West Bull Securities Maintains "Buy" Rating on NEWBORNTOWN (09911) with Target Price of HK$13.2

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West Bull Securities has reiterated its "Buy" rating on NEWBORNTOWN (09911) and maintained a target price of HK$13.20 per share, reflecting confidence in the company's resilient business fundamentals and future recovery. Despite sustained financial and operational stability, the group's stock recently experienced significant adjustments due to legal disputes, raising market concerns over governance and potential equity dilution. The brokerage views these challenges as short-term, with no impact on operational fundamentals or the full-year revenue target.

NEWBORNTOWN reaffirmed its FY2025 total revenue guidance of RMB6.8 billion to RMB7.0 billion. For the nine months ending September 2025, the company expects social networking revenue to reach approximately RMB4.38 billion to RMB4.44 billion, up 34.5%–36.4% year-on-year. Average monthly active users (MAUs) for its social networking segment in Q3 2025 rose 0.7% quarter-on-quarter to around 34.08 million. Meanwhile, revenue from innovative businesses is projected at RMB530 million to RMB550 million, representing a robust 69.9%–76.3% annual growth.

The social networking segment continues to demonstrate strong monetization momentum, supported by flagship apps Sugo and TopTop, each generating over $10 million in monthly revenue. The proprietary AI-powered tool Boomiix has significantly improved key metrics such as user engagement time, payment conversion, and average revenue per user (ARPU), playing a crucial role in market expansion and social matching efficiency.

The report highlights diversified growth in NEWBORNTOWN’s innovative businesses, driving margin improvements. Based on mid-range estimates, Q3 2025 revenue from this segment hit a record RMB190 million, primarily fueled by traffic monetization and social e-commerce expansion. Premium games like Alice's Dream further contributed to margin enhancement, with the group’s proven ability to replicate monetization models and innovate gameplay reinforcing medium-term growth prospects.

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