FAST NEWS: Newborn Town Social Business Revenue Up 20% in 2022

The latest: Social networking platform operator Newborn Town Inc. (9911.HK) said Tuesday it expects to report that revenue from its social networking business reached between 2.45 billion yuan ($366 million) and 2.47 billion yuan last year, up about 20% from 2021.

Looking up: Downloads for the company’s social networking business reached 481 million last year through Dec. 31, up about 5% compared to Sept. 30. The company’s average monthly active user base for the year reached 22.91 million, up about 20% from a year earlier.

Take Note: The company said short-term factors such as the Qatar World Cup caused fourth quarter revenue from its social networking business to “fluctuate,” implying business wasn’t strong during the period.

Digging Deeper: Founded in 2009, Newborn Town operates multiple social platforms combining entertainment elements such as dating, group voice chats, livestreaming and short video. It was listed in Hong Kong on the last day of 2019. Previously focused on emerging markets, the company has established mainstream social platforms in the Middle East, Southeast Asia and South Asia. It began to achieve breakthroughs in developed markets such as Europe, the U.S., Japan and South Korea last year, leading to a 32.3% jump in revenue to 1.37 billion yuan in the first half of 2022. The company’s management said that it will continue to explore the metaverse social scene and enhance synergies between social activities and gaming.

Market Reaction: After opening up 3.5% on Wednesday morning, Newborn Town’s shares gave back the gains and closed unchanged at HK$1.98 by the midday break. It now trades at the lower end of its 52-week range.

Translation by Jony Ho

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