Broker Name: China Galaxy International Securities (Hong Kong) Co., Limited
Date of Report: March 11, 2026
Excerpt from China Galaxy International Securities report.
- Newborn Town Inc is a global tech company focused on stranger social apps and casual games, with a strong presence in MENA and ASEAN markets and a diversified portfolio including SUGO, TopTop, MICO, YoHo, etc.
- The company has shown robust growth, with downloads jumping from 254m in 2021 to 970m in 2025, and monthly active users increasing from 18m to 35m over the same period.
- Revenue is driven mainly by in-app purchases and virtual gifting, with FY25 sales estimated at Rmb7bn and net profit at Rmb916m. The forecast is for total sales to reach Rmb10.9bn and net profit Rmb1.7bn by FY28, equating to a 21% and 37% CAGR respectively.
- Newborn Town’s “Bush Strategy” focuses on a diversified app portfolio, mitigating trend and user migration risks. The company continues to launch new apps, leveraging operational experience and cross-app synergies.
- Key products SUGO and TopTop are still in an upcycle, expanding into new regions like Japan, Korea, Europe, and North America, targeting markets with higher ARPU and larger populations.
- Innovative business segments (casual games, short dramas, AI-driven content like Aippy) are expected to grow at a 27% CAGR through 2028, contributing to revenue diversification.
- The company faces risks from regulatory tightening, geopolitical tensions (especially in MENA), competition from global and local tech giants, and currency volatility.
- Valuation is set at a target price of HK\$14, based on 12x FY27 P/E, justified by strong EPS growth and expected inclusion in Stock Connect for greater liquidity.
- Key re-rating catalysts include accelerated MAU growth, successful new product launches, and expansion into new business segments.
Report Summary:
- Newborn Town Inc is rapidly growing in the global stranger social app and casual games segment, leveraging a diversified portfolio and robust regional expansion.
- The company’s innovative strategy, strong operational performance, and focus on emerging markets underpin its forecast for continued high growth, despite regulatory and geopolitical risks.
Above is an excerpt from a report by China Galaxy International Securities (Hong Kong) Co., Limited. Clients of China Galaxy International Securities (Hong Kong) Co., Limited can be the first to access the full report from the China Galaxy International website: https://www.chinastock.com.hk/
