On March 4, NEWBORNTOWN (9911.HK) released its profit forecast for the fiscal year 2024, benefiting from the rapid development of diverse social products driven by AI technology, leading to explosive growth in company revenue and a significant increase in profit. The announcement indicated that for the year ending December 31, 2024, the company's total revenue is expected to be approximately RMB 5.0~5.2 billion, a year-on-year increase of about 51.1%~57.2% compared to the same period in 2023; net income is projected to be approximately RMB 0.7~0.81 billion, with adjusted EBITDA around RMB 0.9~0.99 billion, a year-on-year increase of about 40.7%~46.7%.

AI-driven, the social "bush" accelerates growth.

In recent years, NEWBORNTOWN has focused on social business for the general public, deeply rooting itself in local areas and innovating vertical products, forming a social product "bush" represented by MICO, YoHo, TopTop, and SUGO, with continuous enhancement of the product matrix's potential.

In 2024, the company’s social business for the general public maintains rapid growth. While established products steadily contribute to revenue and profit, emerging products continue to explode in growth, with SUGO's annual revenue increasing by over 200%, becoming the highest-ranked social product in terms of monthly revenue, consistently ranking at the top of social application revenue charts in multiple countries including Saudi Arabia, Turkey, and the UAE; TopTop also experiences rapid growth, with annual revenue increasing by over 100%.

Meanwhile, the application of AI technology in business scenarios is gradually deepening, helping to improve efficiency across the entire line from research and development, operation to marketing. In particular, the continuous upgrade of the company-developed multimodal Algorithm Model Boomiix has effectively enhanced product social efficiency and users' willingness to pay. For instance, with the support of Boomiix, SUGO's year-end ARPU value increased by over 20% compared to the beginning of the year, with significant optimization of commercialization efficiency.

Currently, NEWBORNTOWN's product "bush" is thriving across global markets, and the driving effect of its AI layout has begun to show initial results. As the growth model of "social matrix + AI engine" continues to run smoothly, NEWBORNTOWN is expected to amplify the technology-driven effect and discover greater value in the global social landscape.

Continuously deepening in the Middle East and North Africa, strengthening local barriers.

As one of the earliest social entertainment companies to deeply enter the Middle East and North Africa market, NEWBORNTOWN has been cultivating in this region for nearly a decade, forming a strong "localization" barrier. In 2024, NEWBORNTOWN continues to explore growth opportunities in this strategic market and steadily expands its business footprint in the Global market.

According to Mordor Intelligence's forecast, the scale of the media and entertainment market in the Middle East is expected to continue growing, reaching $66.99 billion by 2029. Currently, the Middle East market has become fertile ground for the company to cultivate blockbuster products. Through active market activities and continuous product service upgrades, the company's localization advantages are deepening, and multiple products are maintaining growth in this market, consistently ranking at the top of local app store charts.

In the second half of 2024, NEWBORNTOWN officially received the Regional Headquarters License (RHQ License) issued by the Saudi Ministry of Investment (MISA), becoming one of the first global social entertainment companies to establish a regional headquarters in Saudi Arabia, which will help the company further strengthen its localization barriers in the Middle East market.

At the same time, the company is also actively exploring markets in Southeast Asia, Japan and South Korea, and North America, seeking diverse growth opportunities. Among them, the multi-diverse social business continues to focus on the overseas market, and the Global diverse social platform HeeSay further consolidates its advantageous position in Southeast Asia. By enriching social functions and deepening ecological operations, HeeSay continuously enhances the community attributes of its products and strengthens users' sense of identity with the community through a series of offline activities, further increasing brand influence.

Boutique games have started to become profitable and have entered the recovery cycle.

While actively promoting the strategic layout of core social business, the company continues to invest in innovative business sectors such as boutique games and social e-commerce, with the "second growth curve" represented by boutique games gradually becoming clearer.

Among them, boutique games independently developed by the company and delivered for external distribution achieved a revenue of approximately 0.705 billion yuan, an increase of about 80.4% compared to 2023. It is worth noting that in 2024, the boutique gaming business contributed revenue to NEWBORNTOWN for the first time, indicating that this business has entered a profitable stage.

With the continuous integration of AI technology into the entire Business process, the boutique gaming sector continues to make breakthroughs. Among them, the flagship game Alice's Dream: Merge Games has performed remarkably, having topped industry charts released by well-known data institutions multiple times and won awards such as "Outstanding Overseas Game of the Year."

In recent years, NEWBORNTOWN has been upgrading its business model from a "strong operation" approach to a strategy driven by product diversification and AI technology, forming a high-quality, scalable growth model through the synergy of "product + operation + growth." This has significantly improved its competitiveness in the global market by achieving comprehensive advancement in user scale, revenue scale, and growth quality. In February this year, NEWBORNTOWN was included in the MSCI Global Small Cap Index; this is the company's recent re-entry into a globally authoritative Stocks index after being included in the FTSE Index last September, further enhancing its influence in the global Capital Markets.

The company also demonstrates its firm confidence in future development through concrete actions, having repurchased approximately 43 million shares, totaling over 0.14 billion HKD in 2024. In the future, the company will resolutely advance the "bush" strategy, enhance AI empowerment, and continue to use diversified products to cover more segmented tracks in the global social entertainment market, creating more emotional value for users.