20250623-西牛证券-赤子城科技-09911.HK-A_revaluation_brought_by_favourable_environment_and_robust_growth_potential_5页_177kb

Newborn Town (09911.HK) Research Summary

Key Highlights

• Revenue Growth:

  • Social Networking Segment: YoY growth of 39.1%-44.3% in Q1 2025.
  • Driven by AI technology adoption and improved recommendation algorithms.
  • Sugo achieved USD 24mn monthly revenue and 4mn MAUs.
  • Performance rebounded in May, minimal impact from geopolitical tensions.

• Innovative Business:

  • YoY growth of 66.7%-88.2% in Q1 2025.
  • Niche games and social e-commerce platforms fuelled growth.
  • "Alice’s Dream" delivered strong replication capabilities, expected to reach break-even faster.

• Strategic Moves:

  • Established Global Headquarters & AI Research Center in Hong Kong to leverage talent, mature markets, and international business environment.
  • Plans to pursue high-potential acquisitions, supported by substantial cash reserves.

• Valuation:

  • Target Price: HK$12.90 (Up from HK$5.73)
  • Stock Rating: BUY (Maintained from previous)
  • Factors: Positive macro trends (Chinese stocks, risk-free rate peak), strong growth potential, robust financial performance.

Financial Performance (Q1 2025)

Peer Comparison

Risks

• Unsustainability of Sugo and TopTop performance.
• Geopolitical instability in MENA region.
• Marketing expense control challenges.
• Difficulty replicating "Alice’s Dream"'s performance in other niche games.

Financial Ratios