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NEWBORN TOWN INC.
赤 子 城 科 技 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 9911)
This announcement is made by Newborn Town Inc. (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).
The board of directors (the "Board") of the Company hereby informs the shareholders of the Company and potential investors that, based on the preliminary review of the unaudited consolidated management accounts of the Group for the six months ended 30 June 2020 and other information currently available to the Company, it is expected that, for the six months ended 30 June 2020, (i) the Group will record a net loss of not more than RMB3 million as compared with a net profit for the corresponding period in 2019; and (ii) the Group will record positive adjusted net profit, down by more than 50% as compared with the corresponding period in 2019. This is primarily attributable to: (i) in respect of the expected net loss, the shared-based compensation expenses due to completion of grant of the restricted share units by the Company in the first half of the year to better attract and motivate employees in the long term; and (ii) in respect of the expected net loss and decrease in adjusted net profit, the decrease in revenue from the Company's programmatic advertising platform business as compared with the corresponding period in 2019 as the Company scaled down the development of such business in view of the outbreak of novel coronavirus epidemic and economic downturn, and the Company's increased efforts in research and development and promotion on its social networking apps and game apps.
Adjusted net profit is defined as profit/(loss) for the period adjusted by share-based compensation expenses, listing expenses and fair value changes of convertible redeemable preferred shares after deducting their respective tax effects.
The Company completed the consolidation of financial statement of Beijing Mico World Technology Co., Ltd. in June 2020. In addition, the Company implemented the "Traffic+" strategy, actively diversified the product mix and expanded the scale of the social networking segment. The Company recorded a considerable increase in both the revenue of game apps and social networking apps as compared with the corresponding period in 2019. The Company will continue to expand the scale of game apps and social networking apps to further increase its revenue, so as to maximise returns for shareholders of the Company.