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Newborn Town (SEHK:9911) Lifts Revenue Guidance Following Social Growth But Is The Valuation Too Cheap

Simply Wall St · 2d ago

Why Newborn Town’s Updated Revenue Guidance Matters Now

Newborn Town (SEHK:9911) issued new revenue guidance for the six months to 30 June 2026, flagging expected group revenue of about US$595 million to US$615 million, an increase of roughly 34.3% to 38.8% year on year.

The company linked this expected range to combined contributions from its social networking business and its other newer business lines, which keeps attention on how these segments shape the stock’s appeal for investors.

See our latest analysis for Newborn Town.

The revenue guidance landed alongside a modest pick up in the share price, with a 1-day share price return of 2.88% and a 7-day gain of 1.51%, although the stock remains down 29.36% year to date and the 1-year total shareholder return is down 16.98% after a very large 3-year total shareholder return.

If this kind of guidance shift has your attention, it could be a good moment to see what else is moving by scanning 105 top founder-led companies

Newborn Town is guiding to strong revenue for the half year, yet the share price is still down sharply over 2026. Is this a solid social networking business that the market is mispricing, or fairly valued already?

Price-to-Earnings of 10.9x for Newborn Town: Is It Justified?

Newborn Town is trading on a P/E of 10.9x, which sits well below both its peers and the wider Asian Interactive Media and Services industry. That gap stands out given the company’s recent profit growth and its current share price of HK$8.39.

The P/E multiple compares what investors are paying for each unit of current earnings. For a business like Newborn Town, which operates social networking platforms and related digital services, earnings based metrics are a common way for investors to compare it with similar companies in the same sector.

Newborn Town is flagged as good value on several fronts. Its P/E of 10.9x is below the peer average of 20.1x and also below the Asian Interactive Media and Services industry average of 20.5x. The Simply Wall St fair P/E ratio is indicated at 12.7x, so current pricing sits under both the peer group and the level the market could potentially move toward if sentiment and earnings expectations line up more closely with those benchmarks.

Explore the SWS fair ratio for Newborn Town

Result: Price-to-Earnings of 10.9x (UNDERVALUED)

However, Newborn Town still carries risks. The share price is down sharply over 2026, and the business depends heavily on its social networking segment.

Find out about the key risks to this Newborn Town narrative.

Another View On Newborn Town’s Valuation

The P/E discussion suggests Newborn Town looks cheap. The SWS DCF model paints a stronger picture again. It estimates fair value at HK$31.46 per share versus the current HK$8.39, which points to a wide gap investors need to judge as either an opportunity or a warning.

Look into how the SWS DCF model arrives at its fair value.

9911 Discounted Cash Flow as at Aug 2026
9911 Discounted Cash Flow as at Aug 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Newborn Town for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 254 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

If this combination of upbeat guidance and a weak year-to-date share price has you curious, it helps to review the numbers yourself and act promptly. To understand what investors are currently optimistic about, check the 5 key rewards.

Looking for more investment ideas beyond Newborn Town?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.