<div id="readability-page-1"><div><p>Newborn Town (SEHK:9911) has drawn renewed attention to its stock after reporting its 2025 annual results and unveiling a new share repurchase program of up to HK$300 million, funded from internal resources.</p> <p>See our latest analysis for Newborn Town.</p> <p>Newborn Town’s share price has softened in recent months, with a 30 day share price return of 14.24% and a year to date share price return decline of 31.51%. At the same time, the 3 year total shareholder return of about 7x and 1 year total shareholder return of 36.41% point to strong longer term gains, suggesting that recent weakness contrasts with earlier momentum.</p> <p>If you are weighing what comes next after Newborn Town’s buyback and earnings, it could be a good moment to widen your watchlist with 96 top founder-led companies</p> <p>With earnings up, a fresh HK$300 million buyback in place and the share price still well below some analyst targets, is Newborn Town’s current valuation a potential entry point, or is the market already pricing in its future growth?</p> <h2>Price to Earnings of 10.3x: Is it justified?</h2> <p>On a P/E of 10.3x, Newborn Town’s HK$8.13 share price sits well below both peer and sector averages, which points to a valuation the market is not fully aligning with comparables.</p> <p>The P/E ratio tells you how much investors are currently paying for each dollar of earnings, which matters a lot for a company with positive net income of CN¥934.53m and high quality earnings. For a business rooted in social networking platforms such as MICO, YoHo and niche LGBTQ+ apps, this multiple gives a quick read on how current earnings are being valued against other interactive media and services names.</p> <p>Analysts expect earnings to grow 20.2% per year, with revenue forecast to rise 11.7% per year. The company currently reports a high Return on Equity of 37.4% and higher profit margins than last year. In that context, a 10.3x P/E compared with a fair P/E of 14.2x suggests the market is pricing in a much lower level than that fair ratio, assuming earnings and returns remain aligned with current forecasts.</p> <p>Compared with the Asian Interactive Media and Services industry average P/E of 19.5x and a peer average of 23.6x, Newborn Town’s 10.3x stands at a substantial discount when lined up against both its sector and the fair ratio level of 14.2x that the market could gravitate toward over time.</p> <p>Explore the SWS fair ratio for Newborn Town</p> <p><strong>Result: Preferred multiple of Price-to-Earnings of 10.3x (UNDERVALUED)</strong></p> <p>However, recent share price declines and any shift in user engagement across platforms like MICO or YoHo could quickly challenge the current valuation case.</p> <p>Find out about the key risks to this Newborn Town narrative.</p> <h2>Another View: What Does DCF Say?</h2> <p>While the 10.3x P/E suggests Newborn Town looks cheap against peers and the fair ratio of 14.2x, the SWS DCF model presents an even stronger perspective. It shows an estimated future cash flow value of HK$30.32 per share compared with the current HK$8.13. That gap appears large, but how comfortable are you with the assumptions behind it?</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/fcd5c300-fa92-45a8-85b8-008e7212a467/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTI5?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/fcd5c300-fa92-45a8-85b8-008e7212a467/chart/dcf/query-ZGF0ZT0yMDI2LTAzLTI5"/><figcaption>9911 Discounted Cash Flow as at Mar 2026</figcaption></figure><p>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 236 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2>Next Steps</h2> <p>With mixed signals across valuation and fundamentals, it can be useful to look under the hood yourself, weigh both the concerns and the potential, and review the 5 key rewards and 1 important warning sign</p> <h2>Ready for more investment ideas?</h2> <p>If Newborn Town is on your radar, do not stop there. Broader ideas can sharpen your watchlist and help you spot opportunities others overlook.</p> <ul> <li>Target resilient income by reviewing companies in the 483 dividend fortresses and see which payouts line up with your goals.</li> <li>Hunt for quality at a discount using the screener containing 599 high quality undiscovered gems before these names attract wider attention.</li> <li>Prioritise capital preservation by checking out the 265 resilient stocks with low risk scores so potential ideas do not slip past you.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>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.</strong> 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.</em></p><div><h3>Valuation is complex, but we're here to simplify it.</h3><p>Discover if Newborn Town might be undervalued or overvalued with our detailed analysis, featuring <strong>fair value estimates, potential risks, dividends, insider trades, and its financial condition.</strong></p><p>Access Free Analysis</p></div></div></div>

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<p>Newborn Town (SEHK:9911) has reported strong 2025 results and announced a HK$300 million share buyback. Despite a recent share price decline of 31.51% year-to-date, the company shows a high Return on Equity of 37.4% and positive earnings growth expectations of 20.2% annually. With a P/E ratio of 10.3x, significantly below industry averages, analysts suggest the stock may be undervalued. A DCF model estimates a fair value of HK$30.32 per share, indicating potential upside. Investors are advised to consider both risks and opportunities in their evaluation.</p>

Newborn Town (SEHK:9911) Valuation Check After Strong 2025 Results And New HK$300 Million Buyback