Newborn Town (9911) H2 2024 earnings summary

Executive summary

• Achieved record revenue of RMB5,091.5 million for 2024, up 53.9% year-over-year, driven by strong growth in social networking and innovative businesses.

• Adjusted EBITDA rose 42.8% to RMB963.1 million, reflecting improved operational efficiency and AI-driven product enhancements.

• Profit for the year increased 3.6% to RMB787.8 million, with profit attributable to equity shareholders declining 6.3% to RMB480.3 million due to share-based compensation and acquisition impacts.

• Completed acquisition of NBT Social Networking, making it a wholly-owned subsidiary and strengthening global market position.

Financial highlights

• Revenue: RMB5,091.5 million (+53.9% YoY); Social networking revenue: RMB4,631.9 million (+58.1% YoY); Innovative business revenue: RMB459.6 million (+21.3% YoY).

• Gross profit: RMB2,607.7 million (+51.4% YoY); Gross margin: 51.2% (down from 52.1% in 2023).

• Adjusted EBITDA: RMB963.1 million (+42.8% YoY); Operating profit: RMB728.9 million (+32.3% YoY).

• Net profit: RMB787.8 million (+3.6% YoY); Basic and diluted EPS: RMB0.42 (down from RMB0.45 in 2023).

• No final dividend recommended for 2024.

Outlook and guidance

• Will continue to prioritize social networking with a diversified product matrix and deepen penetration in key markets, especially MENA and Southeast Asia.

• Plans to increase AI R&D investment to drive product innovation, efficiency, and new business models.

• Focus on expanding innovative business, especially niche games and social e-commerce, to solidify secondary growth.