Financial Performance - For the six months ended June 30, 2023, the adjusted net profit attributable to equity holders of the parent company was RMB 151.3 million, representing a year-on-year increase of 320.4%[3] - The total revenue for the same period was RMB 1.261 billion, a year-on-year increase of 29.8%[5] - Revenue for the six months ended June 30, 2023, reached RMB 1.26 billion, a 29.8% increase from RMB 971.88 million for the same period in 2022[16] - The net profit for the six months ended June 30, 2023, significantly increased to RMB 209.47 million, compared to a net loss of RMB 281.61 million for the same period in 2022, driven by strong growth in image products enabled by generative AI technology and a reversal of impairment losses due to rising cryptocurrency market prices[32] - Adjusted net profit attributable to equity holders for the six months ended June 30, 2023, was RMB 151.30 million, up from RMB 36 million for the same period in 2022, primarily due to revenue growth in core businesses such as imaging and design products[32] - Gross profit for the six months ended June 30, 2023, was RMB 754.02 million, compared to RMB 503.39 million for the same period in 2022[14] - Gross profit for the same period was RMB 754,022 thousand, up from RMB 503,385 thousand, indicating a significant improvement in profitability[53] - The basic earnings per share for the period was RMB 0.05, a recovery from a loss per share of RMB 0.06 in the same period last year[53] Revenue Breakdown - Revenue from image and design products reached RMB 602.2 million, up 62.2% compared to the previous year[5] - Revenue from beauty solutions increased by 31.1% year-on-year, reaching RMB 286.4 million[5] - The beauty industry solutions segment reported revenue of RMB 286.44 million, accounting for 22.7% of total revenue[16] - The advertising segment generated revenue of RMB 349.16 million, accounting for 27.7% of total revenue[16] - Revenue from beauty industry solutions increased by 31.1% year-on-year to RMB 286.4 million for the six months ended June 30, 2023, driven primarily by growth in cosmetics supply chain services[19] - Advertising revenue grew by 28.2% year-on-year to RMB 349.2 million for the six months ended June 30, 2023, attributed to increased contributions from programmatic advertising[20] User Engagement and Product Development - Monthly active users totaled 247.1 million, reflecting a growth of 1.7% from the end of 2022[5] - The company launched the visual large model MiracleVision on June 19, 2023, which will serve as a foundation for future AIGC functionalities[9] - New productivity tools, such as "Kaitai," were introduced, showing promising early performance in the market[3] - The company has been continuously releasing new AIGC features, which have gained significant traction on social media platforms[8] - The company is focusing on high-quality AIGC images in verticals such as Asian portraits and product design, anticipating high growth in user demand[9] - The company aims to expand its product offerings targeting specific productivity scenarios, leveraging its understanding of user behavior and aesthetic trends[11] Cost and Expenses - Operating costs increased by 8.4% to RMB 506.9 million for the six months ended June 30, 2023, mainly due to higher user demand for AIGC-related services[22] - Research and development expenses rose by 10.8% to RMB 294.3 million for the six months ended June 30, 2023, primarily due to increased employee costs[24] - Sales and marketing expenses increased by 21.3% to RMB 221.6 million for the six months ended June 30, 2023, driven by business expansion in imaging and design products[25] Financial Position and Investments - Cash and cash equivalents as of June 30, 2023, totaled RMB 664.57 million, down from RMB 946.60 million as of December 31, 2022[35] - Total current financial resources, including cash and short-term investments, amounted to RMB 1.42 billion as of June 30, 2023, compared to RMB 1.39 billion at the end of 2022[35] - The company maintained a low debt-to-equity ratio of 0.50% as of June 30, 2023, compared to 0.30% at the end of 2022, indicating low reliance on borrowing for operations[43] - The company made minor investments in technologies or businesses deemed beneficial, with total investments amounting to RMB 35.32 million as of June 30, 2023[40] Cryptocurrency and Impairment - The company recorded a reversal of impairment losses on cryptocurrency amounting to RMB 185.56 million for the six months ended June 30, 2023, compared to an impairment loss of RMB 305.46 million for the same period in 2022[33] - The group continues to hold approximately 31,000 units of Ethereum and about 940.4970 units of Bitcoin, with fair values of approximately $57.41 million and $28.28 million, respectively, as of June 30, 2023[45] - The group’s cryptocurrency holdings included RMB 365,020,000 in Ethereum and RMB 204,322,000 in Bitcoin as of June 30, 2023[82] Corporate Governance and Strategic Outlook - The company has maintained compliance with the corporate governance code, except for the separation of the roles of Chairman and CEO, which the board deems appropriate under current circumstances[89] - The board of directors includes experienced members, which may enhance governance and strategic decision-making[96] - The company is focused on developing new business plans and strategies to improve financial performance[96] - The company is actively monitoring market trends to adapt its strategies accordingly[96] - The management emphasizes the need for careful evaluation of business strategies in light of market uncertainties[96] Shareholder Information - The group declared a final dividend of RMB 81,395,000 for the six months ended June 30, 2023, compared to no dividend for the same period in 2022[76] - The company did not recommend an interim dividend for the six months ended June 30, 2023[92] - The anticipated gain from the sale of Dajie Net shares is expected to be approximately RMB 70,000,000, which will be recognized in the consolidated income statement for the year ending December 31, 2023[88]

年 度 報 告 eitu 股份代號 : 1357 〔於開曼群島註冊成立的有限公司‧並以「美國之家」名稱於香港經營業務〕 meitu美图 | --- | --- | --- | |-------|----------------------|-------| | | | | | | | | | | | | | | | | | | 目錄 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 公司資料 | 2 | | | 2022 年摘要 | 4 | | | 主要財務數據 | 6 | | | | | | | 主要運營數據 | 7 | | | | | | | 主席報告 | 8 | | | | | | | 管理層討論與分析 | 12 | | | | | | | 董事及高級管理層 | 26 | | | 董事會報告 | 33 | | | 企業管治報告 | 79 | | | 環境、社會及管治報告 | 99 | | | 獨立核數師報告 | 150 | | | 合併收入表 | 156 | | | 合併綜合收益表 | 157 | | | 合併資產負債表 | ...

Financial Performance - The company achieved its first annual profit since its IPO, with a net profit attributable to shareholders of RMB 94.1 million, compared to a net loss of RMB 44.5 million in 2021[4]. - Revenue increased by 25.2% year-on-year to RMB 2.085 billion, with VIP subscription business being the largest revenue source at RMB 782.2 million, a growth of 57.4%[6]. - The adjusted net profit attributable to shareholders was RMB 110.5 million, representing a year-on-year increase of 29.9%[6]. - Total revenue for the year ended December 31, 2022, increased to RMB 2.085 billion, a 25.2% increase from RMB 1.667 billion for the year ended December 31, 2021, primarily driven by robust growth in VIP subscription and SaaS-related businesses[20]. - The company reported a net profit of RMB 18.891 million for the year, a significant recovery from a loss of RMB 77.430 million in the previous year[19]. - The company reported a net profit before tax of RMB 175.230 million for the year ended December 31, 2022, compared to a loss of RMB 10.935 million in 2021[77]. User Engagement and Growth - Monthly active users (MAUs) grew by 5.3% year-on-year, reaching 242.9 million as of December 2022[7]. - The number of monthly active users for the flagship app Meitu Xiu Xiu increased by 13.0% to 129.6 million[7]. - As of December 2022, Meitu Xiuxiu held approximately 53% market share in the mobile image editing market, up from 47% in 2021, with 242.9 million monthly active users showing a year-on-year growth rate of 5.3%[9][11]. Revenue Streams - The VIP subscription business has become the largest revenue source for the company, with high gross margins expected to continue growing, driven by an increase in paid subscribers and average revenue per paid user[10]. - SaaS revenue grew significantly by 1,093.2% to RMB 462.9 million, driven by the acquisition of a business providing ERP and supply chain management solutions to over 11,000 cosmetics stores in China[6]. - VIP subscription revenue grew by 57.4% to RMB 782.165 million, accounting for 37.5% of total revenue, with over 5.6 million VIP users and a paid penetration rate of approximately 2.3%[22]. - SaaS and related business revenue surged by 1,093.2% to RMB 462.907 million, largely due to the acquisition of Meidede, which provides ERP SaaS solutions to over 11,000 cosmetics retailers[24]. Investment and Future Plans - The company plans to continue investing in artificial intelligence and expand productivity applications to meet work-related needs, aiming to drive higher MAUs and paid penetration rates[5]. - The company aims to become the largest global provider of image and video productivity software and subscription services, focusing on digital transformation in the beauty industry through SaaS solutions[9]. - The company plans to enhance its work-related products, such as Meitu Design Studio, which has shown 60-70% higher average revenue per paid user compared to social-focused applications[12]. - The company plans to introduce more high-margin niche products to enhance profitability in the SaaS segment as customer numbers and average purchase volumes increase[19]. Financial Health and Liquidity - Cash and cash equivalents increased to RMB 946,602,000 in 2022 from RMB 738,732,000 in 2021, reflecting a growth of about 28%[40]. - Total current financial resources, including cash and short-term investments, rose to RMB 1,390,031,000, compared to RMB 1,258,191,000 in 2021, marking an increase of approximately 10%[40]. - The company maintained a healthy liquidity position, closely monitoring its cash flow and financial resources to meet ongoing funding needs[41]. - The company’s total liabilities rose to RMB 1,294,834 thousand in 2022 from RMB 1,231,512 thousand in 2021, indicating an increase in financial obligations[63]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.02 per share, with a payout ratio of approximately 70.6% based on the adjusted net profit attributable to shareholders[5]. - The board proposed a final dividend of HKD 0.02 per share, totaling approximately HKD 88,900,000 (around RMB 78,000,000), marking the first dividend since the company's IPO[46]. - The dividend payout ratio for the year was approximately 70.6% of the adjusted net profit attributable to the company's owners[46]. Operational Efficiency - Operating costs increased by 66.0% to RMB 898.1 million for the year ended December 31, 2022, compared to RMB 540.9 million in 2021[28]. - Research and development expenses rose by 7.5% to RMB 586.4 million for the year ended December 31, 2022, compared to RMB 545.5 million in 2021[30]. - Sales and marketing expenses increased by 3.1% to RMB 403.1 million for the year ended December 31, 2022, up from RMB 391.0 million in 2021[31]. Strategic Acquisitions and Investments - The company acquired approximately 20.67% equity in Meidede for a total consideration of approximately RMB 79.74 million, increasing its ownership to approximately 63.35%[58]. - The company invested approximately USD 100 million in cryptocurrencies, acquiring 31,000 units of Ethereum and 940.88523 units of Bitcoin, with a fair value of approximately USD 37.3 million and USD 15.6 million respectively as of December 31, 2022[55]. - The company plans to continue seeking strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[57]. Compliance and Governance - The company confirmed compliance with the corporate governance code applicable as of December 31, 2022[102]. - The audit committee reviewed the financial statements for the year ended December 31, 2022, confirming they were prepared in accordance with applicable accounting standards[104].

Revenue Growth - Total revenue for the first half of 2022 increased by 20.5% year-on-year to RMB 971.2 million, driven by strong growth in VIP subscription services[23] - VIP subscription business became the largest revenue source, reaching RMB 339.2 million, a year-on-year increase of 61.4%[25] - Revenue from online advertising fell by 35.1% year-on-year to RMB 254.7 million, indicating a shift in revenue sources[25] - Revenue from SaaS and related businesses surged by 1,542.3% in the first half of 2022, primarily serving the cosmetics and skincare industries[35] - Revenue from internet value-added services increased by 11.7% year-on-year to RMB 41.7 million for the six months ended June 30, 2022, compared to RMB 37.3 million for the same period in 2021[47] User Metrics - Monthly active users (MAUs) grew to 240.9 million as of June 30, 2022, representing a 4.5% increase from December 31, 2021[26] - The number of MAUs for Meitu Xiuxiu reached 124.7 million, an increase of 8.7% from the previous period[26] - The number of MAUs in mainland China increased by 11.2% to 171.1 million, while overseas MAUs decreased by 9.0% to 69.8 million[26] - The monthly active user base grew by 4.5% compared to December 2021, indicating a stable user foundation for VIP subscription growth[30] Profitability and Losses - Adjusted net profit attributable to the company’s owners rose by 7.9% year-on-year to RMB 36.0 million[25] - The company reported a net loss of RMB 281.61 million for the six months ended June 30, 2022, compared to a net loss of RMB 137.68 million for the same period in 2021[38] - The net loss for the six months ended June 30, 2022, increased significantly to RMB 281.6 million, compared to RMB 137.7 million for the same period in 2021, primarily due to impairment losses on purchased cryptocurrencies[57] - The total comprehensive loss for the six months ended June 30, 2022, was RMB 235,868 thousand, compared to RMB 151,520 thousand for the same period in 2021, representing an increase of approximately 55.6%[107] Cost and Expenses - The gross profit margin decreased to 51.8%, down 14.3 percentage points compared to the previous year[25] - Operating costs increased by 71.2% year-on-year to RMB 467.8 million for the six months ended June 30, 2022, compared to RMB 273.2 million for the same period in 2021[49] - Research and development expenses increased slightly to RMB 265.49 million from RMB 259.46 million year-over-year[40] - Administrative expenses increased by 8.0% year-on-year to RMB 136.3 million for the six months ended June 30, 2022, compared to RMB 126.2 million for the same period in 2021[52] Strategic Initiatives - The company aims to maximize revenue from existing customers by expanding the range of competitive products available through its supply chain management SaaS[32] - The company plans to optimize costs and expenses to ensure prudent operations while investing more in R&D to enhance product performance[35] - The company is focusing on expanding its SaaS and ERP services for cosmetics retailers, which is expected to generate new revenue streams[116] - The company aims to expand its VIP subscription user base by enhancing premium features and offering various subscription models[44] Financial Position - Cash and cash equivalents as of June 30, 2022, amounted to RMB 793.065 million, an increase from RMB 738.732 million as of December 31, 2021[61] - Total current financial resources, including cash and cash equivalents, short-term and long-term bank deposits, were RMB 1,090.493 million as of June 30, 2022, down from RMB 1,258.191 million as of December 31, 2021[61] - The company maintained a low debt-to-equity ratio of 0.3% as of June 30, 2022, consistent with the ratio as of December 31, 2021[67] - The company reported a basic and diluted loss per share of RMB (0.06), compared to RMB (0.03) for the same period last year, indicating a 100% increase in loss per share[98] Investments and Acquisitions - The company acquired approximately 20.67% equity in Meidede for a total consideration of approximately RMB 79,742,000, which included RMB 39,871,000 in cash and the issuance of 29,452,667 shares at an issue price of HKD 1.66 per share[71] - As of June 30, 2022, the group holds approximately 63.35% equity in Meidede, which has become a subsidiary of the group[71] - The company made investments in financial assets measured at fair value totaling RMB 33.321 million for the six months ended June 30, 2022, compared to RMB 77.903 million for the same period in 2021[64] Compliance and Governance - The company has adhered to the corporate governance code as of June 30, 2022, ensuring transparency and accountability[84] - The audit committee has reviewed the unaudited interim financial statements for the six months ended June 30, 2022, confirming compliance with applicable accounting standards[90] - The interim financial data has been reviewed and found to comply with International Accounting Standards[96] Market and Regulatory Environment - Foreign investors are prohibited from holding more than 50% equity in companies providing value-added telecommunications services in China[91] - As of May 1, 2022, the qualification requirements for foreign investors in the value-added telecommunications sector have been abolished[91] - The approval process for foreign investment remains uncertain due to the lack of clear guidelines[91]

Financial Performance - Total revenue for the first half of 2022 increased by 20.5% year-on-year to RMB 971.2 million, with adjusted net profit attributable to the company owners rising by 7.9% to RMB 36 million[4]. - The company's revenue for the six months ended June 30, 2022, reached RMB 971.88 million, a 20.5% increase compared to RMB 806.00 million for the same period in 2021[15]. - Total revenue for the six months ended June 30, 2022, was RMB 971,188,000, representing a 20.5% increase from RMB 806,004,000 for the same period in 2021[55]. - The company reported a net loss of RMB 281,613,000 for the six months ended June 30, 2022, compared to a net loss of RMB 137,679,000 for the same period in 2021, reflecting an increase in losses of approximately 104.5%[45]. - Adjusted profit attributable to owners for the six months ended June 30, 2022, was RMB 36 million, compared to RMB 33.4 million for the same period in 2021, driven by revenue growth from VIP subscription services[30]. Revenue Sources - VIP subscription business became the largest revenue source, generating RMB 339.2 million in the first half of 2022, a significant growth of 61.4% year-on-year[6]. - The VIP subscription business was the largest revenue source, growing by 61.4% year-on-year, with over 5 million active paying subscribers as of June 2022[13]. - Revenue from SaaS and related businesses surged by 1,542.3% in the first half of 2022, contributing RMB 226.55 million, which accounted for 23.3% of total revenue[15][16]. - Revenue from SaaS and related services surged by 1,542.3% year-on-year to RMB 226.6 million for the six months ended June 30, 2022, mainly due to natural growth and the acquisition of Meidede Technology[19]. - Revenue from online advertising declined by 35.1% year-on-year to RMB 254.7 million, indicating a shift in revenue sources[6]. User Engagement - Monthly active users reached 240.9 million in June 2022, a 4.5% increase compared to December 2021, driven primarily by the popularity of the Meitu Xiuxiu app[4]. - The number of VIP subscribers is expected to continue growing rapidly, supported by a large and stable base of monthly active users[9]. - The company is focusing on enhancing user experience through in-app marketing and optimizing VIP features to maintain high retention rates[9]. - New applications like Wink, which focuses on video portrait editing, are being introduced to further drive VIP subscription growth[9]. Operating Costs and Expenses - Operating expenses increased, with a focus on R&D investments to enhance product performance, while the company plans to optimize costs moving forward[13]. - Operating costs increased by 71.2% year-on-year to RMB 467.8 million for the six months ended June 30, 2022, with SaaS and related services being the largest contributor to this increase[22]. - R&D expenses increased by 2.3% year-on-year to RMB 265.5 million for the six months ended June 30, 2022, primarily due to increased employee costs[24]. - Sales and marketing expenses decreased by 2.9% year-on-year to RMB 182.7 million for the six months ended June 30, 2022, mainly due to reduced employee costs[24]. - Administrative expenses for the six months ended June 30, 2022, were RMB 136.3 million, an increase of 8.0% compared to RMB 126.2 million for the same period last year, primarily due to increased employee costs[25]. Cryptocurrency and Impairment - The fair value of purchased cryptocurrencies as of June 30, 2022, was approximately USD 32 million for Ethereum and USD 18 million for Bitcoin, with impairment losses recognized of RMB 124.1 million and RMB 181.4 million respectively[25]. - The company reported a net impairment loss on cryptocurrencies of RMB 305,457,000 for the six months ended June 30, 2022, compared to RMB 111,907,000 in the previous year, indicating a significant increase in impairment losses[44]. - The impairment loss on cryptocurrencies for the six months ended June 30, 2022, is RMB 305,457,000, compared to RMB 111,907,000 for the same period in 2021[69]. Strategic Initiatives - The company is leveraging its brand image and technological capabilities in AI and computer vision to provide enterprise solutions in the beauty industry[10]. - The company aims to maximize revenue by expanding the range of competitive products offered through its supply chain management SaaS and converting existing ERP customers[11]. - The company plans to introduce higher-margin premium products as it expands its market share and customer trust in the supply chain management sector[11]. - The company plans to continue its strategic focus on expanding its SaaS offerings and enhancing its ERP systems for cosmetics retailers[53]. - The company plans to seek strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[41]. Financial Position - Cash and cash equivalents as of June 30, 2022, amounted to RMB 793.1 million, compared to RMB 738.7 million as of December 31, 2021[32]. - The company has a low debt-to-equity ratio of 0.3% as of June 30, 2022, consistent with the previous year, indicating minimal reliance on borrowing for operations[38]. - As of June 30, 2022, total assets decreased to RMB 4,449,398 thousand from RMB 4,747,314 thousand as of December 31, 2021, representing a decline of approximately 6.3%[46]. - The company reported a total equity of RMB 3,357,773 thousand as of June 30, 2022, down from RMB 3,515,802 thousand as of December 31, 2021, indicating a decrease of about 4.5%[47]. - The company’s accumulated losses increased to RMB (3,795,172) thousand as of June 30, 2022, compared to RMB (3,528,927) thousand as of December 31, 2021, marking an increase of approximately 7.6%[47]. Governance and Compliance - The audit committee reviewed the unaudited interim financial statements for the six months ended June 30, 2022, confirming compliance with applicable accounting standards[77]. - The company has adopted the Corporate Governance Code and confirmed compliance with its provisions for the six months ended June 30, 2022[76]. - The interim results announcement will be published on or before September 30, 2022[81].

Financial Performance - In 2021, the company's revenue reached RMB 1.666 billion, representing a year-on-year growth of 39.5% compared to RMB 1.194 billion in 2020[10]. - The adjusted net profit attributable to the company's owners for the year was RMB 85.073 million, a 39.7% increase from RMB 60.892 million in 2020, marking the second consecutive year of profitability[12]. - The gross profit for 2021 was RMB 1.125 billion, with a gross margin of 67.5%, up from 66.5% in 2020, indicating improved profitability[12]. - Online advertising revenue increased by 12.5% to RMB 765.849 million, compared to RMB 680.709 million in 2020[12]. - The company reported a net loss of RMB 77.430 million for the year, which is a 28.8% increase in losses compared to RMB 60.132 million in 2020[12]. - Revenue from VIP subscriptions and image SaaS grew significantly by 146.9% to RMB 519.49 million, representing 31.2% of total revenue[35]. - Internet value-added services revenue rose by 51.9% to RMB 81.67 million, driven by increased revenue sharing from third-party partners[36]. - Revenue from other businesses increased by 20.0% year-on-year to RMB 299 million for the year ended December 31, 2021, compared to RMB 249 million for the year ended December 31, 2020[37]. - The company had approximately 4 million VIP members globally by December 2021, more than doubling from the end of 2020[35]. - Total revenue for the year ended December 31, 2021, increased by 39.5% to RMB 1,666.03 million from RMB 1,194.02 million for the year ended December 31, 2020[30]. User Engagement - The total monthly active users decreased to 230.644 thousand, down 11.6% from 261.048 thousand in 2020[15]. - The monthly active users for the BeautyPlus app dropped by 32.7% to 37.116 thousand, while the number for the Beauty Camera app decreased by 8.1% to 56.870 thousand[15]. Strategic Initiatives - The company is focusing on expanding its image SaaS solutions targeting design professionals and individuals, leveraging computer vision technology[10]. - The company aims to enhance its product offerings and market presence through strategic initiatives in the coming years[10]. - The company's SaaS strategy for the imaging and beauty industries is expected to drive future revenue growth, with a focus on AI technology and design solutions[20]. - The company plans to launch a second-generation skin analysis device with enhanced features, aimed at expanding its customer base in the medical beauty sector[22]. - The company plans to enhance competitiveness by providing more beauty-related products and services, leveraging the growing trend of brands using live streaming for marketing[34]. - The company aims to continue investing in user experience improvements for its services, anticipating ongoing growth in its VIP subscription and image SaaS business[35]. Cost Management - The company is focusing on optimizing costs and expenditures while maintaining operational efficiency amid rising operating expenses in 2021[25]. - Operating costs increased by 35.2% to RMB 540.9 million for the year ended December 31, 2021, up from RMB 400.1 million for the year ended December 31, 2020[38]. - Research and development expenses increased to RMB 545.49 million from RMB 404.21 million in the previous year[29]. - Sales and marketing expenses increased by 36.0% to RMB 391 million for the year ended December 31, 2021, up from RMB 287.5 million for the year ended December 31, 2020[42]. - Administrative expenses grew by 28.7% to RMB 265 million for the year ended December 31, 2021, compared to RMB 205.9 million for the year ended December 31, 2020[43]. Investments and Acquisitions - The company has entered into a further acquisition agreement to gain controlling interest in Meide, which will be consolidated into the group from January 2022[21]. - On April 9, 2021, the company acquired approximately 9.57% equity in Meidede for a total cash consideration of RMB 19,133,200, increasing its stake from approximately 33.11% to approximately 42.68%[68]. - On December 17, 2021, the company entered into an agreement to acquire an additional 20.67% equity in Meidede for approximately RMB 79,741,920, resulting in a total ownership of approximately 63.35%[68]. - The company plans to continue seeking strategic investment opportunities to establish synergies in technology development, product research, product portfolio, channel expansion, and cost control[67]. Financial Position - Cash and cash equivalents decreased to RMB 738,732,000 in 2021 from RMB 1,158,117,000 in 2020, a decline of approximately 36.2%[55]. - The company maintained a healthy liquidity position with total current financial resources of RMB 1,258,191,000 as of December 31, 2021, down from RMB 2,182,016,000 in 2020[55]. - The company's debt-to-equity ratio was 0.3% as of December 31, 2021, down from 0.5% in 2020, indicating a reduction in reliance on debt financing[62]. - The workforce increased to 2,090 full-time employees in 2021 from 1,770 in 2020, reflecting a growth of approximately 18.1%[63]. Corporate Governance - The company has a strong management team, including CFO Yan Jinliang and COO Wang Xiujuan, who joined in June 2015 and August 2019 respectively[80]. - The company has established a remuneration committee to formulate remuneration policies for directors and senior management[96]. - The board of directors has confirmed the independence of all independent non-executive directors as per the listing rules[127]. - The company has purchased liability insurance for its directors to provide adequate protection[130]. Regulatory Compliance - The acquisition and ongoing related party transactions are subject to independent shareholder approval and regulatory compliance as per listing rules[145]. - The company has obtained necessary licenses and permits for its operations, including the Internet Culture Business License and the ICP License[147]. - The company is closely monitoring regulatory developments in China to mitigate risks associated with the Meitu Yifu contractual arrangements[173]. - The company has been advised that the existing Dajie VIE agreement does not violate relevant Chinese regulations[190]. Shareholder Information - The company did not recommend the distribution of a final dividend for the year ended December 31, 2021[93]. - The employee stock option plan allows for a total of 116,959,070 shares to be granted, with 18,692,770 shares of options unexercised as of December 31, 2021[100]. - The maximum number of shares that can be issued under the post-IPO share option plan is capped at 30% of the company's issued share capital[103]. - As of December 31, 2021, a total of 422,729,455 shares are available for grant under the post-IPO share option plan, representing 9.71% of the issued share capital[103]. Market Position - The main business segments include online advertising and internet value-added services, as well as smart hardware production[88]. - The company generates revenue from online advertising and sales of virtual goods through its mobile applications, with significant income derived from these operations[147].

Revenue Growth - Total revenue for the first half of 2021 reached RMB 806 million, a year-on-year increase of 44.6%[24] - Revenue from premium subscription services and in-app purchases surged by 150.7%, amounting to RMB 211 million[24] - Revenue for the first half of 2021 increased by 44.6% to RMB 806.0 million compared to RMB 557.5 million in the same period of 2020[33] - Online advertising revenue grew by 23.3% to RMB 393 million[24] - Internet value-added services revenue increased by 65.6% to RMB 35.3 million[24] - Advertising business grew by 23.3% year-on-year, contributing significantly to overall revenue recovery[33] - Revenue from premium subscription services and in-app purchases surged 150.7% year-on-year to RMB 210.9 million, attributed to the optimization of premium features and an increase in new and renewing subscribers[44] - Other revenue increased by 25.2% year-on-year to RMB 167.2 million, with the influencer marketing solutions (IMS) business contributing 87.0% of this revenue[46] Profitability - Gross profit increased by 49.8% to RMB 533 million, with a gross margin of 66.1%[24] - Adjusted net profit attributable to the company's owners was RMB 33.4 million, reflecting a 33.8% increase year-on-year[24] - Gross profit for the first half of 2021 was RMB 532.8 million, up from RMB 355.7 million in the previous year[37] - The adjusted net profit attributable to the company’s owners was RMB 33.4 million, compared to RMB 24.9 million in the same period last year[39] - The adjusted profit attributable to the owners for the six months ended June 30, 2021, was RMB 33.58 million, compared to RMB 24.94 million for the same period in 2020, driven by growth in premium subscription services and in-app purchases[61] Expenses and Costs - Operating expenses increased, with R&D spending rising to RMB 259.5 million from RMB 188.0 million year-on-year[37] - Research and development expenses rose by 38.0% year-on-year to RMB 259.5 million, mainly due to increased personnel costs[51] - Sales and marketing expenses increased by 39.8% year-on-year to RMB 188.2 million, driven by higher promotional and employee costs[52] - Operating costs increased by 35.4% year-on-year to RMB 273.2 million, with the IMS business being the largest contributor to this increase[49] Cash Flow and Liquidity - Total cash and cash equivalents as of June 30, 2021, were RMB 772.26 million, down from RMB 1,158.12 million as of December 31, 2020[64] - The company reported a total of RMB 1.11 billion in cash and other liquid financial resources as of June 30, 2021, compared to RMB 2.18 billion as of December 31, 2020[64] - The company maintained a healthy liquidity position with a focus on prudent financial management as of June 30, 2021[65] - Cash used in operating activities for the six months ended June 30, 2021, was RMB 348,349 thousand, compared to RMB 79,211 thousand for the same period in 2020[117] Losses and Impairments - The net loss for the six months ended June 30, 2021, increased significantly to RMB 137.68 million from RMB 24.99 million in the same period of 2020, primarily due to impairment losses on purchased cryptocurrencies[60] - The company reported a net impairment loss on cryptocurrency of RMB 111,907 thousand, with no such loss reported in the previous year[103] - The company reported a net loss attributable to equity holders of RMB 128,666,000 for the six months ended June 30, 2021, compared to a loss of RMB 15,953,000 for the same period in 2020[157] Employee and Shareholder Information - The company employed a total of 1,909 full-time employees as of June 30, 2021, an increase from 1,770 employees as of December 31, 2020[75] - The company has a competitive compensation policy to retain employees, including salaries, discretionary bonuses, and benefits plans[75] - As of June 30, 2021, the company had a total of 4,351,883,565 shares issued, with significant shareholders holding various percentages of equity[78][81] - The largest shareholder, Lion Trust (Singapore) Limited, held 1,398,366,670 shares, representing 32.13% of the total shares[81] Strategic Initiatives - The company anticipates continued revenue growth driven by premium subscription services, online advertising, and new business initiatives[35] - The company is focusing on integrating the beauty ecosystem to replicate past successes through the right commercialization strategies[35] - The company plans to seek strategic investment opportunities using existing internal resources and/or other funding sources to enhance technology development, product research, and market expansion[74] Financial Position - Total assets as of June 30, 2021, were RMB 4,435,339 thousand, a slight decrease from RMB 4,507,160 thousand as of December 31, 2020[110] - The company’s total equity decreased to RMB 3,446,552 thousand from RMB 3,567,835 thousand, indicating a decline in shareholder value[110] - The company’s total fair value of financial assets increased to RMB 599,841,000 as of June 30, 2021, compared to RMB 555,433,000 in the previous year[149] Corporate Governance - The company has complied with the corporate governance code as of June 30, 2021, ensuring effective internal control measures and transparency[86] - The audit committee has reviewed the unaudited interim financial statements for the six months ended June 30, 2021, confirming compliance with applicable accounting standards[92] Cryptocurrency Investments - The company holds cryptocurrencies such as Ethereum and Bitcoin, classified as intangible assets with an indefinite useful life, subject to annual impairment testing[125] - The company purchased cryptocurrencies totaling RMB 649,969,000 during the six months ended June 30, 2021, including 31,000 units of Ethereum and 940.88522604 units of Bitcoin[162] - The carrying amount of cryptocurrencies as of June 30, 2021, was RMB 534,103,000 for Ethereum and RMB 646,010,000 for Bitcoin[165] - The company faces price risk related to its cryptocurrency investments, with a potential pre-tax loss impact of approximately RMB 20,776,000 if the fair value of cryptocurrencies fluctuates by 10%[166]

Financial Performance - For the fiscal year ended December 31, 2020, the company reported a total revenue of RMB 1,194,020 thousand, representing a year-on-year increase of 22.1%[16] - The adjusted profit attributable to the company's owners for the same period was RMB 60,892 thousand, a significant turnaround from a loss of RMB 190,813 thousand in the previous year[16] - The company's gross profit for 2020 was RMB 793,871 thousand, with a gross margin of 66.5%, down from 71.5% in 2019[16] - Revenue from premium subscription services and in-app purchases surged by 140.1% year-on-year, reaching RMB 206,489 thousand[16] - The online advertising segment generated revenue of RMB 680,709 thousand, a decline of 9.5% from RMB 751,886 thousand in 2019[16] - The company experienced a significant increase in revenue from other services, which rose by 177.1% to RMB 261,611 thousand[16] - The company reported a loss from continuing operations of RMB 60,132 thousand, a substantial improvement of 82.5% compared to a loss of RMB 344,061 thousand in the previous year[16] - Total revenue for the year ended December 31, 2020, increased to RMB 1,194.02 million, a significant rise of 22.1% compared to RMB 977.87 million for the year ended December 31, 2019[37] - Revenue from online advertising decreased by 9.5% year-on-year to RMB 680.71 million, primarily due to the impact of the COVID-19 pandemic[41] - Revenue from premium subscription services and in-app purchases surged by 140.1% year-on-year to RMB 206.49 million, up from RMB 85.99 million in the previous year[42] - Revenue from other sources increased significantly by 177.1% to RMB 261.61 million, compared to RMB 94.39 million in the previous year, driven mainly by the IMS business[45] User Engagement - Monthly active users (MAUs) totaled 261,048 thousand as of December 31, 2020, reflecting a decrease of 7.6% compared to 282,472 thousand in 2019[19] - The peak daily active users for the flagship app Meitu Xiu Xiu reached over 31 million during the 2021 Spring Festival, driven by the successful launch of the "Meitu Formula" feature[14] - Monthly active users declined by 7.6% year-on-year due to the Indian government's ban on Chinese apps, but overall monthly active users remained stable excluding this impact[27] - The company reported a significant increase in user engagement, with a year-over-year growth of 25% in active users[81] - User retention rates improved to 85%, reflecting successful engagement strategies implemented over the past year[86] Strategic Focus and Growth - The company is focusing on adjusting its overseas strategy to drive high-value user growth rather than just increasing the number of ordinary users[14] - The company is focusing on high-value user growth that can generate profits, shifting its strategy from general user growth[27] - The company expects continued revenue growth in 2021 driven by the rapid development of premium subscription services and in-app purchases, while also planning to increase investments in technology and human resources[59] - The company is expanding its user base in countries along the Belt and Road Initiative[27] - The company is expanding its market presence in Southeast Asia, targeting a 20% market share by the end of 2024[87] - The company plans to pursue strategic acquisitions to enhance its product offerings and market reach, with a budget of $50 million allocated for this purpose[84] Research and Development - The company launched a SaaS solution to integrate the beauty ecosystem, focusing on AI technology, marketing, and supply chain management[28] - The flagship AI skin analysis device of Meitu Yifu has been deployed in over 200 cities globally, with partnerships established with leading cosmetic brands[29] - The second-generation AI skin testing product is currently under development, aiming to provide better user experience and more accurate analysis[45] - Research and development expenses for the year ended December 31, 2020, were RMB 404.2 million, a decrease of 19.3% from RMB 500.6 million for the year ended December 31, 2019, primarily due to more effective cost control in employee expenses[50] - Research and development investments have increased by 40%, focusing on innovative technologies in image editing software[81] Financial Position and Investments - Cash and cash equivalents as of December 31, 2020, were RMB 1,158.1 million, an increase from RMB 864.6 million as of December 31, 2019[64] - Total current financial resources as of December 31, 2020, were RMB 2,182.0 million, a decrease from RMB 2,621.6 million as of December 31, 2019[64] - The company has terminated its smartphone business in 2019 and exited its e-commerce business in 2018, focusing entirely on its internet business[63] - Capital expenditures increased significantly to RMB 352,503,000 in 2020 from RMB 12,749,000 in 2019, primarily due to the purchase of office properties[68] - Investments in financial assets measured at fair value through profit or loss amounted to RMB 115,160,000 in 2020, up from RMB 12,338,000 in 2019[69] - The company's debt-to-equity ratio as of December 31, 2020, was 0.5%, compared to 0.0% in 2019, indicating a low reliance on debt financing[73] - The company has no significant contingent liabilities as of December 31, 2020, maintaining a stable financial position[72] Corporate Governance and Management - The board of directors has approved a new strategic initiative to diversify revenue streams, including entering the e-commerce sector[85] - The board has the authority to determine the minimum holding period before stock options vest, although no specific minimum holding period is stipulated in the plan[131] - The board may grant rewards to eligible participants who have contributed or are expected to contribute to the group, with prior approval required for rewards granted to directors[137] - The independent non-executive directors confirmed that transactions conducted during the fiscal year ended December 31, 2020, were established according to the relevant terms of the contract arrangements[192] - The company has purchased liability insurance for its directors to provide appropriate protection[151] Regulatory and Compliance - The company faces risks related to its contractual arrangements, including potential penalties from the Chinese government if agreements are deemed non-compliant[174] - The company is closely monitoring regulatory developments in China to mitigate risks associated with contract arrangements[187] - The Dajie VIE agreement allows the company to indirectly control the domestic target company and its subsidiaries, facilitating the consolidation of their financial performance[194] - The Dajie VIE agreement was established to comply with the 2020 Negative List, which restricts foreign investment in certain sectors, including value-added telecommunications services[195] - The agreements are designed to prevent asset and value flow from the domestic target company to its related shareholders without Dajie's consent[200]

Financial Performance - The adjusted net profit attributable to owners of the company for the first half of 2020 was RMB 24.94 million, marking a significant recovery from a loss of RMB 173.78 million in the same period of 2019[9]. - Revenue for the first half of 2020 reached RMB 557.47 million, representing a year-on-year increase of 20.1%[9]. - Gross profit for the first half of 2020 was RMB 355.73 million, with a gross margin of 63.8%, down 2.6 percentage points from 66.4% in the first half of 2019[9]. - The total revenue for the six months ended June 30, 2020, increased to RMB 557.465 million, a significant rise of 20.1% compared to RMB 464.024 million for the same period in 2019[18]. - The company reported a significant increase in revenue from other services, which rose by 126.2% to RMB 133.49 million[9]. - Revenue from premium subscription services and in-app purchases surged by 209.2% year-on-year to RMB 84.1 million, representing 15.1% of total revenue[23]. - Internet value-added services revenue increased by 37.3% year-on-year to RMB 21.3 million, making up 3.8% of total revenue[24]. - The company anticipates continued revenue growth driven by new IMS, premium subscription services, and in-app purchases, although advertising business outlook remains uncertain due to the global pandemic[13]. User Engagement - Monthly active users reached 295.44 million as of June 30, 2020, an increase of 4.6% compared to December 31, 2019[10]. - The number of monthly active users for the BeautyPlus app increased by 18.1% to 78.09 million[10]. - Monthly active users reached 295.4 million in June 2020, up 4.6% from December 2019, with average daily usage time increasing from 13.6 minutes to 15.4 minutes[13]. - The average daily usage time for social users of the Meitu Xiuxiu app was 15.4 minutes, up 13.2% from the second half of 2019[7]. - The company reported a significant increase in monthly active users, reaching 100 million, representing a growth of 20% year-over-year[167]. Advertising Revenue - The online advertising revenue decreased by 12.1% to RMB 318.51 million, impacted by COVID-19[9]. - Advertising revenue declined by 12.1% due to the impact of COVID-19, but showed a significant recovery as the pandemic situation in mainland China improved[13]. - Online advertising revenue decreased by 12.1% year-on-year to RMB 318.5 million, accounting for 57.1% of total revenue[20]. Cost Management - The company reduced sales and marketing, R&D, and administrative expenses by 21.2%, 25.5%, and 21.5% respectively during the first half of 2020[13]. - Research and development expenses decreased by 25.5% year-on-year to RMB 188 million due to effective cost control measures[28]. - Sales and marketing expenses fell by 21.2% year-on-year to RMB 134.6 million, reflecting improved cost management[29]. - Administrative expenses decreased by 21.5% year-on-year to RMB 101 million, attributed to effective cost control[30]. - The total operating costs, including sales, marketing, administrative, and R&D expenses, amounted to RMB 625,324 thousand, down from RMB 707,858 thousand in the previous year[113]. Financial Position - The company has over RMB 2.5 billion in cash and liquid financial resources available for continued investment in technology innovation and business development[13]. - Cash and cash equivalents as of June 30, 2020, amounted to RMB 649.29 million, down from RMB 864.61 million as of December 31, 2019[39]. - Total current financial resources, including cash and cash equivalents, short-term and long-term bank deposits, were RMB 2.52 billion as of June 30, 2020, compared to RMB 2.62 billion as of December 31, 2019[39]. - The company has maintained a healthy liquidity position as of June 30, 2020, with a focus on prudent financial management to meet its funding needs[40]. - The company’s total liabilities decreased to RMB 704,831 thousand from RMB 880,510 thousand, a reduction of approximately 20%[84]. Strategic Initiatives - The company is focusing on strategic measures to counteract the impact of COVID-19 on its advertising revenue while leveraging growth in premium subscription services[7]. - The new IMS business focuses on providing multi-platform social advertising marketing services, leveraging the company's rich user resources and content production capabilities[12]. - A strategic partnership was established with Christian Dior for AI skin analysis and product recommendations for users in China[12]. - E-commerce live streaming tests were conducted in the first half of 2020, with plans for further testing in the second half[12]. - The company continues to seek strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[48]. Operational Changes - The company has terminated its smartphone business in 2019 and exited its e-commerce business in 2018, focusing entirely on its internet business[38]. - The company has not conducted any significant acquisitions or disposals of subsidiaries or associates in the six months ending June 30, 2020, apart from the sale of PressLogic[48]. - The company has ceased smartphone manufacturing and exited the e-commerce business to focus on its new strategy centered around "beauty and social" as of April 30, 2019[158]. Future Outlook - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in user acquisition in the region by the end of 2021[168]. - New product launches are expected to contribute an additional HKD 300 million in revenue for the second half of 2020[171]. - The company is investing HKD 200 million in research and development for new technologies aimed at enhancing user engagement[171]. - A strategic partnership with a leading tech firm is anticipated to enhance the company's service offerings and increase market share by 10%[171]. - The company has set a performance guidance of HKD 2.5 billion in revenue for the full year 2020, reflecting a cautious outlook due to market conditions[171].