Newborn City Inc. (9911.HK), the largest global social networking company in China, saw significant sales growth and net profit due to the rapid development of social networking products and remarkable growth in its value-added services business, the company said on Aug. 25 Announcement of the interim results.
Newborn Town also announced that former President Li Ping has been named CEO. Newborn Town Chairman Liu Chunhe will focus on the company’s strategies, organizational structure and social value to continue to create greater and longer-term value for the company’s development.
Sales in the 1st half of 2021 reach over 1 billion RMB; Net profit increases 40 times
Newborn Town’s report shows that total sales for the six months ended June 30 reached 1.04 billion Ren Min Bi (RMB), or $ 160.7 million, almost six times the year-over-year growth rate. Revenue from its value-added services business reached approximately RMB 0.82 billion ($ 126.7 million) – up 50 times over the previous year – and accounted for 79.1% of total revenue.
The company’s profit for the reporting period reached approximately RMB 0.14 billion ($ 21.6 million), a 40-fold increase over the previous year, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were almost year-over-year has increased eight times. to RMB 0.18 billion (USD 27.8 million).
In the first 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 almost four times as much on R&D compared to the previous year. Meanwhile, the company’s operational efficiency improved significantly, resulting in sales of RMB 2.02 million (US $ 157,617) per employee.
The significant growth in sales and earnings was driven by the rapid development of the social networking business. In the 1st half of 2021, the average monthly active users (MAU) of the company’s social products reached 17.41 million, an increase of 38% over the 2nd half of 2020. The breakthroughs in developed markets have resulted in a steady increase in the average sales per user (ARPU) of social networking products.
The story goes on
Social products are well received around the world and enjoy significant growth in developed markets
In the past 2 years, Newborn Town has been actively expanding into developed markets. In the first half of the year, its social products grew rapidly in developed markets such as Europe, North America, Japan, and South Korea with continual increases in user benefit.
Newborn Town’s flagship product MICO is among the top 5 top-selling social apps in Canada, Sweden, Switzerland, Belgium, Portugal and other developed countries. In addition, the voice chat social product YoHo has been included in the list of the top 10 top-selling social media applications in the US, France and other European and North American countries. These remarkable results have shown that the company’s social products are highly competitive in developed markets.
Co-founder and former President Li Ping named CEO
On August 25, the Newborn Town Board of Directors named Li Ping as its new CEO. Ling will have full responsibility for running the company. Liu Chunhe, who has stepped down as CEO, will continue to serve as Chairman and focus on the company’s strategies, organizational structure and social value to continue to create greater and longer-term value for its development.
Prior to his appointment as CEO, Ping held a number of 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 was included on watchlists in Forbes 30 Under 30 Asia and Hurun China Under 30s.
In 2013, Ping led the design and development of the company’s first global product, Solo Launcher, which quickly garnered more than 100 million users. The development team has been certified by Google as a Global Top Developer. In 2015, Ping developed and patented the Shuffle advertising model, which started a new trend in the industry.
Over the years, Ping has led Newborn Town in its expansion into the world market and the development of numerous epic social and gaming products, as well as the creation of the global traffic ecosystem, which has contributed to the company’s continued business growth.
Looking ahead, Ping will be responsible for running Newborn Town and leading the company to greater success.
Focus on scaling up for massive growth
While presenting the interim results, Ping said the company is committed to expanding its business and further increasing investments in order to achieve comprehensive growth.
In product planning, the company will continue to dig deep into the open social networking space, with a strategic focus on developing video and audio products. The company will optimize its core products and improve longevity and retention to drive growth in its user base, revenue and bottom line.
In terms of market development, the company will continue to expand into developed markets and invest additional resources in its operations in North America, Europe, Japan and South Korea to expand its user base and product popularity. The company will also explore other potential markets to further improve its global social networking business layout.
The company will focus on targeting younger people like Generation Z while exploring new technologies and business models.
All in all, Newborn Town saw rapid growth in the first half of the year with breakthroughs in revenue, net income and user base. As the company continues to improve its strategic planning for long-term development and investment, sustained and rapid growth can be expected.
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