Newborn Town Announces 2021 Interim Results, Appoints Li Ping as CEO

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Newborn Town Inc. (9911.HK), the largest social-networking company going global in China, reported significant revenue growth and net profit resulting from the rapid development of social-networking products and remarkable growth in its value-added service business, according to the company’s Aug. 25 announcement of interim financial results. 

Newborn Town also announced that former President Li Ping has been appointed CEO. Newborn Town Chairman Liu Chunhe will focus on the company’s strategies, organizational construction and social value in order to continue to create greater and longer-term value for the company’s development.

1st Half 2021 Revenue Reaches Over RMB 1 Billion; Net Profit Increases 40-Fold

Newborn Town’s report shows its total revenue reached 1.04 billion Ren Min Bi (RMB), or $160.7 million, for the 6 months ending June 30, representing a nearly 6-fold year-over-year growth rate. Revenue from its value-added service business reached about RMB 0.82 billion ($126.7 million) —  equivalent to 50-fold year-over-year growth — and accounted for 79.1% of total revenue.

The company's profit for the period reached about RMB 0.14 billion ($21.6 million), representing a 40-fold year-over-year increase while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased nearly 8-fold year-over-year to RMB 0.18 billion ($27.8 million).

In the 1st half of the year, the company increased investments in product research and development, expanded its research and development (R&D) team to 276 members and spent nearly 4 times as much on R&D expenses year-over-year. Meanwhile, the company’s operating efficiency greatly improved, resulting in a revenue created per employee of RMB 2.02 million ($157,617).

The substantial growth in revenue and profit was driven by the rapid development of social-networking business. In the 1st half of 2021, the average number of monthly active users (MAU) of the company's social products reached 17.41 million, representing an increase of 38% compared to the 2nd half of 2020. The breakthroughs in developed markets have resulted in the continuous increase in average revenue per user (ARPU) of social-networking products.

Social Products Well Received Worldwide, Enjoy Significant Growth in Developed Markets

In the past 2 years, Newborn Town has actively expanded into developed markets. In the 1st half of the year, its social products grew rapidly in developed markets such as Europe, North America, Japan and South Korea with continuous enhancement in user value.

Newborn Town’s flagship product MICO is among the list of top 5 highest-grossing social applications in Canada, Sweden, Switzerland, Belgium, Portugal and other developed countries. In addition, the voice-chat social product YoHo has entered the list of top 10 highest-grossing social applications in the U.S., France and other European and North American countries. Such remarkable results have demonstrated strong competitiveness of the company’s social products in developed markets.

Co-Founder and Former President Li Ping Appointed as CEO

On Aug. 25, the Newborn Town board of directors appointed Li Ping as the new CEO. Ling will be fully responsible for the business management of the company. Liu Chunhe, who has resigned as the CEO, will continue to serve as chairman and focus on the company’s strategies, organizational structure and social value in order to continue to create greater and longer-term value for its development.

Before being named CEO, Ping held several positions with the company, including chief operating officer and president. 

He has a thorough understanding of the global internet market and is experienced in product development, operations and market expansion. He has been named to  Forbes 30 Under 30 Asia and Hurun China Under 30s to Watch lists.

In 2013, Ping directed the design and development of the company's 1st global product Solo Launcher, which quickly accumulated more than 100 million users. The development team was certified by Google as Global Top Developer. In 2015, Ping created the Shuffle advertising model and obtained a patent, leading to a new trend in the industry.

Over the years, Ping has led Newborn Town in its expansion into the global market, and the development of numerous epic social and gaming products as well as the creation of the ecosystem of global traffic, which contributed to the company’s continuous business growth.

Looking ahead, Ping will be responsible for the Newborn Town’s business management and lead the company to achieve greater success.

Focus on Scaling Expansion to Achieve an All-Around Growth 

During the interim results presentation, Ping said the company would strive to scale up its business and further increase investment to achieve all-around growth.

Regarding product planning, the company will continue to plow deeply into the open social-networking sector with a strategic focus on developing video and audio products. The company will optimize core products and improve user duration and stickiness to promote growth in its user base, revenue and profit. 

Regarding market development, the company will continue to expand into developed markets and put additional resources into its operations in North America, Europe, Japan and South Korea to expand its user base and product popularity. The company also will explore more potential markets to further improve its global layout of social-networking business. 

The company will focus on appealing to younger people such as Generation Z as it explores emerging technologies and business models.

All in all, Newborn Town maintained rapid growth in the 1st half of the year, with breakthroughs in revenue, net profit and user base. As the company further improves its strategic planning for long-term development and investments, sustainable and rapid growth can be expected.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.