Investment Rating - The report maintains a "Buy" rating for Meitu Inc. (1357.HK) with a target price of HKD 4.42, while the current price is HKD 2.78 [3]. Core Insights - Meitu has launched six new AI-driven products at its third imaging festival, focusing on various applications in commercial photography, video production, e-commerce design, and more. The company is recognized for its deep investment in AI technology and has achieved significant user growth, with VIP membership reaching a record high of 10.63 million, a 49% year-over-year increase [2]. - The report highlights that 87% of paid users utilize AI features across Meitu's product suite, with 41% using generative AI. The company's gross profit margin reached 61% in 2023, with an adjusted net profit of RMB 370 million, reflecting a 233% year-over-year growth [2]. Summary by Sections Revenue Performance - Meitu's revenue for 2022 was RMB 2,085 million, with a growth rate of 25.2%. The projected revenue for 2024 is RMB 3,688 million, representing a growth rate of 36.8% [8]. - The adjusted net profit for 2023 is projected at RMB 368 million, with a significant increase of 233.2% compared to the previous year [8]. Product Launches - The six new products include: 1. Meitu Cloud Repair V2: AI batch color correction and enhancement with a 10x speed increase. 2. Kaipai V2: A complete AI workflow for self-media. 3. Meitu Design Studio V3: Features for efficient e-commerce design. 4. Zcool Design Service: Efficient matching and communication for designers. 5. QIMI: An AI platform for game advertising. 6. MOKI: A comprehensive AI short film creation tool, expected to launch on July 31 [2][7]. Financial Forecast - The adjusted net profit forecast for 2024 is revised to RMB 550 million, a 7% decrease from the previous estimate, while maintaining projections of RMB 800 million and RMB 980 million for 2025 and 2026, respectively [2][8].

Investment Rating - The report initiates coverage with a "Buy" rating for Meitu Inc. (01357.HK) [1][8]. Core Insights - The report highlights that Meitu has undergone significant transformation driven by AI, shifting its revenue model from advertising to subscription services, which now account for over half of its revenue. The company is well-positioned to leverage trends in the imaging and design industry, focusing on subscription-based models, lightweight applications, and AIGC (AI-Generated Content) [1][6][19]. Summary by Sections Company Overview - Meitu was established in 2008 and has developed a range of design products, with a strong focus on AI integration. The company has transitioned from hardware to software, emphasizing subscription and SaaS services as its primary revenue sources [12][19]. Industry Trends - The report identifies three key trends in the imaging and design industry: subscription models, lightweight applications, and AIGC. These trends are reshaping the market, with companies like Adobe demonstrating the potential of subscription services to enhance revenue and profitability [26][27][30]. Financial Performance - Meitu's revenue has shown consistent double-digit growth since 2021, with a significant shift towards subscription and SaaS services. The company achieved a revenue of 1.33 billion RMB in 2023, representing a year-on-year growth of 53%. The adjusted net profit for 2023 was 368 million RMB, with a net profit margin of 13.7% [2][19][22]. Revenue and Profit Forecast - The report forecasts Meitu's revenue for 2024, 2025, and 2026 to be 3.61 billion RMB, 4.54 billion RMB, and 5.26 billion RMB, respectively, with year-on-year growth rates of 34%, 26%, and 16%. The adjusted net profit is expected to reach 570 million RMB, 770 million RMB, and 1 billion RMB for the same years, with growth rates of 54%, 36%, and 30% [2][8][19]. Global Expansion - Meitu has initiated a global expansion strategy, with 30% of its subscription users coming from overseas markets, contributing to 50% of its revenue. The company aims to capitalize on the growing demand in emerging markets driven by smartphone penetration and social media [1][19].

Investment Rating - The report initiates coverage with a "Buy" rating for Meitu Inc. (01357.HK) [1][8] Core Views - The company has undergone significant transformation driven by the AI wave, shifting its revenue structure towards subscription-based models, which now account for over half of its income, surpassing advertising as the primary revenue source [1][19] - The report highlights three key trends in the imaging digitalization industry: subscription models, lightweight tools, and AIGC (AI-Generated Content), which are expected to drive growth for Meitu [1][26] - The company is well-positioned in both lifestyle and productivity scenarios, with a strong user base and significant growth in subscription revenue, particularly in its productivity tools [1][19] Summary by Sections Company Overview - Meitu was established in 2008 and has developed a range of design products, focusing on AI applications in imaging and beauty solutions [12] - The company has transitioned from hardware to software, with a significant focus on AI-driven tools and services [13] Industry Trends - The report identifies the shift to subscription models as a major trend, with companies like Adobe leading the way in SaaS transformations, which have resulted in increased revenue and profitability [27][28] - Lightweight collaborative SaaS tools like Canva and Figma are lowering barriers for design product usage, indicating a growing demand for accessible design solutions [30][31] Financial Performance - Revenue is projected to grow significantly, with estimates of CNY 3.61 billion, CNY 4.54 billion, and CNY 5.26 billion for 2024, 2025, and 2026 respectively, reflecting year-on-year growth rates of 34%, 26%, and 16% [2][8] - Adjusted net profit is expected to reach CNY 570 million, CNY 770 million, and CNY 1 billion over the same period, with growth rates of 54%, 36%, and 30% [2][8] - The company has shown a consistent improvement in profit margins, with a gross margin of 61.4% in 2023, and a stable decline in expense ratios, indicating operational efficiency [19][22] Global Expansion - Meitu has initiated a global strategy, with 30% of its subscription users coming from overseas markets, contributing to 50% of its revenue, highlighting the potential for further growth in international markets [1][19]

Financial Performance - Adjusted net profit attributable to parent company equity holders reached approximately RMB 370 million, a year-on-year increase of 233.2%[8] - Revenue increased by 29.3% year-on-year to approximately RMB 2.7 billion[8] - Gross profit increased by 39.5% year-on-year to RMB 1.66 billion, with a gross margin of 61.4%[10] - Adjusted net profit attributable to parent company equity holders reached RMB 368.3 million, a year-on-year increase of 233.2%[17] - Total revenue for 2023 was RMB 2,695.7 million, up 29.3% year-on-year[17] - Gross profit rose to RMB 1,655.9 million in 2023 from RMB 1,187.3 million in 2022[24] - Net profit attributable to equity holders of the parent company surged to RMB 378.3 million in 2023 from RMB 94.1 million in 2022[24] - Revenue from imaging and design products grew by 52.8% to RMB 1,327.4 million in 2023, accounting for 49.2% of total revenue[27][28] - Advertising revenue increased to RMB 758.8 million in 2023, representing 28.2% of total revenue[27] - Beauty solutions revenue grew to RMB 569.2 million in 2023, maintaining a 21.1% share of total revenue[27] - Revenue from beauty solutions increased by 29.1% to RMB 569.2 million in 2023, driven by growth in cosmetics supply chain management services[31] - Advertising revenue grew by 20.5% to RMB 758.8 million in 2023, with expectations of steady growth due to a shift towards subscription models[34] - Gross profit increased by 39.5% to RMB 1,655.9 million in 2023, with gross margin rising from 56.9% to 61.4% due to higher-margin businesses[37] - Net profit surged to RMB 366.4 million in 2023, up from RMB 18.9 million in 2022, driven by strong performance in AI-driven imaging and design products[48] - Adjusted net profit attributable to equity holders of the parent company rose to RMB 368.3 million in 2023, compared to RMB 110.5 million in 2022, due to growth in AI-driven imaging and design products[49] - Meitu Network and its subsidiaries' cumulative profit reached RMB 658.0 million as of December 31, 2023[186] - Meitu Network and its subsidiaries' revenue for 2023 was RMB 1,855.9 million, a 36% increase from RMB 1,364.4 million in 2022[190] - Meitu Network and its subsidiaries' total assets as of December 31, 2023, were RMB 3,244.4 million, up 25.4% from RMB 2,587.1 million in 2022[190] - Meitu Network and its subsidiaries' revenue accounted for 68.8% of the group's annual revenue in 2023, compared to 65.4% in 2022[190] - Meitu Network and its subsidiaries' total assets represented 56.3% of the group's total assets as of December 31, 2023, up from 51.7% in 2022[190] User Metrics - Monthly active users (MAU) reached approximately 250 million, a year-on-year increase of 2.6%[8] - Paid subscription users reached 9.11 million, a year-on-year increase of 62.3%[8] - Monthly active users in productivity applications increased by 74.3% year-on-year to 17.66 million[14] - Monthly active users in Mainland China increased by 5.1% year-on-year to 171.47 million[14] - Paid subscription users reached over 9.11 million with a penetration rate of 3.7%, up 62.3% from 2022[28] AI and Technology - Over 83% of content processed by users daily is based on AI functionalities[17] - Meitu launched its self-developed generative AI model "MiracleVision" in June 2023, supporting text-to-image, image-to-image, and image-to-video functionalities[17] - Meitu made minority investments in AI chip companies, multimodal large model companies, and AI-native marketing technology companies to enhance future AI capabilities[18] - The AI product "AI Product Image" generated over 130 million images by February 2024[28] - R&D expenses increased by 8.4% to RMB 635.5 million in 2023, primarily due to higher investments in AI-related technologies[38] Revenue Breakdown - Revenue from imaging and design products increased by 52.8% year-on-year to RMB 1.33 billion[10] - Revenue from beauty solutions increased by 29.1% year-on-year to RMB 569 million[10] - Revenue from advertising increased by 20.5% year-on-year to RMB 759 million[10] - Revenue from the cross-platform application Meitu Design Studio exceeded RMB 100 million, a year-on-year increase of 229.8%[18] - Revenue from image and design products outside mainland China accounted for over 50% of the total revenue line in 2023[19] Acquisitions and Investments - Meitu acquired Zcool Network Technology Limited, which has over 17 million registered users and operates the largest copyright image and video trading platform in mainland China[19] - The company acquired Zcool in February 2024 to enhance its imaging and design ecosystem[28] - Meitu completed the acquisition of Ruichengtianhe, making it a wholly-owned subsidiary after purchasing the remaining 19.81% equity for a total cash consideration[70] - Meitu sold approximately 20% of its equity in Dajie Net for USD 1.00, reducing its stake from 58.98% to 38.98% and ceasing control over Dajie Net[71] - Meitu participated in a USD 22 million equity financing for Pixocial Holdings, subscribing to 2,691,066 Series A preferred shares for USD 3,000,000[74] - Pixocial Holdings' equity decreased from 100% to approximately 80.62% after the Pixocial closing on December 1, 2023[75] - Pixocial Holdings adopted a stock option plan reserving 7,642,626 ordinary shares for employees, directors, and consultants[75] - Stock options corresponding to 1,910,657 ordinary shares of Pixocial Holdings were granted to Mr. Wu and Mr. Song[75] - The Pixocial equity financing and related transactions constitute a deemed sale under Listing Rule 14.29[75] - The Pixocial stock option plan and related grants constitute deemed sales and connected transactions under Listing Rules[76] - No significant acquisitions or disposals of subsidiaries, associates, or joint ventures were made in the year ending December 31, 2023[76] - No other significant events affecting the company occurred after December 31, 2023, up to the latest practicable date[76] Expenses and Costs - Sales and marketing expenses rose by 6.2% to RMB 428.2 million in 2023, driven by overseas expansion in the image subscription business[39] - Administrative expenses increased by 10.7% to RMB 300.9 million in 2023, mainly due to higher employee costs and professional service fees[40] - The company recognized a reversal of impairment loss on cryptocurrencies of approximately RMB 270 million in 2023, due to higher market prices[41] - Goodwill impairment loss of RMB 155.3 million was recorded in 2023 for cash-generating units related to beauty solutions[42] - Other income decreased to RMB 68.6 million in 2023, primarily due to reduced government subsidies and VAT refunds[44] - Other net loss was RMB 41.1 million in 2023, compared to a net gain of RMB 543.0 million in 2022, due to various factors including a decrease in fair value of long-term investments[45] - Net financing income increased by 197.3% to RMB 44.4 million in 2023, driven by higher bank interest income[46] - Income tax expenses decreased by 54.1% to RMB 71.7 million in 2023, primarily due to reduced fair value changes in long-term investments[47] Cash and Financial Position - Cash and cash equivalents stood at RMB 640.6 million as of December 31, 2023, with total cash and liquid financial resources at RMB 1,404.4 million[53] - Capital expenditures totaled RMB 52.0 million in 2023, including RMB 47.4 million for property and equipment purchases[55] - Investments in financial assets measured at fair value through profit or loss increased to RMB 328.1 million in 2023, up from RMB 84.3 million in 2022[57] - The company did not hedge any foreign currency fluctuations for the years ended December 31, 2023, and 2022[58] - The company pledged restricted deposits of RMB 300,000 for certain operating expenses as of December 31, 2023[59] - The company proposed a final dividend of HKD 0.036 per share for the year ended December 31, 2023, totaling approximately HKD 161.2 million[60] - The company's asset-liability ratio was 0.36% as of December 31, 2023, with bank borrowings of RMB 14.98 million at an annualized interest rate of 3.77%[62] - The company had 1,968 full-time employees as of December 31, 2023, compared to 2,057 in the previous year[63] - The company entered into a guarantee agreement on January 5, 2024, covering data promotion and service fees for certain subsidiaries[65] - Meitu holds approximately 23.81% equity in Hugjia Technology with a registered capital of RMB 1.4 million, recorded as a financial asset at fair value through profit or loss[67] - The fair value of Meitu's equity in Hugjia Technology was revalued at approximately RMB 698.1 million, accounting for about 12.10% of the company's total assets[67] - Meitu recorded an unrealized loss of approximately RMB 35.3 million on its equity in Hugjia Technology due to dilution effects from employee incentive shares[67] Shareholder and Equity Information - The company's net proceeds from the IPO amounted to HKD 4,988 million, fully utilized as per the prospectus[97] - The proposed final dividend for the year ended December 31, 2023, is HKD 0.036 per share, totaling approximately HKD 163.3 million[99] - The dividend payout ratio for the year ended December 31, 2023, is approximately 40.2% based on adjusted net profit attributable to equity holders[99] - The company has 4,534,776,084 issued shares as of the latest practicable date[101] - The share premium account balance after the final dividend payment will be approximately RMB 6,945.7 million (equivalent to HKD 7,657.0 million)[101] - The distributable reserves as of December 31, 2023, are USD 670,572,000 (equivalent to RMB 4,749,461,000)[103] - The company's subsidiary Pixocial Holdings issued a total of 19,734,483 Series A preferred shares, representing 7.04%, 3.52%, 2.82%, and 2.11% of the total issued and outstanding shares, for a total consideration of $22,000,000[106] - The company made charitable donations of approximately RMB 330,000 in 2023, compared to RMB 1,257,254 in 2022[105] - The company's CEO received a discretionary bonus totaling RMB 1,480,000 for the year ended December 31, 2023[109] - Under the Pre-IPO Employee Share Option Scheme, 12,870,000 shares were granted to eligible participants, with 12,755,144 shares remaining unexercised as of the latest practicable date[112] - The Pre-IPO Employee Share Option Scheme, which was effective from February 15, 2014, to February 15, 2024, allowed any unexercised options to remain valid after the expiration date[113] - The exercise price for the pre-IPO employee stock option plan is set at $0.03 per share[117] - A total of 17,843,520 stock options were granted under the pre-IPO employee stock option plan[117] - As of December 31, 2023, 12,870,000 stock options remained unexercised under the pre-IPO employee stock option plan[117] - The post-IPO stock option plan allows for the issuance of up to 422,729,455 shares, representing 9.32% of the company's issued share capital[121] - The post-IPO stock option plan will remain effective until December 15, 2026[123] - The maximum number of shares that can be issued to any eligible participant under the post-IPO stock option plan is 1% of the issued shares[124] - The exercise price for the post-IPO stock option plan cannot be lower than the highest of the closing price on the offer date, the average closing price of the five preceding business days, or the face value of the shares[126] - The post-IPO share award plan aims to align the interests of eligible participants with the company's long-term growth and profitability[127] - The maximum number of shares to be granted under the post-IPO share incentive plan is 211,364,727 shares, not exceeding 5% of the company's total issued share capital[130] - As of December 31, 2023, 147,489,337 shares were granted or agreed to be granted under the post-IPO share incentive plan[132] - The total number of shares available for grant under the post-IPO share incentive plan decreased from 90,337,128 shares (2.02% of issued share capital) on January 1, 2023, to 63,875,390 shares (1.41% of issued share capital) on December 31, 2023[132] - The issued share capital could increase from 4,477,678,830 shares to 4,612,009,194 shares if the annual limit of 3% of total issued shares is fully utilized and no options are exercised under pre-IPO or post-IPO option plans[132] - The post-IPO share incentive plan has a remaining term of approximately two years[133] - The company granted 2,550,000 reward shares to director Wu Zeyuan on April 1, 2023, with a vesting period from May 1, 2023, to April 1, 2024[134] - Employees (excluding directors and key executives) were granted 1,229,542 reward shares on October 1, 2023, with a vesting period starting October 1, 2024[134] - A total of 13,149,830 reward shares were granted to employees on April 1, 2023, with a vesting period from April 1, 2023, to April 1, 2024[134] - The company granted 5,100,000 reward shares to employees on April 1, 2023, with a vesting period from April 1, 2024, to April 1, 2025[134] - As of December 31, 2023, 11,355,495 reward shares granted to employees on April 1, 2023, remained unvested[134] - The company granted 471,601 reward shares to consultants on April 1, 2023, with a vesting period from April 1, 2024, to April 1, 2025[134] - The fair value per reward share granted to employees on October 1, 2023, was HKD 3.51[134] - The closing price per share before the grant date for employees on October 1, 2023, was HKD 3.50[134] - The company granted 24,326 reward shares to consultants on April 1, 2023, which were fully vested on the same date[134] - The closing price per share before the grant date for consultants on April 1, 2023, was HKD 2.63[134] - The total number of shares that may be issued under the pre-IPO employee share option plan and post-IPO share award plan for the year ended December 31, 2023, is 40,867,545 shares, representing approximately 0.91% of the total issued shares as of December 31, 2023[137] - EveLab Insight has reserved 20% of its shares for the share award plan, aimed at incentivizing and retaining contributors to the smart hardware business[138] - The maximum number of EveLab Insight shares that can be awarded under the share award plan without further approval is 100,000,000 shares, representing 20% of the total issued shares[144] - As of December 31, 2023, and the latest practicable date, 67,500,000 and 65,000,000 EveLab Insight shares have been awarded or agreed to be awarded, representing approximately 13.5% and 13.0% of the issued share capital of EveLab Insight Cayman, respectively[145] - The EveLab Insight share award plan has a remaining term of approximately seven years[149] - Pixocial Holdings adopted the Pixocial Share Option Plan, reserving 7,642,626 ordinary shares for issuance to eligible employees, directors, and consultants[150] - The total number of share options granted or agreed to be granted under the Pixocial Share Option Plan was 7,082,731 as of December 31, 2023[153] - The remaining share options available for grant under the Pixocial Share Option Plan were 559,895 as of December 31, 2023[153] - The Pixocial Share Option Plan aims to align the interests of eligible participants with those of Pixocial Holdings and its subsidiaries through share ownership, dividends, and share value appreciation[151] - The Pixocial Share Option Plan has a maximum term of ten years from the adoption date, with approximately nine years remaining[156] - The Pixocial Share Option Plan does not impose a specific limit on the maximum number of share options that can be granted to a single eligible participant[156] - Wu Zeyuan holds 574,496,670 ordinary shares, representing 12.83% of the total issued shares[169] - Cai Wensheng holds

Group 1 - Bitcoin-related stocks collectively declined, with Meitu Inc. down 4.95% to HKD 2.88, OK Group down 3.7% to HKD 0.26, OSL Group down 3.13% to HKD 9.3, and Blueport Interactive down 1.54% to HKD 0.64 [1] - Bitcoin price fell to USD 59,900, marking the lowest level since March, while Ethereum dropped below USD 3,000 with a 24-hour decline of 2.5% [1] - Bitcoin has decreased over 15% from its latest historical high, while some altcoins have retreated by 40%-50% from recent peaks [1] Group 2 - The next Bitcoin halving is expected around April 20, which may lead to increased selling pressure as the date approaches, although it is anticipated to support the price of Bitcoin in the long term [1] - Analysts from JPMorgan and Deutsche Bank believe that the positive effects of the upcoming halving event have already been largely reflected in Bitcoin's price [1]

Investment Rating - The investment rating for the company is "Outperform the Market" [2][8] Core Insights - The company is positioned as an AI company, achieving significant revenue and profit growth in 2023, with total revenue of HKD 2.696 billion (up 29.3% year-on-year) and a net profit of HKD 368 million (up 233.2% year-on-year) [5][8] - The company's imaging and design products are the largest revenue and profit contributors, with revenue of HKD 1.327 billion (up 52.8% year-on-year), accounting for 49.2% of total revenue [5][9] - The company has a clear and proactive globalization strategy, with over 30% of users and paid subscribers coming from regions outside mainland China, contributing to over 50% of imaging revenue [5][6] Financial Performance - The company reported a gross margin of 61.4% in 2023, an increase of 4.5 percentage points year-on-year [5][7] - The company expects revenue growth to continue, with projected revenues of HKD 3.565 billion, HKD 4.556 billion, and HKD 5.578 billion for 2024, 2025, and 2026, respectively, representing year-on-year growth rates of 32.2%, 27.8%, and 22.4% [8][9] - The net profit is projected to reach HKD 597 million, HKD 861 million, and HKD 1.123 billion for the same years, with year-on-year growth rates of 57.9%, 44.1%, and 30.5% [8][11] Business Segments - The imaging and design products segment is expected to maintain strong growth, with revenue projected to reach HKD 1.984 billion in 2024, up 49.5% year-on-year [9] - The beauty industry solutions segment is also expected to grow, with projected revenue of HKD 739.91 million in 2024, reflecting a growth rate of 30% [9] - The advertising business is anticipated to grow steadily, with projected revenue of HKD 800.52 million in 2024, representing a growth rate of 5.5% [9][10]

港股公司报告 | 公司点评 美图公司（01357） 证券研究报告 2024年03月 29日 投资评级 业绩点评：业绩验证转订阅韧性，再出海赋予公司全新增长空间 行业 资讯科技业/软件服务 6个月评级 买入（维持评级） 事件：美图公司发布 2023年业绩，全年实现营业收入 27.0亿元，同比增 当前价格 3.28港元 长 29.3%；归母经调整净利润达约人民币 3.7亿元，同比增长 233.2%。从 目标价格 6.82港元 用户端来看 2023年12月 31日，公司月活跃用户数达到约2.5亿，年同比 升 2.6%；生产力应用用户数达到 1770 万，同比增长 74.3%；付费订阅用 基本数据 户数为911万，同比大幅增长 62.3%。 港股总股本(百万股) 4,534.76 全年业绩验证免费转订阅和业务增长的韧性：23年业绩增长核心贡献主要 港股总市值(百万港元) 14,874.00 系1）生成式AI 技术驱动下，影像产品组合的付费订阅用户渗透率上升 2） 每股净资产(港元) 1.01 更加清晰和积极的全球化战略下全球付费用户数稳步增长。 此前关于公司 资产负债率(%) 28.67 付费率的讨论苦于难以寻找到同 ...

Investment Rating - The report assigns a "Buy" rating to Meitu Inc (1357 HK) with a target price of HKD 4 42 [1][2] Core Views - Meitu Inc is a leading player in the aesthetic tools sector with a comprehensive product matrix covering image video and design solutions The company has successfully transitioned to a subscription-based business model which has become the core driver of revenue growth [1] - AI technology is empowering both ToB and ToC businesses with significant room for growth in subscription payment rates The company's MiracleVision visual model supports its productivity tools and has been integrated into workflows across various industries [1][27] - The company's beauty industry solutions including Meide and Meitu Yifu are experiencing rapid revenue growth and contributing to the digital transformation of the industry [1][37] Market Data - Total shares outstanding 4 478 billion Total market cap HKD 16 165 billion [1] - 1-year low high HKD 1 74-4 19 3-month turnover rate 162 8% [1] - 1-month 3-month 1-year relative returns 39 7% -2 8% 55 0% absolute returns 42 1% -1 4% 40 7% [1] Product Matrix - Image and design products include Meitu Xiuxiu Meiyan Camera Wink and Meitu Design Studio These products have maintained a leading position in the image editing sector with Meitu Xiuxiu holding a 54% MAU market share as of January 2024 [1][11] - Beauty industry solutions include Meide and Meitu Yifu which provide ERP and supply chain management SaaS solutions for cosmetics retailers and AI skin analysis for beauty brands and salons [1][11] Financial Performance - Revenue for 2023 reached RMB 2 696 billion a 29 3% YoY increase Adjusted net profit was RMB 368 million a 233 2% YoY increase [1][14] - The company expects revenue to grow to RMB 3 594 billion in 2024 RMB 4 436 billion in 2025 and RMB 5 162 billion in 2026 with adjusted net profit reaching RMB 590 million RMB 798 million and RMB 979 million respectively [1][14] AI and Subscription Growth - The company's subscription user base grew from 5 62 million in December 2022 to 9 11 million in December 2023 with the subscription payment rate increasing from 2 3% to 3 7% [1][26] - AI-driven features such as AI expansion and AI-generated content (AIGC) have significantly contributed to the growth in subscription rates [1][26] Industry Outlook - The image and design industry is expected to grow significantly driven by AI technology and increasing demand from both C-end and B-end users The market size for image digitization in China is projected to reach nearly RMB 16 billion by 2025 [1][20] Valuation - The report values Meitu Inc at 5x PS for 2024 resulting in a target market cap of HKD 19 78 billion and a target price of HKD 4 42 [1][47]

证券研究报告 | 2024年03月18日 美图公司（01357.HK） 买入 23 年底付费渗透率达 3.7%，生产力场景拓展良好 核心观点 公司研究·海外公司财报点评 总收入同比+29%，经调整归母利润3.7亿。2023全年，美图实现总收入 互联网·互联网Ⅱ 27.0亿元，同比+29%，影像产品收入增长强劲带动。2023年，影像与 证券分析师：张伦可 联系人：陈淑媛 设计产品/广告/美业解决方案收入同比增长 53%/20%/29%，占收入比 0755-81982651 021-60375431 zhanglunke@guosen.com.cnchenshuyuan@guosen.com.cn 49%/28%/21%。公司24年拓展方向：24年产品继续聚焦于以AI驱动的 S0980521120004 生产力工具上：1）AI视频相关新品；2）站酷联动也逐步体现在产品上； 基础数据 3）全球化：海外新产品、新品牌。应用场景拓展：做广告场景，和当 投资评级 买入(维持) 前电商领域有很强的共性。23年公司毛利率61%，同比+4pct。23年公 合理估值 4.50 - 4.80港元 收盘价 3.15港元 司总体费用同 ...

Investment Rating - The investment rating for the company is upgraded to "Buy" [1] Core Views - The report highlights strong revenue and profit growth driven by AI technology, with a significant increase in paid conversion rates [1][2] - The company achieved a revenue of 2.7 billion HKD in 2023, representing a year-on-year growth of 29.3% [1] - The adjusted net profit reached 368 million HKD, a remarkable increase of 233.2% year-on-year, with an adjusted net profit margin of 13.7% [1][3] Financial Performance Summary - In 2023, the company recorded a revenue of 2,695.7 million HKD, with a gross profit of 1,655.9 million HKD, resulting in a gross margin of 61% [3][4] - The company expects revenues for 2024, 2025, and 2026 to be 3.73 billion HKD, 4.66 billion HKD, and 5.60 billion HKD, respectively, with growth rates of 39%, 25%, and 20% [2][3] - The non-IFRS adjusted net profit for 2024, 2025, and 2026 is projected to be 564.9 million HKD, 739.3 million HKD, and 928.0 million HKD, respectively [2][3] User Growth and Market Expansion - The company reported a monthly active user count of 250 million by the end of 2023, reflecting a year-on-year growth of 2.6% [1] - The paid subscription user base reached over 9.11 million, marking a historical high with a year-on-year increase of 62.3% [1][2] - The company has successfully expanded its image-related products to 195 countries and regions, with flagship applications ranking first in various app store charts [1][2] AI Integration and Business Model - AI technology has been widely applied in the company's core business, significantly enhancing user engagement and operational efficiency [1] - The revenue from the image and design products based on a subscription model reached 1.33 billion HKD in 2023, up 52.8% year-on-year [1][2] - The company is actively building a product ecosystem around its AI model, MiracleVision, which is integrated across all its products [1][4]