Newborn Town releases operating figures for the first three quarters of 2022, with a growth of 36% YoY of social networking business revenue

HONG KONG, Oct. 20, 2022 /PRNewswire/ —  On October 19, Newborn Town Inc., a global social networking company (9911.HK), announced its unaudited operating figures for the first three quarters of 2022.

Founded in 2009, Newborn Town has been focusing on global markets for nearly ten years. With social networking as its core business, the Company has built a portfolio including MICO, an open social app, YoHo, a voice-based social app, and Yumy, a video-matching social app.

The Company’s revenue is expected to reach RMB 2.06 to 2.11 billion (approx. 290 million USD) in the first three quarters, up about 25% YoY. Among that, revenue from the social networking business is expected to reach RMB 1.91 to 1.94 billion, an increase of about 36% compared with the same period in 2021. Led by refined games, revenue from the innovation business is expected to reach RMB 150 to 170 million. Due to a change in the focus on the innovation business, its revenue contribution slid by about 36% from the same period of last year, but the fact that such decline has moderated suggested the transformation is promising.

Following its strategy of forming a portfolio of diversified social products, the Company’s success in achieving a favorable market share in key areas and strong growth in new markets has contributed to continuous development of its social networking business.

As of September 30 2022, Newborn Town’s social networking products were accumulatively downloaded 456 million times, 9% higher than the figure on June 30. Monthly active users (MAUs) of its social networking business rose steadily to 23.5 million in the third quarter, up 15% YoY.

MAUs in social networking rise for eleven consecutive quarters amid the success of "Replication in Markets"

Newborn Town kept up its steady up-scaling under the "high-quality growth" strategy in the third quarter, with MAUs of social networking products growing for eleven consecutive quarters. Relying on its efficient middle-platform system and localized operation capabilities, the Company’s "Replication in Markets" tactic has matured and was put into practice efficiently. Also, by combining successful experience with local features, Newborn Town has managed to penetrate into local markets with less time and costs.

Earlier this year, MICO rolled out its theme song for the Thai market. The song became an instant hit across local social media and garnered over 100 million views. This considerably increased the product’s brand influence. In the third quarter, MICO replicated such success in similar fashion in Malaysia, Vietnam, and other Southeast Asian nations, which once again enticed local internet users.

The Vietnamese theme song M.I.C.O SI MÊ was written, produced and performed by renowned Vietnamese musicians, and the music video was directed by a local well-known music production team called FILMCITI. Content creators from MICO also performed the music video. The widespread publicity of the song on TikTok, YouTube and other social media, has not only made MICO more popular among users, but also drawn a lot of content creators to the platform, further accelerating the growth in the Vietnamese market.

In the higher-value markets like Europe, North America, Japan, and South Korea, users are more mature, and their needs are more sophisticated. Newborn Town’s localization operations catered such needs while probing deeply into local market demand. Such efforts successfully boosted product growth and established effective, sustainable long-term penetration approaches.

For instance, after realizing the influence of sports culture in Japan, the local team achieved consecutive successes in the collaboration with Japanese soccer clubs at the end of last year. Based on these experiences, Newborn Town has further upped such activities into their product features. In the third quarter, the Company organized collaborative online and offline activities with baseball teams in Osaka and Fukuoka, garnering much support. The local team even hosted an exclusive live broadcast of the backstage of RIZIN – a Japanese fighting event, where a popular former RIZIN Girl was invited as hostess to interview professional fighters.

These activities have enhanced users’ product experience and the content ecology, resulting in continuous growth in the size and loyalty of the user base. With significantly increased brand impact, the localized activities facilitated Newborn Town products to make further breakthroughs.

Game product receives Google Play’s global recommendations, promising growth is on the horizon

In addition to the steady and healthy growth of the social networking business, Newborn Town’s innovation business is also rising over the past three quarters. Although the transformation of the innovation business has resulted in a drop in revenue as compared to 2021, the YoY difference is narrowing quarter after quarter. This suggests that refined games are leading the innovation business to smooth progression, where the impact of the business transformation is quickly diminishing. Now standing on a more sustainable model, the innovation business is about to return to the growth track.

Leading the charge of the Company’s innovation business are two merge games, Mergeland-Animal Adventure and Mergeland-Alice’s Adventure. Upon release, the games have been leading the genre in terms of key metrics such as user retention. Accumulated downloads and revenue have been growing strong since launched. In particular, the refined visual style, innovative game design and gameplay of Mergeland-Alice’s Adventure received recognition from Google Play. It was globally promoted as a "recommended new game" on Google Play Store in August.

The approval from global players and Google reflected the competitiveness and huge potential of Newborn Town. The Company will thereafter keep enhancing product experience and step-up promotional activities to further raise user volume and commercialization effectiveness of the games. Moreover, Newborn Town will also maintain its attention on cutting-edge technologies and new business tracks on a global scale, explore a variety of development opportunities, and diversify its innovative business structure for multi-dimensional growth.

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