Newborn Town (9911) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2025 rose 40.0% year-over-year to RMB3,181.3 million, driven by robust growth in both social networking and innovative business segments.

• Gross profit increased 55.6% year-over-year to RMB1,775.1 million, with gross margin improving to 55.8%.

• Profit attributable to equity shareholders surged 117.8% year-over-year to RMB489.3 million.

• Adjusted EBITDA grew 44.0% year-over-year to RMB645.7 million.

• The company expanded its global footprint, especially in the Middle East, North Africa, and Southeast Asia, supported by product portfolio development and AI empowerment.

Financial highlights

• Social networking business revenue reached RMB2,834.3 million, up 37.0% year-over-year; innovative business revenue was RMB346.9 million, up 70.5%.

• Cost of revenue increased 24.3% year-over-year to RMB1,406.1 million, mainly due to higher revenue sharing, commission fees, and employee expenses.

• Gross profit margin improved from 50.2% to 55.8% year-over-year.

• Selling and marketing expenses rose 108.0% to RMB1,001.6 million, reflecting intensified promotion efforts.

• Basic earnings per share increased to RMB0.39; diluted EPS at RMB0.38.

Outlook and guidance

• Plans to deepen product diversification and expand market presence, especially in the Middle East, North Africa, and new markets.

• Continued focus on innovative business, particularly niche games and social e-commerce, to drive a secondary growth curve.

• Ongoing investment in AI technology to enhance product capabilities and operational efficiency.