Newborn Town FY2026 Q2 Earnings Release

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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its \
accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or\
in reliance upon the whole or any part of the contents of this announcement.
NEWBORN TOWN INC. ìŦޔ®!
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 9911)
ANNOUNCEMENT OF INTERIM RESULTS FOR
THE SIX MONTHS ENDED 30 JUNE 2026
The board of directors (the “
Board ”
) of Newborn Town Inc. (the “
Company ”
) is pleased
to announce the unaudited condensed consolidated interim results of the Company and its
subsidiaries (collectively the “
Group ”
) for the six months ended 30 June 2026. The interim results
have been reviewed by the Audit Committee, and by KPMG in accordance wit\
h Hong Kong
Standard on Review Engagements 2410 “
Review of Interim Financial Information Performed
by the Independent Auditor of the Entity ”
issued by the Hong Kong Institute of Certified Public
Accountants. KPMG ’
s unmodified review report is included in the interim report to be sent \
to the
Shareholders.
In this announcement, “
we ”
, “
us ”
, and “
our ”
refer to the Company and where the context otherwise
requires, the Group.
FINANCIAL HIGHLIGHTS
• Revenue from contracts with customers for the six months ended 30 June 2\
026 amounted to USD606.9 million, representing an increase of 37.0% from USD442.8 mil\
lion recorded
for the six months ended 30 June 2025.
• Gross profit for the six months ended 30 June 2026 amounted to USD351.0 million, representing an increase of 42.1% from USD247.1 million recorded for the six months
ended 30 June 2025.
• Profit for the period for the six months ended 30 June 2026 amounted to \
USD99.7 million, representing an increase of 41.2% from USD70.6 million recorded for the \
six months ended
30 June 2025.
• Profit attributable to equity shareholders of the Company for the six mo\
nths ended 30 June 2026 amounted to USD99.3 million, representing an increase of 45.8% from\
USD68.1
million recorded for the six months ended 30 June 2025.
• Profit attributable to equity shareholders of the Company adjusted for the six months ended 30 June 2026 amounted to USD101.0 million, representing an increase of 1\
8.7% from
USD85.1 million recorded for the six months ended 30 June 2025.
• Adjusted EBITDA for the six months ended 30 June 2026 amounted to USD111\
.1 million, representing an increase of 23.6% from USD89.9 million recorded for the \
six months ended
30 June 2025.

2Six months ended 30 June
2026 2025
USD’
000 USD’
000
(unaudited) (unaudited)
(re-translated)
Revenue from contracts with customers 606,860442,845
Gross profit 351,013247,104
Profit before income tax 100,03370,506
Profit for the period 99,74670,567
Basic earnings per share (expressed in USD per share) 0.080.05
Diluted earnings per share (expressed in USD per share) 0.070.05
Operating profit 88,96566,732
Add:
Share-based compensation expenses (1)(2) 11,606 (2) 17,116 (1)
Depreciation and amortization 10,5436,039
Adjusted EBITDA 111,11489,887
Notes:
(1) In March 2023, March 2024, May 2024, March 2025 and May 2025, the Board \
approved the respective grants
of an aggregate of 2,441,170 RSUs, 4,778,877 RSUs, 659,668 RSUs, 30,316,\
184 RSUs and 897,415 RSUs to
certain employees and management pursuant to the RSU Schemes. In Decembe\
r 2024, the Board approved the
grant of RSUs to certain employees and management, including 22,215,102 \
RSUs as the modification of a share
incentive plan adopted by a subsidiary of the Company. Share-based compe\
nsation expenses were recognised
based on the respective vesting periods of the grants under the RSU Sche\
mes, and amounted to approximately
USD16,461,000 for the six months ended 30 June 2025, tantamount to the e\
conomic benefits which certain
employees and management obtained from the Company. For further details,\
please refer to the announcements
dated 24 March 2023, 22 March 2024, 21 May 2024, 20 March 2025 and 21 Ma\
y 2025 of the Company.
On 30 August 2021, the Board granted in aggregate 80,000,000 Share Optio\
ns to 32 eligible persons. The grant
comprises performance-based Share Options, which are generally vested within 10 years. Share Options of each
grantee are to be vested in four tranches subject to the fulfilment of c\
ertain performance targets that are tied to
the Company ’
s ability to deliver on certain key indicators. With respect to the fore\
going grant, the performance
targets and whether and to what extent achieved were determined by the Board. For the aforementioned
grants, evaluations were made on 30 June 2025 to assess the likelihood of the performance targets being met.
Share-based compensation expenses amounting to approximately USD655,000 were recognised for the six
months ended 30 June 2025.

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(2) In March 2023, March 2024, May 2024, March 2025, May 2025, March 2026 an\
d June 2026, the Board approved the respective grants of an aggregate of 2,441,170 RSUs, 4,778,\
877 RSUs, 659,668 RSUs, 30,316,184
RSUs, 897,415 RSUs, 12,747,486 RSUs and 2,181,919 RSUs to certain employ\
ees and management pursuant
to the RSU Schemes. In December 2024, the Board approved the grant of RS\
Us to certain employees and
management, including 22,215,102 RSUs as the modification of a share inc\
entive plan adopted by a subsidiary
of the Company. Share-based compensation expenses were recognised based \
on the respective vesting periods
of the grants under the RSU Schemes, and amounted to approximately USD11\
,606,000 for the six months ended
30 June 2026, tantamount to the economic benefits which certain employee\
s and management obtained from the
Company. For further details, please refer to the announcements dated 24\
March 2023, 22 March 2024, 21 May
2024, 20 March 2025, 21 May 2025, 26 March 2026 and 30 June 2026 of the \
Company.

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BUSINESS HIGHLIGHTS
Continued market l\feadership of fagshi\fp products with
globali\bation 2.0 yi\felding results acro\fss multiple market\fs
Pan-audience social networking business MICOY
oHo
TopTop
SUGO Innovative business
Diverse-audience social networking business Blued
HeeSay
Finka
Alice’s Dream Heer Health
Deep integration of\f AI capabilities wi\fth reali\bation of
enhanced effciency\f across the entire\f business chain
Sustained robust gr\fowth in revenue and\f
proft with steady i\fmprovement in qual\fity of earnings
Revenue amounted to US$ 607 million
increased by
37.0 % period-on-period
Adjusted EBITDA amounted to
US$
111  million
increased by
23.6 % period-on-period
Proft attributable to equity shareholders of the
Company amounted to US$
99  million
increased by
45.8 % period-on-period
Proft for the period
amounted to US$
100  million
increased by
41.2 % period-on-period
Revenue of SUGO grew by over 60% period-on-period, while revenue of
TopTop increased by approximately 30% period-on-period
The business scale of core social products  in the Middle East and
North Africa (“MENA”) region increased by more than 30% Empowered by AI, the launch effciency of short drama content
improved by 60%+
The commercialization of three new niche games progressed smoothly,
gradually demonstrating their potential for large-scale growth
Social netwo\bking busi\ ness I
nnovative business
AI+
Social networking
Boomiix ∙ Self-Developed multimodal algorithm model  *OUFMMJHFOUEFTJHOQMBUGPSN
“,*7*”
Intelligent data platform
“Siyu” Intelligent advertising

d elivery platform
“Mofang”€­Ù,
“Miaomiao ”€vv O
ptimizing user
experience
Improving operational
effciency for products
U pgrading business
decision-making
Enhancing advertising
delivery effciency
AI+
Entertainment A
I+Gaming
∙∙∙
A pplication Laye\b
Platfo\bm Laye\b Model Laye\b AI ecosystem footprints: Aippye NUSD PayeViggle AI……
TopTop SUGO
TopTop ranked among the Top 10 on Casual Free
Games chart on iOS in multiple countries, including
Japan, South Korea, and France
SUGO ranked among the TOP 10 on Top Grossing
chart for Social Networking Apps on iOS in
multiple countries, including Brazil, Mexico,
France, and Germany Latin
Ame\bica Eu\bope
…
Playlet
Japan and
South Ko\bea
$ $
$
$

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CHAIRMAN
’
S STATEMENT
Dear Shareholders:
The first half of 2026 marked a critical phase for the Company to furthe\
r advance its globalization
strategy in depth. During the Reporting Period, the Company ’
s performance maintained robust
growth, and a multi-market growth landscape took shape at an accelerated pace. Fuelled by
breakthroughs of core products in various new markets, continuous advanc\
ement of AI capabilities
and steady growth of innovative business, the Company achieved steady im\
provements in revenue
scale, profitability and operational quality, with sustained strengthening of long-term growth
momentum.
During the Reporting Period, the Company ’
s total revenue amounted to US$607 million,
representing a period-on-period increase of 37.0%; Profit for the period\
amounted to US$100
million, representing a period-on-period increase of 41.2%; Adjusted EBITDA amounted to
US$111 million, representing a period-on-period increase of 23.6%; Profit attributable to equity
shareholders of the Company amounted to US$99 million, representing a pe\
riod-on-period increase
of 45.8%, registering substantial growth. Among these, the social networ\
king business maintained
robust growth with revenue of US$539 million, representing a period-on-period increase of
36.5%. The innovative business maintained rapid growth, achieving revenu\
e of US$68 million,
representing a period-on-period increase of 41.2%.
Such growth was attributable to the continued rollout and in-depth imple\
mentation of the “
Country
Replication + Product Replication ”
strategy. In the first half of this year, the Company achieved
remarkable results in global business expansion. While continuously cons\
olidating competitive
barriers in advantageous markets including the MENA and Southeast Asia, the Company also made
positive progress to varying degrees in new markets such as Latin Americ\
a, East Asia, Europe and
North America, further expanding global user reach. With comprehensive e\
nhancements in product
capabilities, operational capabilities, organisational capabilities and \
AI capabilities, alongside the
continuous refinement of a multi-product and multi-market framework, the\
Company ’
s systematic
advantages have become more prominent, while its competitiveness and inf\
luence within the global
social entertainment industry keep rising.
During the Reporting Period, AI technology emerged as a key driver to el\
evate operational quality
and efficiency across the Company ’
s businesses. In the first half of the year, the Company ’
s Token
consumption surged more than 100 times period-on-period, reflecting deep integration of AI
technology across all business links including research and development,\
operations and marketing.
Within social products, AI has been widely deployed in key links such as recommendation
matching, social assistance, intelligent operations, creative material design and security risk
control, continuously boosting product operational efficiency and optimising user experience. In
marketing and user acquisition, the Company built an AI marketing closed\
-loop covering viral
material identification and large-scale production, creative generation, intelligent advertising
placement and placement management. In addition, the Company continued t\
o push forward the
layout of AI applications and explore more possibilities for integrated development of artificial
intelligence and social entertainment.
Furthermore, the Company actively promoted brand operations in key markets. Through a
wide range of user and brand initiatives including annual creator galas, in-platform thematic
campaigns and offline advertisements, the Company raised the profile of \
its flagship products and
strengthened connections with local markets.

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At the beginning of the year, the Company was included in the list of Ho\
ng Kong Stock Connect
securities, further enhancing share liquidity and broadening access for \
Chinese mainland investors.
Upholding a long-term philosophy, the Company has consistently carried o\
ut share repurchases and
cancellations. During the Reporting Period, the Company repurchased 10,2\
06,000 Shares at a total
consideration in excess of HK$85 million, and cancelled 5,174,000 Shares\
. The Board believes that
Share repurchases and cancellations are conducive to enhancing long-term\
Shareholder value, and
holds full confidence in market prospects and the outlook for the Compan\
y ’
s own businesses.
While generating commercial value, the Company actively fulfilled its so\
cial responsibilities. In
the first half of the year, the Company continued to advance the “
TEEN in FOCUS ”
(ÇËÂ
Œ ). We donated football training equipment to underprivileged children i\
n markets including
Thailand, Mexico and Egypt to support youth development. Meanwhile, the \
Company donated
funds and supplies to orphanages in Indonesia, provided support for chil\
dren with cancer in Egypt,
and partnered with charitable organisations in Turkey to donate funds for critically ill children and
vulnerable groups, giving back to local communities through concrete act\
ions.
I hereby present the Company ’
s financial position and operational highlights for the first half of
2026, and summarise the strategies and outlook of the Company for the se\
cond half of 2026.
BUSINESS REVIEW
I. Social networking business: Flagship products maintaining leading position with multiple breakthroughs in global footprint
In the first half of this year, the Company ’
s pan-audience social networking business
maintained strong growth momentum. Core products gained traction in more\
countries and
regions, product capabilities were continuously enhanced, user scale and\
revenue scale rose in
tandem, the systematic advantages of the “
Multi-product + Multi-market ”
framework became
more evident, and overall competitiveness and global influence kept impr\
oving.
During the Reporting Period, revenue of companion-based social platform \
SUGO increased
by over 60% period-on-period. Its user scale expanded substantially, cor\
e metrics including
activity level and payment rate maintained positive trends, and progress\
in global rollout was
encouraging. In Latin America, SUGO consistently ranked among the top te\
n iOS social apps
by revenue in multiple countries. In East Asia, SUGO demonstrated robust\
commercialisation
capacity with standout performance in metrics such as DAU payment rate a\
nd new user Day
1 payment rate. In Europe, SUGO repeatedly secured a top ten position on\
the iOS social
app revenue charts in multiple countries. In traditional advantageous ma\
rkets including the
MENA and Southeast Asia, SUGO sustained its leading position, ranking am\
ong the top three
social apps by revenue in Saudi Arabia and the United Arab Emirates, and climbed into the
top three of corresponding rankings in Thailand and Malaysia during the \
Reporting Period
(1).
As a flagship product entrenched in the companion-based social track, SU\
GO has further
validated the replicability of its business model and outstanding produc\
t capabilities amid
expansion into new markets, evolving into a new-generation mainstream so\
cial platform with
global attributes.

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In the first half of the year, game-oriented social platform TopTop cont\
inued to deepen its
presence and deliver multiple breakthroughs across high-value markets, w\
ith revenue rising
by approximately 30% period-on-period. In East Asia, TopTop repeatedly e\
ntered the top
ten of the iOS casual game free download chart
(2), achieving substantial user growth and
accelerated monetisation of user value. In European markets, TopTop actively nurtured
community ecosystems and built market awareness. Meanwhile, TopTop succe\
ssfully entered
the North America market. Tailoring its product and operational strategi\
es to local social
norms and demands of segmented user groups, it achieved dual breakthroug\
hs in user scale
and revenue scale, paving the way for promising future growth.
With continuous improvements in product and operational sophistication, together with
ongoing exploration of global markets, TopTop ’
s distinctive “
social + game ”
product
model and high-stickiness UGC community ecosystem are generating increas\
ingly strong
“ compounding effects ”
. In the long run, TopTop has grown into one of the leading products
in the global game-oriented social sector
(3), and continues to expand into higher-value markets
and broaden its user reach.
During the Reporting Period, the Company ’
s live-streaming social networking platform MICO
and audio social networking platform YoHo maintained leading positions i\
n their respective
niche segments. MICO consistently occupied high rankings on the iOS soci\
al app revenue
charts in markets including Saudi Arabia, the United Arab Emirates and T\
hailand. YoHo
regularly featured among the top ten iOS social apps by revenue in core \
MENA markets such
as Oman and the United Arab Emirates
(4). Both products maintained sound competitiveness
in multiple advantageous markets and continued to refine localised opera\
tions and content
ecosystem development.
In the first half of the year, the Company ’
s diverse-audience social networking business
registered steady development. HeeSay, a global social community targeting diverse
audience groups, steadily strengthened its influence in Southeast Asia, its core market,
consistently ranking among the top ten iOS social apps by revenue in the Philippines and
other countries
(5). At the start of the year, HeeSay hosted its annual user gala in Thaila\
nd and
launched the user interview programme He So Glam. Through continuous opt\
imisation of
community operations and enrichment of its content ecosystem, its global\
brand influence
kept rising.
II. Innovative business: Breakthrough growth of new businesses and accelerat\
ed formation of the second growth curve
In the first half of this year, the Company ’
s innovative business maintained sound growth
momentum. Businesses including niche games, short dramas and social e-co\
mmerce advanced
steadily, positive progress was made in commercialization exploration, a\
nd the second growth
curve took shape at an accelerated pace.
Among them, the niche games business developed steadily. Flagship games sustained
long-term operation and profit generation, contributing stable profits to the Company.
Leveraging the continued reuse of mature R&D and operational experience,\
the game team
further enhanced its capability to develop new titles. Three new titles achieved smooth
commercialisation during the Reporting Period, with solid performance in\
metrics such as
retention rate and payment conversion rate, gradually demonstrating scal\
ing potential.

8
In the first half of this year, short drama platform Playlet achieved du\
al leaps featuring
“ AI-driven restructuring + global breakthroughs ”
, alongside all-round improvements in
user quality, operational efficiency and content mix. On the market fron\
t, while retaining
its advantages in North America, a four-pillar growth engine covering “
Europe + East Asia
+ Latin America + Southeast Asia ”
has gradually taken shape. On the content front, AI
unlocked production capacity, lifting content launch efficiency by over \
60%, facilitating the
development of a more efficient content infrastructure and completing th\
e transition of the
content supply engine. On the user front, metrics including average view\
ing duration per user,
payment conversion rate and Day 1 retention rate improved simultaneously\
, with continuous
deepening of user consumption and platform stickiness.
During the Reporting Period, the professional barriers of the Company ’
s social e-commerce
business in HIV prevention and sexual health services were further conso\
lidated. Heer Health
( ƒ’

p ) collaborated with Tsinghua University to complete China ’
s first real-world
research focusing on PrEP users on online platforms, and the research findings were accepted
and presented at the 26th IAS ( K26 ¢
7ç¿ 7}6ôlÙ ) Conference. Meanwhile, the
Heer Health Online Hospital was included in the “
HIV Prevention ”
mini-programme operated
by the National Center for AIDS/STD Control and Prevention €#•Ð, China CDC €•

7 6
›•Ð , becoming the only online platform in Shandong Province outside the CDC and
hospital systems to be featured.
III. Accelerated implementation of AI application, and remarkable results fro\
m full-chain empowerment
In recent years, the Company has firmly advanced its AI strategy, fully embraced AI
technologies, accelerated in-depth integration of AI with all businesses\
and improved the
layout of AI products. At present, AI has emerged as one of the key forc\
es driving quality
improvement, efficiency enhancement and sustained global breakthroughs across the
Company ’
s businesses.
On one hand, the Company continues to deeply apply AI capabilities to optimise product
experience and lift operational efficiency. Intelligent tools and standa\
rdised workflows help
boost efficiency across all business procedures. During the Reporting Pe\
riod, the Company ’
s
AI capabilities were deployed on a large scale in key links including pr\
oduct R&D, user
matching, operational management, content moderation and marketing place\
ment, providing
solid support for high-quality business development.
In terms of marketing placement, Mofang, the intelligent creative produc\
tion platform, works
closely with Miaomiao, the intelligent placement platform, forming a fully AI-powered
efficient closed-loop covering viral content identification, material cr\
eation, price adjustment
and placement management. Taking SUGO as an example, AI-driven placement\
in selected
markets has delivered a more than 25% reduction in CPI, alongside a mate\
rial improvement
in ROI. During the World Cup, the system enabled real-time identificatio\
n of market shifts
and optimisation of placement strategies, bringing continuous improvements in response
speed and advertising outcomes.
For product operations, Siyu AI, the Company ’
s self-developed AI intelligent data platform,
has continuously upgraded its analytical capabilities, compressing the processing cycle
of certain complex analytical tasks from days to minutes. KIVI, the AI i\
ntelligent design
platform, keeps expanding its design capabilities, further lifting the A\
I penetration rate for
artwork production within products, and markedly improving efficiency in\
creating virtual
gifts and UI interfaces as well as enriching operational activities.

9
Meanwhile, the Company continues to expand its AI application layout. Du\
ring the Reporting
Period, Aippy, the AI gaming community has achieved rapid growth. To dat\
e, it has recorded
nearly 4 million global downloads, with DAU surging approximately six-fo\
ld since the start
of the year, and its user retention metrics rank among the top in the in\
dustry. In addition,
the Company ’
s scope of AI application scenarios has been further expanded with the l\
ayout
of the AI Agent payment project NUSD Pay. The Company also continues to \
invest in the
AI industry, having backed projects spanning world models and AI-native \
game engines,
AI interactive games, AI advertising and marketing, further expanding it\
s AI application
landscape.
We believe that the transformation brought by AI technology to social en\
tertainment has
only just begun, alongside advances in AI technology and evolving user demands. Building
on market know-how, user insights and AI capability development, the Com\
pany will press
ahead with the layout of a global AI social entertainment ecosystem, ena\
bling AI to become
an important source for delivering positive emotional value.
STRATEGY AND OUTLOOK
I. Deepening cultivation in the global social entertainment sector, refining product and market layout
In the second half of the year, the social networking business will rema\
in the core driver
of the Company ’
s development. The global social entertainment market is still in a phase
of rapid expansion with ample market potential. Data released by Researc\
h and Markets in
January this year shows that the global social media platform market siz\
e is projected to grow
from approximately US$1.0 trillion in 2025 to US$1.34 trillion in 2026, \
and reach US$4.42
trillion by 2030
(6).
Drawing on the development trajectory of China ’
s internet industry, global demand for online
entertainment and social interaction continues to rise. There remains substantial room for
growth in industry penetration, product formats and commercialisation le\
vels. Particularly in
Latin America, MENA, South Asia and selected European markets, the indus\
try is passing
through a critical window of rapid development amid continuously escalat\
ing user demand
for online entertainment and social interaction. Companies equipped with capabilities in
product innovation, localised operations and global replication will con\
tinue to encounter
abundant growth opportunities across numerous markets.
Accordingly, the Company will continue to build on its flagship products\
to accelerate layout
in high-potential markets including Latin America, East Asia, Europe and\
North America,
and replicate core products such as SUGO and TopTop together with operat\
ional experience
across more countries and regions. Meanwhile, the Company will further d\
eepen its presence
in advantageous markets such as MENA and Southeast Asia, consolidate the\
competitive
advantages of its product portfolio across various niche segments, and further unlock user
value and commercial potential.

10
Tailoring offerings to user demands in different markets, we will contin\
uously upgrade our
products and deepen the application of AI in user understanding, social \
matching, content
moderation, marketing placement and other links, accelerating the develo\
pment of a social
entertainment product matrix delivering superior user experience and higher operational
efficiency. For markets where encouraging progress has been achieved, th\
e Company will
strengthen local teams and optimise allocation of operational resources.\
For markets still
under exploration, we will steadily build market insights and nurture local ecosystems.
By providing social connections that genuinely meet user needs and high-\
quality content
favoured by users, the Company will gradually expand user scale and mark\
et coverage.
II. Steadily advancing innovative business, cultivating diversified growth d\
rivers In the second half of the year, the Company will continue to regard inno\
vative business as a
key pillar for diversified growth and further consolidate the second gro\
wth curve. Centring on
two major threads – the globalisation strategy and AI capability buil\
ding, we will push ahead
with coordinated development of innovative business including niche game\
s, short dramas,
social e-commerce and AI applications. The Company will seize developmen\
t opportunities
in global social entertainment and artificial intelligence applications \
and continuously extend
its business boundaries.
The niche games business will continue to advance product development and long-term
operations focusing on the merge games casual track, and optimise product design and
commercialisation mechanisms targeting high-value markets including Euro\
pe, the United
States, Japan and South Korea. For products that have entered the profit\
recovery cycle, we
will keep enriching gameplay and content to boost user stickiness and deepen monetisation,
sustaining steady profit contributions. Meanwhile, by leveraging existing R&D and
operational experience, the Company will steadily advance new title deve\
lopment and market
validation to expand its game product pipeline.
For the short drama business, the Company will adhere to the dual-driven\
strategy of global
layout and AI empowerment to unlock the potential of “
AI + content ”
. In terms of global
layout, the Company will continuously diversify content themes tailored \
to characteristics
of different markets, strengthen capabilities in premium content product\
ion, distribution and
operation, and expand business coverage to more language groups and regi\
onal markets. On
content production, the Company will accelerate the in-depth application of AI technology in
script writing, visual production, advertising placement and other links\
, continuously boost
content output, expand the supply of high-quality content and raise effi\
ciency in content
production and commercialisation. The Company will also strengthen coope\
ration with global
content platforms to bring more premium works to international markets a\
nd gradually scale
up the short drama business and enhance its global influence.
In addition, the social e-commerce business will continue to focus on HI\
V prevention and
sexual health services. The Company will constantly refine its product a\
nd service system,
enhance professional service capabilities, actively fulfil corporate soc\
ial responsibilities and
further consolidate its industry influence.

11
III. Deepening AI technology application, driving application innovation and operational
efficiency gains
Artificial intelligence technology continues to evolve rapidly, with continuous improvements
in model capabilities, application efficiency and industrial penetration\
, bringing new shifts to
the R&D, operation and commercialisation of internet products. We believ\
e that AI can not
only lift the operational efficiency of existing businesses, but also sp\
awn new product forms
and user experiences, and even reshape people ’
s social entertainment lifestyles.
On one hand, the Company will continue to increase investment in in-house AI capabilities
and deepen AI deployment across core business workflows. Drawing on continuously
accumulated data, algorithms and operational experience, the Company wil\
l enable AI to
deliver greater value in driving business growth and improving operation\
al efficiency.
On the other hand, in the field of AI applications, we will keep focusin\
g on young global
users ’
demands for connection, interaction, creation and emotional value, and explore
integrated innovation combining AI with social entertainment. Meanwhile,\
the Company will
continuously monitor innovative technologies and outstanding teams in th\
e AI sector, identify
cooperation and investment opportunities aligned with the Company ’
s strategic priorities,
improve the layout of AI social entertainment products, and foster new g\
rowth drivers.
Looking ahead, the Company will treat AI capability building as a long-t\
erm pillar, further
consolidate its advantages in global social entertainment business, and \
deepen coordinated
development among AI technologies, multi-product portfolio and global layout. Actively
embracing the industrial transformation brought by artificial intelligen\
ce, the Company will
keep expanding its business boundaries. By connecting global users with higher-quality
products and services, it will create more positive emotional value for \
users worldwide and
pursue long-term and sustainable development.
Notes:
(1)(2)(4)(5) https://www.diandian.com
(3) https://sensortower-china.com/zh-CN
(6) https://www.researchandmarkets.com

12
MANAGEMENT DISCUSSION AND ANALYSIS
FINANCIAL REVIEW
REVENUE
Our revenue from contracts with customers increased by 37.0% for the six\
months ended 30
June 2026 amounted to USD606.9 million, as compared to USD442.8 million \
recorded for the
six months ended 30 June 2025. The following table sets forth a breakdow\
n of our revenue by
segments for the periods indicated:
Six months ended 30 June
2026 2025
% of Total % of TotalYoY
USD ’
000 revenue USD’
000 revenue Change
(unaudited) (unaudited) (unaudited)(unaudited)
(re-translated)
Social networking business 538,68488.8394,551 89.136.5%
Innovative business 68,17611.248,294 10.941.2%
Total 606,860100.0442,845 100.037.0%
The revenue from social networking business for the six months ended 30 June 2026 was
USD538.7 million, representing an increase of 36.5% from USD394.6 millio\
n for the six months
ended 30 June 2025, which was primarily attributable to (i) the Group ’
s continuous improvements
to enhance product capabilities, improve operational sophistication, and\
actively promote its global
layout and brand operation in key markets, resulting in dual breakthroug\
hs in both user scale and
revenue scale; and (ii) the Group ’
s accelerated in-depth integration of AI with its business and full-
chain empowerment, driving steady revenue growth.
The revenue from innovative business for the six months ended 30 June 2026 was USD68.2
million, representing an increase of 41.2% from USD48.3 million for the \
six months ended 30
June 2025, which was mainly attributable to the Group ’
s actively developed short drama business,
which, driven by AI, optimised the content structure and unlocked production capacity, with
continuous deepening of user consumption and platform stickiness.

13
COST OF REVENUE
Our cost of revenue for the six months ended 30 June 2026 was USD255.8 m\
illion, representing an
increase of 30.7% from USD195.7 million for the six months ended 30 June\
2025. The following
table sets forth a breakdown of our cost of revenue by nature for the pe\
riods indicated:
Six months ended 30 June
2026 2025
USD’
000 % of Total
revenue USD’
000 % of Total
revenue YoY
Change
(unaudited) (unaudited) (unaudited)(unaudited)
(re-translated)
Revenue sharing and commission fees 169,64628.0125,793 28.434.9%
Employee benefit expense 35,6305.924,962 5.642.7%
Server capacity expense 14,6292.48,305 1.976.1%
Share-based compensation expenses 10,1311.715,728 3.6-35.6%
Depreciation and amortisation 8,8661.54,358 1.0103.4%
Cost of inventories 6,9351.16,781 1.52.3%
Technical and other service fee 5,4400.96,014 1.4-9.5%
Short-term leases and lease-related expenses 1,4410.21,352 0.36.6%
Travel expense 1,2840.2842 0.252.5%
Others 1,8450.31,606 0.314.9%
Total 255,84742.2195,741 44.230.7%
The following table sets forth a breakdown of our cost of revenue by seg\
ments for the periods
indicated:
Six months ended 30 June
2026 2025
USD’
000 %USD’
000 %YoY Change
(unaudited) (unaudited) (unaudited)(unaudited)
(re-translated)
Social networking business 230,32790.0183,039 93.525.8%
Innovative business 25,52010.012,702 6.5100.9%
Total 255,847100.0195,741 100.030.7%
The cost of revenue for the social networking business for the six months ended 30 June 2026 was
USD230.3 million, representing an increase of 25.8% from USD183.0 millio\
n for the six months
ended 30 June 2025, which was mainly attributable to the increased cost \
comprising revenue
sharing and commission fees incurred by the social networking business, \
server capacity expense,
as well as the increase in employee benefit expenses.
The cost of revenue for the innovative business for the six months ended 30 June 2026 was
USD25.5 million, representing an increase of 100.9% from USD12.7 million\
for the six months
ended 30 June 2025, which was mainly due to the corresponding increase i\
n costs resulting from
the growth in revenue from the short drama business.

14
GROSS PROFIT AND GROSS PROFIT MARGIN
The following table sets forth the gross profit and gross profit margin \
for the periods indicated:
Six months ended 30 June
2026 2025
YoY
Gross Gross ProfitGross Gross ProfitChange in
Profit %margin Profit %margin gross profit
USD ’
000 USD’
000
(unaudited) (unaudited)(unaudited) (unaudited)(unaudited)(unaudited)
(re-translated)
Social networking business 308,35787.857.2% 211,512 85.653.6% 45.8%
Innovative business 42,65612.262.6% 35,592 14.473.7% 19.8%
Total 351,013100.057.8%247,104 100.055.8% 42.1%
Our gross profit for the six months ended 30 June 2026 was USD351.0 mill\
ion, representing an
increase of 42.1% from USD247.1 million for the six months ended 30 June\
2025. The gross profit
of the social networking business increased from USD211.5 million for th\
e six months ended
30 June 2025 to USD308.4 million for the six months ended 30 June 2026, \
which was mainly
attributable to the Group ’
s proactive efforts to promote global layout and the remarkable results \
from AI full-chain empowerment, which led to increases in both revenue a\
nd gross profit of our
social networking business. The gross profit from innovative business in\
creased from USD35.6
million for the six months ended 30 June 2025 to USD42.7 million for the\
six months ended 30
June 2026, which was mainly attributable to the steady growth of the Gro\
up ’
s actively developed
short drama business driven by AI.
Our gross profit margin increased from 55.8% for the six months ended 30\
June 2025 to 57.8%
for the six months ended 30 June 2026. The gross profit margin of the so\
cial networking business
increased from 53.6% for the six months ended 30 June 2025 to 57.2% for \
the six months ended
30 June 2026, which was mainly due to the extensive application of AI capabilities, which
helped to boost efficiency across all business procedures, thereby enabl\
ing high-quality business
development and a sustained improvement in operational efficiency. The g\
ross profit margin of
the innovative business decrease from 73.7% for the six months ended 30 June 2025 to 62.6% for
the six months ended 30 June 2026, which was mainly due to the increased\
costs arising from the
Group ’
s significant investments in the short drama business.
SELLING AND MARKETING EXPENSES
For the six months ended 30 June 2026, our selling and marketing expense\
s increased by 64.0%
to USD228.6 million as compared to USD139.4 million for the six months e\
nded 30 June 2025,
which was primarily attributable to intensified efforts to promote our s\
ocial networking business.
RESEARCH AND DEVELOPMENT EXPENSES
For the six months ended 30 June 2026, our research and development expe\
nses increased by
33.9% to USD31.2 million from USD23.3 million for the six months ended 3\
0 June 2025, which
was primarily attributable to the increase in employee benefit expenses.\

15
GENERAL AND ADMINISTRATIVE EXPENSES
For the six months ended 30 June 2026, our general and administrative ex\
penses increased by
21.8% to USD20.7 million as compared to USD17.0 million for the six months ended 30 June
2025, which is primarily due to the increase in employee benefit expense\
s.
OPERATING PROFIT
For the six months ended 30 June 2026, our operating profit increased by 33.4% to USD89.0
million as compared to USD66.7 million for the six months ended 30 June 2025, which was mainly
attributable to (i) an increase of USD103.9 million in our gross profi\
t; (ii) an increase of USD89.2
million in our selling and marketing expenses; (iii) an increase of US\
D7.9 million in our research
and development expenses; (iv) an increase of USD3.7 million in our ge\
neral and administrative
expenses;(v) an increase of USD10.3 million in other net loss; and (v\
i) an increase of USD29.9
million in gain on disposal of subsidiaries.
FINANCE INCOME, NET
For the six months ended 30 June 2026, we recorded a net finance income of USD5.4 million as
compared to a net finance income of USD3.7 million for the six months en\
ded 30 June 2025. Such
change was mainly attributable to the increase in interest income from o\
ur bank deposits.
INCOME TAX EXPENSES/(CREDITS)
For the six months ended 30 June 2026, we recorded income tax expenses o\
f USD0.3 million as
compared to the income tax credits of USD0.1 million for the six months \
ended 30 June 2025.
PROFIT FOR THE PERIOD
As a result of the foregoing, our profit for the period increased by 41.\
2% to USD99.7 million for
the six months ended 30 June 2026 as compared to USD70.6 million for the\
six months ended 30
June 2025.
NON-IFRS MEASURES
To supplement our consolidated statement of comprehensive income, which is presented in
accordance with IFRS, we also use adjusted EBITDA and profit attributabl\
e to equity shareholders
of the Company adjusted as an additional financial measure, which is not required by, or
presented in accordance with IFRS. We believe that these non-IFRS measur\
es help our investors
in identifying underlying trends in our business and provide our investo\
rs useful information in
understanding and evaluating our results of operation by eliminating pot\
ential impacts of items
that our management does not consider to be indicative of our operating performance, which is the
same approach that our management takes when comparing our financial res\
ults across accounting
periods. We also believe that these non-IFRS measures provide useful information about our
operating results, enhance the overall understanding of our past perform\
ance and future prospects
and allow for greater visibility with respect to key metrics used by our\
management in its financial
and operational decision-making.

16
We define adjusted EBITDA as operating profit adjusted by share-based co\
mpensation expenses,
depreciation and amortization. We define profit attributable to equity shareholders of the Company
adjusted as profit attributable to equity shareholders adjusted by share-based compensation
expenses and gain on revaluation of equity method investee, which was attributed to equity
shareholders of the Company. When assessing our operating and financial \
performance, you should
not consider adjusted EBITDA and profit attributable to equity shareholders of the Company
adjusted in isolation from or as a substitute for our financial performa\
nce or financial position as
reported in accordance with IFRS. The terms adjusted EBITDA and profit a\
ttributable to equity
shareholders of the Company adjusted are not defined under IFRS, and suc\
h terms may not be
comparable to other similarly titled measures used by other companies.
The following tables set forth the reconciliation of our non-IFRS financ\
ial measure for the periods
indicated, to the nearest measures prepared in accordance with IFRS:
Six months ended 30 June2026 2025
USD’
000 USD’
000
(unaudited) (unaudited)
(re-translated)
Operating profit 88,96566,732
Add:
Share-based compensation expenses (1)(2) 11,606 (2) 17,116 (1)
Depreciation and amortization 10,5436,039
Adjusted EBITDA 111,11489,887
Adjusted EBITDA growth 23.6%42.4%
Six months ended 30 June 2026 2025
USD’
000 USD’
000
(unaudited) (unaudited)
(re-translated)
Profit attributable to equity shareholders of the Company 99,32868,110
Add:
Share-based compensation expenses, which was attributed to
equity shareholders of the Company 11,49417,001
Lessj
Gain on revaluation of equity method investee 9,805–
Profit attributable to equity shareholders
of the Company adjusted 101,01785,111
Growth rate of adjusted profit attributable to
equity shareholders of the Company 18.7%141.8%

17
Notes:
(1) In March 2023, March 2024, May 2024, March 2025 and May 2025, the Board \
approved the respective grants of an aggregate of 2,441,170 RSUs, 4,778,877 RSUs, 659,668 RSUs, 30,316,\
184 RSUs and 897,415 RSUs to
certain employees and management pursuant to the RSU Schemes. In Decembe\
r 2024, the Board approved the
grant of RSUs to certain employees and management, including 22,215,102 \
RSUs as the modification of a share
incentive plan adopted by a subsidiary of the Company. Share-based compe\
nsation expenses were recognised
based on the respective vesting periods of the grants under the RSU Sche\
mes, and amounted to approximately
USD16,461,000 for the six months ended 30 June 2025, tantamount to the e\
conomic benefits which certain
employees and management obtained from the Company. For further details,\
please refer to the announcements
dated 24 March 2023, 22 March 2024, 21 May 2024, 20 March 2025 and 21 Ma\
y 2025 of the Company.
On 30 August 2021, the Board granted in aggregate 80,000,000 Share Optio\
ns to 32 eligible persons. The grant
comprises performance-based Share Options, which are generally vested within 10 years. Share Options of each
grantee are to be vested in four tranches subject to the fulfilment of c\
ertain performance targets that are tied to
the Company ’
s ability to deliver on certain key indicators. With respect to the fore\
going grant, the performance
targets and whether and to what extent achieved were determined by the Board. For the aforementioned
grants, evaluations were made on 30 June 2025 to assess the likelihood of the performance targets being met.
Share-based compensation expenses amounting to approximately USD655,000 were recognised for the six
months ended 30 June 2025.
(2) In March 2023, March 2024, May 2024, March 2025, May 2025, March 2026 an\
d June 2026, the Board approved the respective grants of an aggregate of 2,441,170 RSUs, 4,778,\
877 RSUs, 659,668 RSUs, 30,316,184
RSUs, 897,415 RSUs, 12,747,486 RSUs and 2,181,919 RSUs to certain employ\
ees and management pursuant
to the RSU Schemes. In December 2024, the Board approved the grant of RS\
Us to certain employees and
management, including 22,215,102 RSUs as the modification of a share inc\
entive plan adopted by a subsidiary
of the Company. Share-based compensation expenses were recognised based \
on the respective vesting periods
of the grants under the RSU Schemes, and amounted to approximately USD11\
,606,000 for the six months ended
30 June 2026, tantamount to the economic benefits which certain employee\
s and management obtained from the
Company. For further details, please refer to the announcements dated 24\
March 2023, 22 March 2024, 21 May
2024, 20 March 2025, 21 May 2025, 26 March 2026 and 30 June 2026 of the \
Company.
TREASURY POLICY
We had adopted a prudent financial management approach for our treasury \
policy. The Board
closely monitors our Group ’
s liquidity position to ensure that the liquidity structure of our assets
and liabilities can meet our funding needs all the time.
CAPITAL STRUCTURE
We continued to maintain a healthy and sound financial position. Our tot\
al assets increased from
USD625.2 million as at 31 December 2025 to USD729.5 million as at 30 Jun\
e 2026, while our
total liabilities decreased from USD257.8 million as at 31 December 2025\
to USD250.7 million as
at 30 June 2026. Liabilities-to-assets ratio decreased from 41.2% as at \
31 December 2025 to 34.4%
as at 30 June 2026.

18
FINANCIAL RESOURCES AND OPERATING CASH FLOW
We funded our cash requirement principally from capital contribution fro\
m Shareholders and cash
generated from our operations.
As at 30 June 2026, our cash and cash equivalents were USD409.4 million, as compared to
USD363.9 million as at 31 December 2025.
Compared to USD73.5 million recorded for the six months ended 30 June 20\
25, the cash generated
from operations for the six months ended 30 June 2026 increased to USD89\
.3 million.
We believe that our existing cash and cash equivalents and anticipated c\
ash flow from operations
are sufficient to fund our operating activities, capital expenditures an\
d other obligations for at least
the next 12 months.
FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS
To preserve funds for future capital expenditure and new business opport\
unities, we continue to
invest surplus cash in commercial bank wealth management products and fu\
nds issued by major
and reputable financial institutions, which generate relatively low risk income for us. We recognise
such investments as financial assets measured at fair value through profit or loss of current
portion and manage such investments in accordance with our internal poli\
cies as disclosed in the
Prospectus. As at 30 June 2026, the fair value of such investments incre\
ased to USD39.4 million,
compared to USD23.7 million as at 31 December 2025. Such increase was pr\
imarily attributable to
the increase in purchase of wealth management products.
CAPITAL EXPENDITURE
For the six months ended 30 June 2026, our capital expenditure primarily\
consisted of expenditures
on property and equipment as well as intangible assets, including purcha\
ses of computers, other
office equipment, etc. The capital expenditures for the six months ended 30 June 2026 were
USD3.0 million, representing an increase of USD2.3 million from USD0.7 million for the six
months ended 30 June 2025.
SIGNIFICANT INVESTMENT
The Group did not hold any significant investments as at 30 June 2026.
MATERIAL ACQUISITION AND DISPOSAL OF SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURES
We did not have any other material investment, acquisition or disposal of subsidiaries, associates
and joint ventures during the six months ended 30 June 2026.
PLEDGE OF ASSETS
As at 30 June 2026, we did not pledge any of our assets.
FUTURE PLANS FOR MATERIAL INVESTMENTS AND CAPITAL ASSETS
We intend to pursue strategic investment or acquire businesses with an e\
xpectation to creating
synergies with our own business. We aim to target companies that have co\
mpetitive strengths in
technology, data and other areas or participants in the upstream and downstream industries. We
also intend to use the cash generated from our operating activities to f\
und such in