According to a research report released by Guoyuan Securities, it maintains a "buy" rating for NewbornTown Technology (09911) and expects the company's revenue to achieve stable growth by 2024, with a target price of HKD 4.59. The company is currently the main force of China's internet expansion, and the track space is vast. In terms of social business, it has developed four differentiated social products, including the open social platform MICO, the voice social platform YoHo, the companion social platform SUGO, and the game social platform TopTop, which have entered the Middle East, Southeast Asia and other regions.

The main viewpoints of Guoyuan Securities are as follows:

Acquisition of affiliate companies increases net profit attributable to the parent company:

In June, the company announced the signing of a share purchase agreement, intending to acquire the target company's shares. Beijing Mico, the overseas corresponding entity of NewBornTown after restructuring, has a total consideration of approximately HKD 1.983 billion. After the delivery, the target company will become a wholly-owned subsidiary of NewBornTown, and its financial performance will be fully consolidated into the consolidated financial statements. According to the plan, the purchase cost consists of two parts, namely the cash cost of HKD 0.994 billion and the issuance of 0.2197 billion shares of the company at a price of HKD 4.50 per share (with a total value of approximately HKD 0.96 billion) to the seller as the share consideration. According to the bank's estimation, the valuation of this acquisition is between 6 and 7 times, which is a reasonably valued transaction when compared with the company's existing valuation.

BlueCity's profits continue to increase, and its LGBTQ product matrix is further enriched:

After NewBornTown consolidates BlueCity's accounts in 2024 fiscal year, it continues to improve the profitability of the business. In addition to BlueCity, the company also launched HeeSay, a social product for diverse overseas communities, earlier this year, which further enriches the product matrix and opens up new sources of revenue for the company. Before being acquired by NewBornTown, the LGBTQ social business faced challenges in customer acquisition efficiency, operation and monetization efficiency in overseas markets. However, with the integration of NewBornTown's technological, market insights and user understanding advantages into BlueCity's management system, the deficiencies have been effectively compensated. This strategic "fit" makes it possible for diverse social businesses to grow in overseas markets. It is believed that BlueCity can continue to optimize its revenue structure and improve its profit margin, achieving significant performance improvement in the next 1 to 2 fiscal years.