Financial Performance - In 2024, net profit attributable to equity holders increased by 112.8% to approximately RMB 806.16 million, while adjusted net profit rose by 59.2% to approximately RMB 586.17 million[12]. - Total revenue for 2024 reached RMB 3.34 billion, representing a year-on-year growth of 23.9%, driven by a 57.1% increase in revenue from image and design products to RMB 2.09 billion[13]. - Operating profit before tax for the year was RMB 822.85 million, compared to RMB 438.09 million in 2023[27]. - The company reported a net profit of RMB 806.16 million for the year, up from RMB 366.42 million in 2023[27]. - Adjusted net profit for the fiscal year ending December 31, 2024, increased to RMB 806.2 million, compared to RMB 366.4 million in the previous year, driven by strong growth in core business and cryptocurrency sales[51]. - Adjusted net profit attributable to equity holders of the parent for the fiscal year ending December 31, 2024, was RMB 586.2 million, up from RMB 368.3 million in the previous year, reflecting growth in high-margin core business[53]. User Engagement - Monthly Active Users (MAU) reached approximately 266.82 million by December 2024, a 6.7% increase year-on-year, with MAU from markets outside mainland China growing by 21.7% to 94.51 million[12]. - The number of monthly active users (MAU) outside mainland China grew by 22% year-on-year to 94.51 million, accounting for 36% of total MAU[21]. - The AI video editing tool Wink achieved a MAU of approximately 30 million within two years of its launch[20]. - The AI-driven Meitu Design Studio's paid subscription users reached 1.13 million as of December 31, 2024, up from 870,000 in 2023[22]. Revenue Breakdown - Revenue from AI-driven productivity tools, specifically Meitu Design Studio, doubled year-on-year to approximately RMB 200 million in 2024[12]. - Revenue from advertising increased by 12.5% to RMB 853.47 million, while revenue from beauty solutions decreased by 32.4% to RMB 384.57 million[13]. - Revenue from image and design products accounted for 62.4% of total revenue in 2024, up from 49.2% in 2023[31]. - The advertising business saw a revenue increase of 12.5% year-on-year, totaling RMB 853.5 million for the year ending December 31, 2024, compared to RMB 758.8 million for the previous year[38]. Cost and Expenses - The overall gross margin improved to 68.7%, up 7.2 percentage points from the previous year, due to the increasing contribution of high-margin image and design products[13]. - Operating costs increased to RMB 1.0466 billion, a 0.6% rise from RMB 1.0399 billion, with the largest cost being paid channel sharing, which grew by 46.4% to approximately RMB 430 million[40]. - Sales and marketing expenses rose by 12.9% year-on-year to RMB 483.4 million, driven by increased marketing spending for imaging and design products domestically and internationally[44]. - Research and development expenses increased by 43.3% year-on-year to RMB 910.7 million, primarily due to costs associated with generative AI training[43]. Strategic Investments and Acquisitions - The company agreed to acquire all issued shares of Zcool for a total consideration of up to $39.64 million, with part of the payment being in shares and the remainder in cash[85]. - The completion of the Zcool acquisition occurred on March 27, 2024, making Zcool an indirect wholly-owned subsidiary, with its financial performance consolidated into the group's financial statements[87]. - The company plans to continue seeking strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[83]. Cryptocurrency and Financial Assets - The company recognized an impairment loss reversal of RMB 68.1 million for purchased cryptocurrencies, specifically Bitcoin, for the fiscal year ending December 31, 2024[46]. - Total cash proceeds from the sale of approximately 31,000 units of Ethereum and 940 units of Bitcoin amounted to approximately USD 100 million and USD 80 million, respectively, resulting in a profit of USD 79.63 million (approximately RMB 571 million)[46]. - The company held approximately 31,000 units of Ethereum and 940 units of Bitcoin, selling them for total proceeds of approximately $100 million and $80 million respectively, representing about 10.20% and 8.16% of total assets as of December 31, 2024[77]. Dividends and Shareholder Returns - The proposed final dividend for the year ended December 31, 2024, is HKD 0.0552 per share, totaling approximately HKD 251.8 million (equivalent to about RMB 234.2 million), up from HKD 0.036 per share in 2023[66]. - The company plans to distribute a special dividend of HKD 0.109 per share, amounting to approximately HKD 496.8 million (equivalent to about RMB 458.6 million), subject to shareholder approval at the special general meeting on February 11, 2025[115]. - The company will use 80% of the net proceeds from cryptocurrency sales for special dividends to shareholders, with the remaining funds allocated for general operating expenses[77]. Employee and Management Information - The company employed 2,416 full-time employees as of December 31, 2024, an increase from 1,968 employees in 2023, representing a growth of approximately 22.7%[73]. - The company’s executive director and CEO received a discretionary bonus totaling RMB 1,923,000 for the year ending December 31, 2024[128]. Share Options and Incentive Plans - The total number of shares available for the pre-IPO employee stock option plan is limited to 116,959,070 shares, with 12,051,469 shares of unexercised options granted to eligible participants as of December 31, 2024[132]. - The company has adopted a post-IPO stock option plan, which was terminated at the shareholders' annual general meeting on June 5, 2024, with no further options to be presented or granted under this plan[141]. - The 2024 Share Award Plan was adopted based on the resolution passed at the company's annual general meeting on June 5, 2024[165]. - A total of 33,035,856 shares were granted under the 2024 share incentive plan, with 4,500,000 shares allocated to the chairman and key executives[180].

Core Viewpoint - The report from CICC indicates an upward revision of Meitu's revenue forecast for 2025 by 2% to 4.3 billion yuan, driven by better-than-expected growth in paid users and subscription business, with adjusted net profit forecast maintained at 850 million yuan [1] Group 1: Subscription Revenue Growth - The company expects a more than 40% year-on-year increase in subscription revenue for 2025, driven by both payment rate and user growth [2] - The domestic life scenario payment penetration rate is projected to reach 5.2% by February, surpassing the previous target of 5%, largely due to generative AI enhancing traditional functions [2] - The company aims to maintain a long-term subscription penetration rate target of 10% for life products, supported by user retention strategies [2] Group 2: Overseas Market Expansion - The user base for overseas life scenarios is accelerating, with stable MAU for Airbrush and BeautyPlus in the US and Europe, and significant growth in Southeast Asia for AI dressing features [3] - The company anticipates that the payment rate for Airbrush will be significantly higher than in the domestic market by 2024, with other overseas products still in the expansion phase [3] Group 3: Productivity Scene Revenue Contribution - The number of paid subscribers for Meitu Design Studio is expected to reach 1.13 million in 2024, contributing to a revenue increase to 200 million yuan, doubling year-on-year [4] - The company plans to focus on enhancing product capabilities in core e-commerce sectors, with an expected 2 percentage point increase in domestic product penetration over the next two years [4] - The company is optimistic about the overseas productivity market and has launched two new productivity tools, Vmake and X-design, while monitoring user growth [4]

美图公司 20250318 摘要 Q&A 美图公司在 2024 年的财务表现如何？ 美图公司在 2024 年整体收入按年增加 23.9%，达到人民币 33.4 亿元。影像与 设计产品的全年收入增长 57.1%，达到人民币 20.9 亿元。广告收入同比增长 12.5%至人民币 8.5 亿元，增幅主要来自程序化广告。履约解决方案方面，全年 收入同比下降 32.4%至人民币 3.81 亿元。毛利总额为 22.9 亿人民币，同比上 • 美图公司 2024 年总收入达人民币 33.3 亿元，同比增长 29.3%，主要得益 于影像与设计产品业务的强劲增长，特别是程序化广告收入的显著提升， 但履约解决方案收入同比下降 32.4%至人民币 3.81 亿元。 • 截至 2024 年 12 月，美图公司月活跃用户同比增长 6.7%至 2.66 亿，海外 市场增长尤为显著，同比增长 21.7%至 9,451 万。付费订阅用户数达 1,261 万，会员渗透率超 4.7%，美颜相机全球 MAU 突破 7,200 万。 • 美图公司积极拓展全球市场，影像产品多次荣登多国 App Store 及 Google Play 榜首。美颜相机 A ...

Financial Performance - In 2024, net profit and adjusted net profit increased by 112.8% and 59.2% year-on-year, respectively, with overall gross margin improving to 68.7% from 61.4%[5][10] - Revenue for the year was RMB 3.34 billion, a 23.9% increase from RMB 2.70 billion in 2023, driven by a 57.1% increase in revenue from imaging and design products[6][10] - The gross profit for the year was RMB 2.29 billion, reflecting a 38.5% increase from RMB 1.66 billion in 2023[6] - The net profit for the year reached RMB 806.16 million, significantly up from RMB 366.42 million in 2023[17] - Total revenue for the year ended December 31, 2024, was RMB 3,340,761, an increase of 24% from RMB 2,695,738 in 2023[82] - Gross profit for 2024 was RMB 2,294,211, representing a gross margin of approximately 68.7% compared to 61.4% in 2023[82] - Basic earnings per share for 2024 was RMB 0.18, up from RMB 0.09 in 2023, indicating a 100% increase[82] User Growth and Engagement - Monthly active users (MAU) reached approximately 266 million, a year-on-year increase of 6.7%, with MAU outside mainland China growing by 21.7% to 94.5 million, accounting for 35.6% of total MAU[5][8][10] - The AI video editing tool Wink achieved MAU growth from 0 to approximately 30 million within two years, demonstrating successful product launch strategies[13] - The MAU for the video editing app Wink surpassed 30 million by the end of December 2024, making it the third-largest application in the company's product matrix[24] - Monthly Active Users (MAU) outside mainland China grew by 22% year-on-year to 94.51 million, accounting for 36% of total MAU[14] Product and Service Development - The AI-driven productivity tool, Meitu Design Studio, generated approximately RMB 200 million in revenue, doubling year-on-year[5] - The company plans to maintain its focus on integrating art and technology, with ongoing investments in imaging R&D to enhance engineering capabilities[11] - The "AI hairstyle" feature of Meitu Xiuxiu gained significant popularity in Indonesia, leading to a rapid rollout strategy across Southeast Asia[13] - The revenue from image and design products grew by 57.1% year-on-year, reaching RMB 2,085.62 million, up from RMB 1,327.38 million in 2023[21] - The AI-driven productivity tool, Meitu Design Studio, achieved 1.13 million paid subscribers by December 31, 2024, doubling its revenue year-on-year[15] Financial Management and Investments - The company continues to invest in AI and R&D, with total expenses growing at a significantly lower rate than gross profit, enhancing operational leverage[10] - The company plans to expand its product offerings in markets outside mainland China, focusing on commercial photography design and video products[15] - The company has made minor investments in technologies or businesses that are believed to complement its operations, although these investments are not considered significant[56] - The company plans to continue seeking strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[75] Expenses and Cost Management - R&D expenses rose by 43.3% year-on-year to RMB 910.7 million, primarily due to increased costs related to generative AI training[36] - Sales and marketing expenses increased by 12.9% year-on-year to RMB 483.4 million, driven by marketing expenditures for image and design products[37] - Administrative expenses increased by 32.9% year-on-year to RMB 399.9 million, largely due to personnel costs from the acquisition of Zcool Group[38] Cash Flow and Liquidity - Cash and cash equivalents as of December 31, 2024, totaled RMB 1,301.41 million, significantly up from RMB 640.63 million as of December 31, 2023[51] - Total current financial resources, including cash and short-term investments, amounted to RMB 2,998.85 million as of December 31, 2024, compared to RMB 1,404.44 million as of December 31, 2023[51] - The company maintained a healthy liquidity position as of December 31, 2024, with a focus on prudent financial management to meet funding needs[52] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.0552 per share for the year ending December 31, 2024, totaling approximately HKD 251.7 million (about RMB 232.3 million), with a payout ratio of approximately 40% based on adjusted net profit attributable to equity holders[61] - The company plans to distribute a special dividend of HKD 0.109 per share, totaling approximately HKD 496.8 million, following the sale of cryptocurrencies[80] Corporate Governance and Compliance - The company emphasizes strict corporate governance, ensuring transparency and accountability in its operations[146] - The audit committee reviewed the annual performance announcement and the audited financial statements for the year ending December 31, 2024, confirming compliance with applicable accounting standards[149] - The company has adopted a code of conduct for directors regarding securities trading, ensuring compliance throughout the year ending December 31, 2024[147] Strategic Acquisitions - The company completed the acquisition of Zcool Network Technology Limited on March 27, 2024, for a total consideration of up to USD 39,640,495 (approximately HKD 309,905,426)[78] - The acquisition included 119,158,806 shares of common stock and various series of preferred shares, enhancing the company's market position[78] Risks and Challenges - The company has faced foreign exchange risks primarily due to transactions in RMB and USD, with no hedging against currency fluctuations as of December 31, 2024[58] - The company has no significant contingent liabilities as of December 31, 2024, maintaining a stable financial position[60]

Key Points Industry/Company 1. **Company Mentioned**: Meitu Inc. [1] Core Views and Arguments 2. **No Unauthorized Content Sharing**: Meitu explicitly states that no media is authorized to forward the content of this meeting. Unauthorized redistribution is considered infringement, and Meitu reserves the right to pursue legal action. Meitu does not assume any losses or responsibilities arising from redistribution. [1] Other Important Content 3. **Legal Notice**: The document emphasizes the legal implications of unauthorized sharing, highlighting the company's commitment to protecting its intellectual property. [1]

Financial Performance - As of June 30, 2024, the net profit attributable to equity holders was approximately RMB 272.8 million, representing an 80.3% year-over-year increase[10]. - The total revenue for the six months ended June 30, 2024, was RMB 1.621 billion, a 28.6% increase compared to RMB 1.261 billion for the same period in 2023[10]. - Adjusted net profit attributable to equity holders for the six months ended June 30, 2024, was approximately RMB 272.8 million, representing a year-on-year increase of about 80.3%[16]. - Total revenue for the same period reached approximately RMB 1.621 billion, reflecting a year-on-year growth of about 28.6%[20]. - The company reported a profit of RMB 303,721 thousand for the six months ended June 30, 2024, compared to RMB 209,469 thousand for the same period in 2023, representing an increase of approximately 44.9%[103]. - The company reported a total comprehensive income for the six months ended June 30, 2024, of RMB 304,986 thousand, including a profit of RMB 303,428 thousand[109]. - The company’s total equity increased to RMB 4,462,766 thousand from RMB 4,113,700 thousand, representing a growth of about 8.5%[107]. User Engagement - Monthly active users reached approximately 257.7 million, a 4.3% increase from 247.1 million in the same period last year[11]. - The monthly active users of the AI video editing application Wink grew by approximately 99% year-over-year, becoming the third-largest application in the product matrix[8]. - The productivity segment saw a 42.0% increase in monthly active users, reaching 19.2 million compared to 13.5 million in the same period last year[11]. - Monthly active users grew by approximately 4.3% year-on-year to 258 million as of June 30, 2024, an increase from about 2.6% as of December 31, 2023[16]. Revenue Breakdown - Revenue from imaging and design products was RMB 930.6 million, reflecting a significant 54.5% growth year-over-year[10]. - Revenue from advertising increased by 18.3% to RMB 412.9 million compared to RMB 349.2 million in the previous year[10]. - Revenue from beauty solutions decreased by 5.5% to RMB 270.6 million, down from RMB 286.4 million in the previous year[10]. - Revenue from image and design products accounted for 57.4% of total revenue, increasing from 47.8% in the previous year[19]. - Revenue from advertising constituted 25.5% of total revenue, compared to 27.7% in the previous year[19]. - Revenue from beauty solutions, primarily from cosmetics and smart hardware sales, was RMB 258,559,000, down from RMB 273,914,000 in the previous year[144]. Cost and Expenses - The gross profit margin improved to 64.9%, up by 5.1 percentage points from 59.8% in the previous year[10]. - Operating costs rose to RMB 568.5 million for the six months ended June 30, 2024, a 12.2% increase from RMB 506.9 million for the same period in 2023[27]. - Research and development expenses increased by 44.5% to approximately RMB 425.3 million for the six months ended June 30, 2024, compared to approximately RMB 294.3 million for the same period in 2023[30]. - The total operating costs, including sales and marketing expenses, administrative expenses, and R&D expenses, amounted to RMB 1,376,368,000, up from RMB 1,166,827,000, indicating an increase of about 18.0%[147]. Investments and Acquisitions - The company successfully completed the acquisition of Zcool Group in the first half of 2024, launching a new online service platform for freelance designers shortly thereafter[16]. - The company completed the acquisition of a leading visual creative community, which is expected to enhance the synergy with its imaging and design products[23]. - Meitu Investment has agreed to acquire all issued shares of Zcool, totaling 119,158,806 ordinary shares and various series of preferred shares, for a total consideration of $39,640,495 (approximately HKD 309,905,426)[58]. - The acquisition of Zcool was completed on March 27, 2024, making Zcool an indirect wholly-owned subsidiary of the company, with its financial performance consolidated into the group's financial statements[59]. Financial Position and Liquidity - Cash and cash equivalents as of June 30, 2024, were RMB 351.5 million, down from RMB 640.6 million as of December 31, 2023[42]. - The company maintained a healthy liquidity position, with total liquid financial resources of RMB 1.3 billion as of June 30, 2024, compared to RMB 1.4 billion as of December 31, 2023[42]. - The company’s total liabilities increased to RMB 1,938,317 thousand from RMB 1,653,486 thousand, indicating a rise of approximately 17.3%[107]. - The company’s cash flow from operating activities remains a critical area for future focus, as the net cash outflow from financing activities suggests potential liquidity concerns[115]. Shareholder and Equity Information - As of June 30, 2024, the company had a total of 4,535,096,084 shares issued, with significant shareholders holding substantial stakes, including Cai Wensheng with 1,068,100,000 shares (23.55%)[64]. - The employee stock option plan, which was approved prior to the IPO, has a total limit of 116,959,070 shares, with 12,435,144 shares of options granted but not yet exercised as of June 30, 2024[66]. - The company approved a final dividend of RMB 148,827,000, with RMB 146,085,000 paid for the six months ending June 30, 2024, compared to RMB 81,395,000 for the same period in 2023[163]. Financial Risks and Management - The company has not hedged any foreign currency fluctuations as of June 30, 2024, exposing it to foreign exchange risks primarily from its subsidiaries in China and Hong Kong[47]. - The company’s financial risk management policies have remained unchanged since year-end, addressing market, credit, and liquidity risks[126]. - The company continues to monitor the performance of its cryptocurrency investments and will reassess its investment strategy in response to market conditions[54]. Future Outlook - The company anticipates that the growth in subscription penetration will support strong revenue growth in the second half of the year[14]. - The company is actively exploring market expansion opportunities, particularly in the imaging and design product sectors, to drive future revenue growth[118]. - Future financial performance will be closely tied to the successful implementation of new strategies and the management of cash flow dynamics[118].

Financial Performance - For the six months ended June 30, 2024, the adjusted net profit attributable to equity holders of the parent company was approximately RMB 272.8 million, representing a year-on-year increase of 80.3%[3]. - Revenue for the same period grew by approximately 28.6% to about RMB 1.621 billion, compared to RMB 1.261 billion in the previous year[5]. - Total revenue for the six months ended June 30, 2024, increased by approximately 28.6% to RMB 1,621,159,000 compared to RMB 1,260,881,000 for the same period in 2023[13]. - The net profit for the six months ended June 30, 2024, increased to RMB 303.7 million, compared to RMB 209.5 million for the same period in 2023[30]. - Adjusted net profit attributable to equity holders increased to RMB 272,800,000, compared to RMB 151,296,000 in the previous year[11]. - The adjusted profit for the six months ended June 30, 2024, was RMB 273,778,000, compared to RMB 135,251,000 for the same period in 2023, representing a significant increase[31]. - Earnings per share for the period was RMB 0.07, compared to RMB 0.05 for the same period in 2023, showing an increase in shareholder value[48]. - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.07, up from RMB 0.05 in the same period of 2023, reflecting a growth of 40%[70]. - Diluted earnings per share for the six months ended June 30, 2024, was RMB 0.06, compared to RMB 0.05 for the same period in 2023, indicating a 20% increase[72]. User Growth and Engagement - The total monthly active users reached approximately 258 million, a year-on-year increase of 4.3%, with significant growth from regions outside mainland China, which accounted for about 32.9% of total users[6]. - The AI-driven video editing application Wink saw its monthly active users increase by approximately 99% year-on-year, becoming the third-largest application in the company's product matrix[8]. - Monthly active users in the productivity segment increased by 42.0% year-on-year, indicating strong demand for productivity-focused applications[6]. - The number of paid subscription users for the application exceeded 10.81 million, with a subscription penetration rate of approximately 4.2% as of June 30, 2024[14]. Revenue Breakdown - Revenue from image and design products increased by 54.5% year-on-year, while revenue from beauty solutions and advertising grew by 18.3%[5]. - Revenue from image and design products grew by about 54.5% to RMB 930,573,000, accounting for 57.4% of total revenue[14]. - Revenue from beauty industry solutions decreased by 5.5% to RMB 270,574,000, reflecting a cautious outlook for future growth in this non-core business[17]. - The revenue from advertising reached RMB 412,914,000, representing 25.5% of total revenue, up from 27.7% in the previous year[13]. - Advertising revenue increased by 18.3% year-on-year to RMB 412.9 million for the six months ended June 30, 2024, compared to RMB 349.2 million for the same period in 2023[18]. - Programmatic advertising revenue grew by 45% year-on-year, contributing significantly to overall advertising growth[18]. - Global advertising revenue (excluding mainland China) surged by 129% year-on-year due to successful product globalization efforts[18]. Costs and Expenses - Operating costs rose to RMB 568.5 million, an increase of 12.2% from RMB 506.9 million for the same period last year[20]. - Research and development expenses increased by 44.5% to approximately RMB 425.3 million, primarily due to rising costs associated with generative AI training[22]. - Sales and marketing expenses decreased by 7.5% to approximately RMB 205 million, attributed to a reduction in related personnel costs[23]. - The company’s total operating costs, sales and marketing expenses, administrative expenses, and R&D expenses totaled RMB 1,376,368,000 for the six months ended June 30, 2024, compared to RMB 1,166,827,000 in 2023, an increase of approximately 18.0%[63]. Acquisitions and Strategic Developments - The company successfully completed the acquisition of Zcool Network Technology Limited in the first half of 2024, enhancing its capabilities in generative AI tools[8]. - The company completed the acquisition of the leading visual creative community, Zcool, enhancing its ecosystem in the image sector[16]. - The company launched and upgraded six productivity tools during the third Meitu Image Festival, expanding its product matrix[15]. - The productivity tool X-Design was launched in markets including the United States, Canada, Australia, and the United Kingdom, expanding the company's global footprint[8]. - The company plans to seek strategic investment opportunities to enhance synergies in technology development and product portfolio expansion[44]. Financial Position and Assets - Cash and cash equivalents as of June 30, 2024, totaled RMB 351,504,000, down from RMB 640,629,000 as of December 31, 2023, indicating a decrease of approximately 45%[33]. - The company’s cash and other liquid financial resources totaled RMB 1,298,503,000 as of June 30, 2024, down from RMB 1,404,438,000 at the end of 2023[33]. - The company reported a total of 2,285 full-time employees as of June 30, 2024, compared to 2,212 employees a year earlier, indicating a growth in workforce[41]. - The company’s total equity rose to RMB 4,462,766 thousand as of June 30, 2024, up from RMB 4,113,700 thousand as of December 31, 2023, reflecting an increase of approximately 8.5%[51]. - The total assets increased to RMB 6,401,083 thousand from RMB 5,767,186 thousand as of December 31, 2023, representing a growth of approximately 11%[50]. - The total liabilities increased to RMB 1,938,317 thousand as of June 30, 2024, compared to RMB 1,653,486 thousand as of December 31, 2023, marking an increase of about 17.3%[51]. - The company’s accumulated losses improved to RMB (2,765,690) thousand as of June 30, 2024, from RMB (3,069,118) thousand as of December 31, 2023, showing a reduction of approximately 9.9%[51]. Cryptocurrency and Impairment - The company recognized a reversal of impairment losses on purchased cryptocurrencies amounting to approximately RMB 68.1 million[25]. - The company incurred a loss of RMB 68,145,000 from cryptocurrency impairment during the six months ended June 30, 2024, compared to a loss of RMB 185,563,000 in the same period in 2023[31]. - The company recognized an impairment loss of RMB 68,145,000 for the six months ended June 30, 2024, compared to an impairment reversal of RMB 185,563,000 for the same period in 2023[85]. - The company held approximately 31,000 units of Ethereum and 940.4970 units of Bitcoin, with a fair value of approximately USD 10.521 million and USD 5.795 million, respectively, as of June 30, 2024[42]. - The total cost of cryptocurrencies held by the company amounts to RMB 712,680,000, with Ethereum at RMB 360,018,000 and Bitcoin at RMB 352,662,000[85]. Corporate Governance and Compliance - The company has complied with the corporate governance code, except for the separation of the roles of Chairman and CEO, which the board believes is appropriate under current circumstances[97]. - The audit committee has reviewed the unaudited interim financial statements for the six months ending June 30, 2024, and believes they fairly present the financial position and performance of the group[100]. - The company has adopted the standard code for securities trading by directors and confirmed compliance by all directors for the six months ending June 30, 2024[98]. - The board does not recommend the distribution of an interim dividend for the six months ending June 30, 2024[101]. Forward-Looking Statements - The announcement includes forward-looking statements regarding the group's business outlook and financial performance estimates[104]. - The forward-looking statements are based on existing data and assumptions at the time of the announcement[104]. - There are risks and uncertainties associated with the forward-looking statements, which may not be realized in the future[104]. - Shareholders and potential investors are advised not to overly rely on the forward-looking statements provided[104].

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

Financial Performance - Adjusted net profit attributable to parent company equity holders reached approximately RMB 370 million, a year-on-year increase of 233.2%[3] - Total revenue increased by 29.3% year-on-year to approximately RMB 2.7 billion[3] - Adjusted net profit attributable to equity holders of the parent company reached RMB 368.3 million, a year-on-year increase of 233.2%[8] - Total revenue for 2023 was RMB 2,695.7 million, up 29.3% year-on-year[8] - Gross profit for 2023 was RMB 1,655.9 million, compared to RMB 1,187.3 million in 2022[12] - Net profit for the year was RMB 366.4 million, compared to RMB 18.9 million in 2022[12] - Total revenue for the fiscal year ending December 31, 2023, increased by 29.3% to approximately RMB 2,695.7 million, compared to RMB 2,085.3 million in 2022[13] - Revenue increased to RMB 2,695,738 thousand in 2023, up 29.3% from RMB 2,085,329 thousand in 2022[63] - Gross profit rose to RMB 1,655,876 thousand in 2023, a 39.5% increase from RMB 1,187,272 thousand in 2022[63] - Net profit attributable to owners of the parent company surged to RMB 378,293 thousand in 2023, compared to RMB 94,142 thousand in 2022[63] - Total revenue for 2023 reached RMB 2,695,738 thousand, a 29.3% increase from RMB 2,085,329 thousand in 2022[75] User Growth and Engagement - Monthly active users (MAU) reached approximately 250 million, a year-on-year increase of 2.6%[3] - Paid subscription users increased by 62.3% year-on-year to 9.11 million[3] - MAU for productivity applications increased by 74.3% year-on-year to 17.66 million[6] - The company's app had over 9.11 million paid subscribers by the end of 2023, with a paid penetration rate of 3.7%, a 62.3% increase from 2022[15] AI and Technology - Approximately 83% of the billions of images and videos processed daily by users utilize AI features[3] - The company plans to launch more generative AI features for image and video scenarios in 2024[3] - Strategic collaboration with Zcool to enhance the market influence of visual designers and build an ecosystem around generative AI[3] - Approximately 83% of content processed daily by users is powered by AI[8] - The AI-generated product images feature in Meitu Design Studio has generated over 130 million AI product images by the end of February 2024[16] - R&D expenses increased to RMB 635.5 million in 2023 from RMB 586.4 million in 2022[12] - R&D expenses increased by 8.4% year-on-year to approximately RMB 635.5 million in 2023, primarily due to increased investment in AI-related technologies[25] - Research and development expenses increased to RMB 635,484 thousand in 2023, up 8.4% from RMB 586,365 thousand in 2022[63] Product and Service Revenue - Revenue from imaging and design products increased by 52.8% year-on-year to RMB 1.33 billion[4] - Revenue from Imaging and Design Products grew by 52.8% to RMB 1,327.4 million, accounting for 49.2% of total revenue[14][15] - Revenue from image and design products outside mainland China accounted for over 50% of the total revenue in 2023[10] - Revenue from Imaging and Design Products grew significantly to RMB 1,327,384 thousand in 2023, up 52.8% from RMB 868,763 thousand in 2022[75] - Revenue from Beauty Solutions increased by 29.1% to RMB 569.2 million, driven by growth in cosmetics supply chain management services[19] - Beauty Solutions revenue rose to RMB 569,158 thousand in 2023, a 29.1% increase from RMB 441,007 thousand in 2022, driven by sales of cosmetics and smart hardware products totaling RMB 544,002 thousand[76] - Advertising revenue increased by 20.5% year-on-year to approximately RMB 758.8 million in 2023, compared to RMB 629.9 million in 2022[21] - Advertising revenue increased to RMB 758,790 thousand in 2023, a 20.5% rise from RMB 629,902 thousand in 2022[75] Acquisitions and Investments - Meitu acquired Zcool Network Technology Limited, which has over 17 million registered users and operates China's largest copyright image and video trading platform[10] - The company acquired Zcool in February 2024 to enhance its imaging and design ecosystem[16] - Meitu Investment agreed to acquire Zcool Group for a total consideration of $39.64 million (approximately HKD 309.91 million), including 119,158,806 ordinary shares and various series of preferred shares[61] - As part of the Zcool acquisition, all outstanding options under the Zcool ESOP plan will be canceled, with a total settlement of $2.14 million (approximately HKD 16.75 million) to be paid to option holders[62] - Upon completion of the Zcool acquisition, Zcool will become an indirect wholly-owned subsidiary of the company, and its financial performance will be consolidated into the group's financial statements[62] - The company agreed to acquire Zcool Network Technology Limited for USD 39.64 million (approximately RMB 281,410 thousand), with USD 17.784 million paid in shares and the remainder in cash[110] - The company completed the acquisition of Ruicheng Tianhe, making it a wholly-owned subsidiary, following the triggering of a buyback clause due to the failure to meet listing requirements[54][55] - The company sold approximately 20% of its stake in Dajie Net for $1.00, reducing its ownership from 58.98% to 38.98% and no longer consolidating Dajie Net's financials[56] - Pixocial completed a Series A equity financing round totaling $22 million, with investors including Eight Roads, FutureX A7, FutureX ICT, and the company itself subscribing to 19,734,483 Series A preferred shares[58] - Post-financing, the company's ownership in Pixocial decreased from 100% to approximately 80.62% on a fully diluted basis[59] - Pixocial adopted an equity incentive plan (Pixocial Option Plan) reserving 7,642,626 ordinary shares for employees, directors, and consultants, with 1,910,657 options granted to key executives[59] - The company sold 20% of its stake in subsidiary Dajie Net Investment Holdings Ltd. for $1 (approximately RMB 7), reducing its ownership from 58.98% to 38.98% and losing control over Dajie Net[112] - Dajie Net's net liabilities increased to RMB 111,340,000 due to debt forgiveness by the company prior to the sale, resulting in a dilution of the company's interest[112] Costs and Expenses - Operating costs increased by 15.8% year-on-year to approximately RMB 1,039.9 million in 2023, driven by higher cloud computing fees and expanded cosmetic supply chain services[23] - Sales and marketing expenses increased by 6.2% year-on-year to approximately RMB 428.2 million in 2023, driven by overseas expansion of the image subscription business[26] - Administrative expenses increased by 10.7% year-on-year to approximately RMB 300.9 million in 2023, mainly due to higher employee costs and professional service fees[27] - Employee benefits expenses remained stable at RMB 909,516 thousand in 2023, slightly down from RMB 911,949 thousand in 2022[78] - Inventory consumption and cost of sales increased to RMB 513,059 thousand in 2023, up 27.6% from RMB 402,058 thousand in 2022[78] - Income tax expense decreased to RMB 71,667 thousand in 2023, down 54.2% from RMB 156,339 thousand in 2022[79] Assets and Liabilities - Total assets grew to RMB 5,767,186 thousand in 2023, up 15.2% from RMB 5,004,348 thousand in 2022[65] - Total liabilities rose to RMB 1,653,486 thousand in 2023, a 27.7% increase from RMB 1,294,834 thousand in 2022[66] - Intangible assets grew to RMB 775,754 thousand in 2023, a 17.6% increase from RMB 659,841 thousand in 2022[65] - Contract liabilities increased to RMB 423,585 thousand in 2023, up 72.7% from RMB 245,243 thousand in 2022[66] - Total assets increased to RMB 1,404,424,000 as of December 31, 2023, up from RMB 1,195,064,000 in 2022, driven by acquisitions and fair value changes[89] - Fair value changes of financial assets resulted in a loss of RMB 73,531,000 in 2023, compared to a gain of RMB 519,821,000 in 2022[90] - Trade receivables increased to RMB 406,520,000 in 2023 from RMB 364,503,000 in 2022, with 94% of receivables aged within 6 months[92][93] - Cash and cash equivalents decreased to RMB 640,629,000 in 2023 from RMB 946,602,000 in 2022, primarily due to reduced bank deposits[94] - Restricted cash remained stable at RMB 300,000 in both 2023 and 2022, held as collateral for operational payments[95] - The company's bank borrowings increased to RMB 149.8 million with an annualized interest rate of 3.77% as of December 31, 2023, compared to RMB 100 million with a rate of 3.68% in 2022[49] - The company's asset-to-liability ratio slightly increased to 0.36% as of December 31, 2023, from 0.30% in 2022[49] - The company holds approximately 31,000 units of Ethereum and 940.4970 units of Bitcoin, with a fair value of $71.23 million and $39.91 million, respectively, as of December 31, 2023[51] - The company owns a 23.81% stake in Shenzhen Hujia Technology Co., Ltd., with a registered capital of RMB 1.4 million[52] - The company's non-current assets in China as of December 31, 2023, amounted to RMB 686,934,000, a decrease from RMB 766,420,000 in 2022[74] - Non-current assets in other countries or regions as of December 31, 2023, were RMB 648,706,000, up from RMB 368,173,000 in 2022[74] Dividends and Shareholder Information - The company proposed a final dividend of HKD 0.036 per share for 2023, totaling approximately HKD 161.2 million[46] - The company's dividend payout ratio for 2023 was approximately 40.2% based on adjusted net profit attributable to equity holders of the parent company[46] - The company declared a final dividend of RMB 81,395 thousand for the year ended December 31, 2023, and proposed a final dividend of RMB 146,256.3 thousand for the same period, pending shareholder approval[102] - The company's annual general meeting is scheduled for June 5, 2024, with a notice to be issued and distributed to shareholders in accordance with listing rules[119] - The company will suspend share transfer registration from May 30 to June 5, 2024, to determine the list of shareholders entitled to attend and vote at the annual general meeting[119] - The company will suspend share transfer registration from June 12 to June 14, 2024, to determine shareholders eligible to receive the final dividend, subject to approval at the annual general meeting[120] - The company's annual results announcement and annual report for the year ended December 31, 2023, will be published on the Hong Kong Stock Exchange and company websites and distributed to shareholders[121] Corporate Governance and Leadership - Cai Wensheng resigned as executive director and chairman on June 1, 2023, to focus on personal business commitments, with the company expressing gratitude for his contributions[122] - The company's executive directors include Mr. Wu Zeyuan (also known as Mr. Wu Xinhong)[123] - Non-executive directors include Dr. Guo Yihong, Dr. Kai-Fu Lee, Mr. Chen Jiarong, and Mr. Hong Yupeng[123] - Independent non-executive directors include Mr. Zhou Hao, Mr. Lai Xiaoling, and Ms. Kui Yingchun[123] - The announcement contains forward-looking statements regarding the company's business outlook, financial performance estimates, and development strategies[123] - These forward-looking statements are based on current information and assumptions, which may involve subjective factors or factors beyond the company's control[123] - The forward-looking statements involve risks and uncertainties, and shareholders and potential investors should not overly rely on them[123] Other Financial Information - Other income decreased by 72.3% year-on-year to approximately RMB 40.4 million in 2023, down from RMB 145.7 million in 2022, due to the sale of the IMS business[22] - Impairment losses on cryptocurrencies were reversed by approximately RMB 270 million in 2023, with RMB 170 million for Bitcoin and RMB 94.8 million for Ethereum[28] - Intangible asset impairment losses amounted to approximately RMB 155.3 million in 2023, related to goodwill impairment in the beauty solutions segment[29] - Total cash and cash equivalents decreased to RMB 640,629 thousand in 2023 from RMB 946,602 thousand in 2022[38] - Adjusted net profit attributable to equity holders of the parent company increased to RMB 368,297 thousand in 2023 from RMB 110,543 thousand in 2022[36] - Capital expenditures for property and equipment decreased to RMB 47,363 thousand in 2023 from RMB 65,231 thousand in 2022[42] - Total investments in financial assets measured at fair value through profit or loss increased to RMB 344,942 thousand in 2023 from RMB 98,321 thousand in 2022[43] - The company's cash and other liquid financial resources remained stable at RMB 1,404,438 thousand in 2023 compared to RMB 1,390,031 thousand in 2022[38] - The company did not hedge any foreign currency fluctuations during 2023 and 2022[44] - The company's restricted deposits for operational expenses remained unchanged at RMB 300,000 thousand in 2023[45] - The company's share premium account balance was approximately RMB 7,093.8 million as of December 31, 2023[47] - The company's statutory share capital consists of 6,000,000,000 ordinary shares with a par value of USD 0.00001 each as of December 31, 2023[96] - Trade and other payables totaled RMB 735,209 thousand as of December 31, 2023, compared to RMB 734,098 thousand in 2022, with a significant increase in platform payments for agency services to RMB 244,876 thousand from RMB 80,984 thousand[100] - Trade payables aged within 6 months amounted to RMB 98,990 thousand as of December 31, 2023, slightly up from RMB 96,170 thousand in 2022[101] - Pixocial Holdings Ltd issued 17,043,417 Series A redeemable convertible preferred shares at USD 1.1148 per share, totaling USD 19 million (approximately RMB 134,571 thousand) on December 1, 2023[103] - Series A preferred shareholders are entitled to a special dividend if Pixocial meets the net profit requirements specified in the shareholder agreement[104] - Series A preferred shares will automatically convert into ordinary shares upon a qualified IPO or as approved by the Pixocial board, with a conversion price based on the then-effective Series A conversion price[105] - Series A preferred shareholders can request redemption if a qualified IPO or sale transaction is not completed within four years of the initial closing date, or under other specified conditions[106] - In the event of liquidation, Series A preferred shareholders have priority over ordinary shareholders to receive distributions equal to 100% of the original issue price plus 8% annual simple interest[107] - The sale of Dajie Net resulted in a net cash outflow of RMB 5,486 thousand after deducting the cash and cash equivalents of Dajie Net[111] - The company fully utilized the net proceeds of approximately HKD 4,988 million from its 2016 IPO, with no changes to the intended use of funds as disclosed in the prospectus[118]

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%[6]. - Total revenue for the same period was RMB 1.26 billion, an increase of 29.8% compared to RMB 971.2 million in 2022[9]. - The gross profit for the first half of 2023 was RMB 754.0 million, with a gross margin of 59.8%, up from 51.8% in the previous year[9]. - The company reported a net profit of RMB 209.5 million for the period, a significant turnaround from a net loss of RMB 281.6 million in the previous year[9]. - Adjusted net profit attributable to equity holders of the parent for the six months ended June 30, 2023, was RMB 151.3 million, compared to RMB 36 million for the same period in 2022[40]. - The total comprehensive income for the six months ended June 30, 2023, was RMB 269,741 thousand, compared to a total comprehensive loss of RMB 223,619 thousand for the same period in 2022, indicating a positive performance shift[96]. - The company reported a profit of RMB 227,627 thousand for the six months ended June 30, 2023, compared to a loss of RMB 266,245 thousand for the same period in 2022, indicating a significant turnaround[96]. Revenue Breakdown - Revenue from image and design products reached RMB 602.2 million, marking a significant growth of 62.2% year-on-year[9]. - Revenue from advertising increased by 28.2% to RMB 349.2 million, compared to RMB 272.5 million in the same period last year[9]. - Revenue from beauty solutions increased by 31.1% to RMB 286,444,000, representing 22.7% of total revenue[24]. - Revenue from imaging and design products grew by 62.2% to RMB 602,190,000, accounting for 47.8% of total revenue[24]. - The total number of paid subscription users for all imaging and design products reached approximately 7.2 million, with a subscription rate of about 2.9%, up from 2.0% a year ago[18]. User Engagement - Monthly active users totaled 247.1 million as of June 30, 2023, reflecting a growth of 1.7% from 242.9 million at the end of 2022[10]. - The number of monthly active users for the Beauty Camera product increased by 6.3% to 52.1 million compared to 49.0 million at the end of 2022[10]. - The number of monthly active users in mainland China grew by 6.3% to 173.4 million, while overseas users decreased by 7.6% to 73.7 million[10]. Expenses and Costs - Research and development expenses increased to RMB 294,264,000, up from RMB 265,487,000 in the previous year[21]. - Operating costs increased to RMB 506.9 million for the six months ended June 30, 2023, up 8.4% from RMB 467.8 million for the same period in 2022, primarily due to increased user demand for AIGC-related services[31]. - Sales and marketing expenses increased to RMB 221.6 million for the six months ended June 30, 2023, up 21.3% from RMB 182.7 million for the same period in 2022[34]. - Administrative expenses were RMB 144.1 million for the six months ended June 30, 2023, a 5.7% increase from RMB 136.3 million in the same period last year[35]. Cash Flow and Liquidity - As of June 30, 2023, cash and cash equivalents amounted to RMB 664,573 thousand, a decrease of 29.8% from RMB 946,602 thousand as of December 31, 2022[44]. - The company has maintained a healthy liquidity position and closely monitors its cash flow to meet funding needs[45]. - The net cash used in investing activities was RMB 300,172 thousand for the six months ended June 30, 2023, contrasting with a net cash generated of RMB 171,629 thousand in the same period of 2022, highlighting increased investment expenditures[98]. - The company aims to maintain sufficient cash and cash equivalents to meet its liquidity needs, reflecting a proactive approach to managing cash flow risks[108]. Investments and Acquisitions - The company plans to seek strategic investment opportunities to enhance synergies in technology development, product research, and market expansion[55]. - Meitu's acquisition of the remaining 19.81% stake in Ruishengtianhe is set to occur by June 30, 2023, with a total cash consideration equivalent to the purchase price[56]. - The company has entered into a share sale agreement to sell 90,276,751 shares, representing approximately 20% of Dajie Net's issued share capital, for a consideration of $1.00[81]. - The company acquired non-controlling interests in subsidiaries, resulting in a payment of RMB 56,245 thousand during the first half of 2023[99]. Shareholder Information - As of June 30, 2023, Meitu's issued shares totaled 4,446,535,488, with significant shareholdings including 12.92% by Mr. Wu Zeyuan and 11.64% by Mr. Chen Jiarong[59]. - Shareholder Cai Wensheng holds 25.34% of the company's shares, while Lion Trust (Singapore) Limited holds 31.45% as a trustee[62]. - The employee stock option plan allows for a total of 116,959,070 shares, with 14,013,342 shares of unexercised options granted as of June 30, 2023[64]. Financial Position - Total assets as of June 30, 2023, amounted to RMB 5,273,906 thousand, an increase from RMB 5,004,348 thousand at the end of 2022[93]. - The total equity attributable to equity holders of the parent company increased to RMB 3,914,456 thousand from RMB 3,709,514 thousand at the end of 2022[93]. - The company’s total liabilities increased to RMB 1,359,450 thousand from RMB 1,294,834 thousand at the end of 2022[93]. - The company reported a foreign currency translation gain of RMB 44,511 thousand during the period, contributing positively to the overall comprehensive income[95]. Regulatory and Compliance - The company has adhered to the corporate governance code, except for the separation of the roles of Chairman and CEO, which the board believes is appropriate under current circumstances[75]. - The latest amendments to the Foreign Investment Telecommunications Regulations maintain that foreign investors cannot hold more than 50% equity in companies providing value-added telecommunications services in China[78]. - The company is consulting with legal advisors to determine the most feasible method for holding stakes in Meitu Network and its subsidiaries, amidst regulatory uncertainties in China[79]. Strategic Outlook - The company is actively seeking to establish effective control and economic benefits from its subsidiaries through contractual arrangements, despite foreign investment restrictions in China[79]. - The company is exploring potential mergers and acquisitions to strengthen its market position and expand its service offerings[178]. - The company has revised its performance guidance for the upcoming quarters, reflecting a positive outlook based on current user engagement metrics[178].