Everbright Securities initiated coverage on NEWBORNTOWN (09911), a leading Chinese social platform company expanding globally, assigning a "Buy" rating with a target price of HK$14.5. As one of the top 10 non-gaming Chinese companies in overseas revenue, NEWBORNTOWN has achieved extensive penetration in emerging social entertainment markets, particularly in the Middle East, North Africa, and Southeast Asia, through refined localization and a successful "product + country" replication strategy. Key highlights from the report include:

1. **Core Social Business**: NEWBORNTOWN operates as a leading global social entertainment platform, primarily serving diverse cultural demographics, especially in MENA. Since 2022, the company has accelerated growth via mergers, acquisitions, and in-house incubation, expanding into gaming and other innovative sectors. In H1 2025, revenue surged 40% YoY to RMB 3.181 billion, with SUGO and TopTop both exceeding 100% revenue growth. Net profit attributable to shareholders reached RMB 489 million, yielding a 15.4% net margin.

2. **Dual-Pronged Social Strategy**: - **Mass Social Segment**: Contributing over 70% of 2024 revenue, this segment employs a "shrub cluster" product matrix (MICO, YoHo, TopTop, SUGO) covering live streaming, voice chat, and gaming-based socializing. The company leverages a "product + country" replication model, focusing on MENA and Southeast Asia, supported by 800+ localized staff across 20+ countries. - **Niche Social Segment**: The acquisition of BlueCity bolstered offerings for LGBTQ+ communities via Blued and Finka, achieving 7.45 million MAUs in 2024, with 47% DAU/MAU and 74% month-on-month retention.

3. **Innovation-Driven Growth**: - **Mobile Games**: The hit title *Alice's Dream: Merge Games* (60% YoY revenue growth in 2024, nearing $10M monthly revenue) exemplifies the "merge+" strategy, with plans to replicate its success. - **Social E-Commerce**: Expansions include BlueCity Health and Mr. Hormone, diversifying user bases. - **AI & Short-Form Video**: NEWBORNTOWN is developing AI Agent tools and the Aippy community while gaining traction in short-video content for Southeast Asia and the Americas.

**Earnings Outlook**: Everbright forecasts 2025-27 revenue of RMB 6.90/8.41/9.70 billion and net profit of RMB 950 million/1.24 billion/1.49 billion, reflecting 97.0%/31.3%/19.7% YoY growth, driven by diversified monetization and high short-to-mid-term visibility.