of Rmb1,125 million in 2025, with a diluted EPS of Rmb0.860 [6][11] - **Margins**: Adjusted net margins expected to be 12.2% in 2024, improving to 15.4% by 2027 [3][4] Product Portfolio - **Pan-Audience Products**: Includes Mico, YoHo, TopTop, and Sugo, with significant user engagement and revenue contributions [13][14][15] - **Diverse-Audience Products**: Acquired BlueCity, enhancing offerings in the diverse-audience segment with platforms like Blued and HeeSay [26][28] - **User Metrics**: As of 1H25, average MAU reached 33.9 million, with cumulative downloads of 870 million [14][19] Valuation - Target price set at HK$16, based on a 16x FY26E adjusted EPS of HK$1.01, aligning with global peers [4][11] Risks 1. **Product Lifecycle**: Aging products and low new product hit rates could impact growth [5][30] 2. **Competition**: Intensifying competition in the global social entertainment space [5][30] 3. **Traffic Acquisition**: ROI fluctuations in traffic acquisition strategies [5][30] 4. **Regulatory Changes**: Evolving regulations across different markets may pose challenges [5][30] Market Opportunities - **Sector Outlook**: Strong potential in the global social networking and casual gaming markets, particularly in MENA and SEA [1][16][18] - **Upcoming Developments**: Potential inclusion in HK Stock Connect by March next year, which could enhance visibility and liquidity [2][12] Strategic Initiatives - **Global Headquarters**: Established in Hong Kong, with regional headquarters in Riyadh and Singapore to support global operations [47][48] - **AI and Middle Platform**: Focus on enhancing AI capabilities to streamline operations and improve product development efficiency [40][41] Conclusion - Newborn Town is positioned for robust growth with a diversified product portfolio and strong global presence. The company is leveraging strategic investments and AI to enhance operational efficiency, while navigating potential risks associated with competition and product lifecycle management. The current market correction presents a buying opportunity for investors looking to capitalize on its growth trajectory.

Group 1 - The core viewpoint of the report is that Zhi Zi Cheng Technology (09911) has achieved strong growth in both revenue and shareholder profit, with a target price raised to HKD 13.20 and a "Buy" rating maintained [1] - For the first half of 2025, the company reported a total revenue increase of 40.0% year-on-year to RMB 3.18 billion, with social business revenue growing by 37.0% to RMB 2.83 billion and innovative business revenue rising by 70.5% to RMB 350 million [1] - The gross profit margin significantly improved to 55.8% due to reduced streamer revenue sharing and increased contributions from premium games [1] Group 2 - The company's social business is performing well, with Sugo and TopTop being the main growth drivers, each recording over 100% year-on-year revenue growth, contributing nearly half of the group's total revenue [2] - Sugo has shown outstanding performance in the Middle East and North Africa markets and is actively expanding into Latin America and Europe, while TopTop's monthly revenue has surpassed USD 10 million for the first time [2] - The integration of AI technology, particularly the Boomiix model, has significantly enhanced user engagement metrics such as average online duration, payment rates, and ARPU, which is crucial for market expansion and product efficiency [2] Group 3 - The innovative business segment also showed strong growth, with the premium game "Alice's Dream" being a key driver for revenue increase [2] - The incorporation of AI technology has shortened product development cycles and improved ARPU and user retention rates, allowing for faster launches of new flagship games [2] - The launch of the AI creative content community Aippy enables users to create interactive content through natural language, with future monetization expected through a subscription model [2]

Group 1 - The core viewpoint of the report highlights that Zai Lab (09911) has achieved strong growth in both revenue and shareholder profit, with a target price raised to HKD 13.20 and a "Buy" rating maintained [1] - For the first half of 2025, Zai Lab reported a total revenue increase of 40.0% year-on-year to RMB 3.18 billion, with social business revenue growing by 37.0% to RMB 2.83 billion and innovative business revenue rising by 70.5% to RMB 350 million [1] - The gross profit margin significantly improved to 55.8% due to reduced streamer revenue sharing and increased contributions from premium games [1] Group 2 - The company's social business showed impressive performance, with Sugo and TopTop being the main growth drivers, each recording over 100% year-on-year revenue growth, contributing nearly half of the group's total revenue [2] - Sugo performed particularly well in the Middle East and North Africa, while also expanding into Latin America and Europe, with TopTop's monthly revenue surpassing USD 10 million for the first time [2] - The integration of AI technology, particularly the Boomiix model, has significantly enhanced user engagement metrics such as average online duration, payment rates, and ARPU, which is crucial for market expansion and product efficiency [2] Group 3 - Zai Lab's innovative business also showed strong growth, with the premium game "Alice's Dream" being a key driver for revenue increase [2] - The incorporation of AI technology has shortened product development cycles and improved ARPU and user retention rates, allowing for faster launches of new flagship games [2] - The launch of the AI creative content community Aippy enables users to create interactive content through natural language, with potential future monetization through a subscription model [2]

Group 1: Social Business Performance - The social business revenue of Zhi Zi Cheng Technology (09911.HK) grew by 39.1% year-on-year to approximately 44.3 million in Q1 2025, driven by the application of artificial intelligence and optimization of social recommendation algorithms [1] - Despite facing temporary headwinds in March and April due to the Ramadan holiday, the business rebounded quickly in May, with the main social product Sugo achieving a monthly revenue of about 24 million and approximately 4 million monthly active users [1] - The strong growth trend continued into June, with minimal impact from geopolitical tensions in the Middle East [1] Group 2: Innovative Business Growth - Zhi Zi Cheng Technology's innovative business also showed satisfactory progress in Q1 2025, achieving a year-on-year growth of 66.7% to 88.2%, driven by boutique games and social e-commerce platforms [1] - The success of Alice's Dream is seen as a positive signal for this business segment, with expectations that new boutique games will achieve breakeven faster and provide higher investment returns [1] Group 3: Global Headquarters and Growth Potential - Zhi Zi Cheng Technology has established its global headquarters and AI research center in Hong Kong, leveraging the international business environment, mature capital markets, and top talent resources to enhance AI applications in operations [2] - The company has shown robust growth in revenue and attributable profit, with products like Sugo, TopTop, and Blued expected to continue growing, providing substantial returns to shareholders [2] - The company’s strong cash reserves enable it to acquire potential businesses like Lan Cheng Brothers, and macroeconomic factors such as the recovery of valuations for Chinese companies and peak risk-free interest rates are expected to positively impact the company's valuation [2]