Core Viewpoint - Meitu has successfully transitioned through three technological revolutions: from PC internet to mobile internet, and now to the AI era, enhancing its product offerings and user engagement [1] Group 1: Development Stages - The initial phase involved the launch of Meitu Xiuxiu in 2008, which simplified photo editing and attracted a large user base, reaching over 200 million users across PC and mobile by 2012 [1] - The company shifted focus to a subscription model starting in 2018, moving away from a traffic-based revenue model to enhance quality and user experience [1] - In the AI era, Meitu has integrated AI capabilities across all its products, resulting in increased monthly active users and improved payment rates [1] Group 2: Competitive Advantages - Meitu's strong channel capabilities and centralized operational system have allowed it to adapt to market changes and maintain a leading position in the beauty app sector [2] - The brand recognition and user loyalty built through Meitu Xiuxiu serve as a competitive advantage, enabling the company to quickly respond to market trends and consumer preferences [2] - The company leverages insights from its existing user base to innovate new products, such as Wink and Meitu Design Studio, which are informed by user needs [2] Group 3: Future Growth Strategies - Future growth for Meitu is centered around three main areas: global expansion, development of productivity tools, and ongoing investment in AI [3] - Meitu's products have strong competitive advantages in overseas markets, with clear operational strategies for international versions of its core products [3] - The company is expanding its productivity tools, like Meitu Design Studio, which targets the "communicator" user group and aims to democratize technology for consumers [3]

格隆汇7月31日丨根据联交所最新权益披露资料显示，2025年7月24日，美图公司(01357.HK)获Morgan Stanley在场内以每股均价10.9941港元增持好仓156.65 万股，涉资约1722.24万港元。 | 麦格序號 | 大股東/董事/最高行政人員名稱作出披露的 買入 / 賣出或涉及的 每股的平均價 | | | | 持有權益的股份數目 佔已發行的 有關事件的日期 | | | --- | --- | --- | --- | --- | --- | --- | | | 股份數目 | 原因 | | | ( 語参関 菰 * 註 | 有投票權股 (日 / 月 / 年) | | | | | | | | 份百分比 | | | | | | | | ( % | | CS20250729E00403 | Morgan Stanley | 1001(L) | 1.566,515(L | HKD 10.9941 | 228,852,022(L) | 5.01(L)24/07/2025 | | | | | | | 78.454.826(S) | 1.71(S) | | | | | | | (P) | 0.00(P) ...

Core Viewpoint - Meitu Inc. is experiencing a decline in stock price while maintaining a strong user base and financial performance, indicating potential investment opportunities and market challenges [1][2]. Group 1: Company Overview - Meitu Inc. is an AI-driven technology company focused on image and design product development, as well as digital solutions for the beauty industry [1]. - As of June 2024, the company has 258 million monthly active users, with 84.73 million users outside mainland China [1]. Group 2: Financial Performance - For the fiscal year ending 2024, Meitu Inc. reported total revenue of 3.341 billion yuan and a net profit of 805 million yuan [2]. - The company is set to disclose its mid-year report for the fiscal year 2025 on August 18 [2].

Core Insights - Meitu Inc. is a technology company driven by artificial intelligence, focusing on image and design product development as well as digital solutions for the beauty industry [1][3] Financial Performance - As of the latest annual report for 2024, Meitu Inc. reported total revenue of 3.341 billion yuan and a net profit of 805 million yuan [2] - The company is set to disclose its mid-year report for the fiscal year 2025 on August 18 [2] User Engagement - By June 2024, Meitu Inc. had 258 million monthly active users, with 84.73 million users located outside mainland China [1]

Investment Rating - The report assigns a "Buy" rating for Meitu Company (1357.HK) [13] Core Insights - Meitu Company has successfully transformed from a traffic-based business model to a subscription-based model, leveraging its strong aesthetic know-how and technological foundation [3][9] - The company has experienced three technological transformations: from PC internet to mobile internet, and now to the AI era, which has enhanced its product capabilities and user engagement [9][20] - Meitu's growth strategy focuses on three main lines: globalization, expansion of productivity tools, and continuous investment in AI [11][20] Summary by Sections Company Overview - Founded in 2008, Meitu has evolved through significant technological changes, initially launching the PC version of Meitu Xiuxiu, which simplified photo editing for users [20] - The company shifted its focus back to software tools and began transitioning from a traffic monetization model to a subscription model starting in 2018 [9][20] Competitive Advantages - Meitu's strong channel capabilities and accumulated user aesthetic recognition have allowed it to maintain a leading position in the competitive beauty app market [10][57] - The company has built a robust product matrix that includes both lifestyle and productivity tools, with flagship products like Meitu Xiuxiu and BeautyCam leading their respective categories [27][93] AI Integration - All of Meitu's products have integrated AI capabilities, which have driven new growth in key metrics such as monthly active users (MAU) and payment rates [9][11] - The launch of the MiracleVision AI model in 2023 has provided a foundation for enhancing the AI capabilities across Meitu's product ecosystem [66] Market Position - Meitu holds a dominant market share of approximately 55.96% in the photo editing software sector, significantly ahead of its closest competitor [67] - The company has successfully expanded its user base internationally, particularly in Southeast Asia, where its products have gained substantial traction [93][104] Financial Performance - The subscription revenue has become a major pillar of Meitu's total income, with the subscription rate doubling from the initial phase of the transition [33][39] - The gross margin has improved significantly, rising from 15% to 69% by the end of 2024, reflecting the successful shift away from low-margin hardware businesses [39][41]

Investment Rating - The report assigns a rating of "Buy" for the company [1]. Core Insights - The company is experiencing high growth in its imaging product business, driven by AI capabilities and a successful global expansion strategy [2][10]. - The projected revenue for 2024 is 3.34 billion RMB, representing a year-on-year increase of 23.9%, with a gross margin of 68.7% [10]. - The company has a total MAU of 266 million as of December 2024, with a significant increase in paid subscription users [10]. Financial Summary - Total revenue is expected to grow from 2.696 billion RMB in 2023 to 6.013 billion RMB by 2027, with a compound annual growth rate (CAGR) of approximately 19% [4]. - Net profit is projected to increase from 378 million RMB in 2023 to 1.302 billion RMB in 2027, reflecting a substantial growth trajectory [4]. - The company’s PE ratio is expected to decrease from 40.00 in 2023 to 37.23 in 2027, indicating a potential increase in valuation [4]. Business Segment Projections - The imaging and design products segment is anticipated to generate revenue of 2.088 billion RMB in 2024, with a year-on-year growth of 57.1% [14]. - The beauty solutions segment is expected to decline, with revenues projected to decrease by 32.4% in 2024 [14]. - Advertising revenue is forecasted to grow steadily at 10% annually from 2024 to 2027 [14]. User Growth and Engagement - The company aims to increase its global paid user base to 15.76 million by 2025, with a subscription penetration rate of 5.9% [13]. - The average annual revenue per subscription user is projected to rise gradually, reaching 215 RMB by 2027 [13]. - The company has launched several AI-driven features, enhancing user engagement and expanding its product offerings [10][13]. Strategic Partnerships - The company has secured a $250 million convertible bond investment from Alibaba, which will facilitate strategic cooperation in e-commerce, AI, and cloud computing [10][13]. - Alibaba will prioritize promoting the company's AI e-commerce tools on its platforms, providing essential technical support [10].

Core Viewpoints - The company is expected to achieve better-than-expected performance growth in the first half of 2025, driven by AI's effective acceleration of the payment rate and significant growth in overseas downloads [1][2] - Key areas to monitor include the Q4 holiday season for C-end AI entertainment features and the progress of B-end collaboration with Alibaba [1] Company Product Development - The company's imaging and design AI Agent RoboNeo has recently entered the testing phase for C-end users, offering features that compete with Meitu and Wink for C-end and Meitu Design Studio for B-end [2] - The integration of AI into core products is anticipated to enhance payment rates and solidify the company's leading position in the market [2] Financial Projections - The adjusted net profit for the company is projected to be 825 million, 1.126 billion, and 1.463 billion yuan for 2025, 2026, and 2027 respectively, with year-on-year growth rates of 40.78%, 36.50%, and 29.91% [2] - The price-to-earnings ratio corresponding to the closing price on July 23, 2025, is expected to be 54.16, 39.68, and 30.54 times for the respective years [2]

Core Viewpoint - The company expects a significant increase in net profit for H1 2025, with a projected growth of no less than 30% year-on-year, and an adjusted net profit growth of approximately 65%-72% to reach 450-469 million yuan, exceeding previous expectations [1] Group 1: Financial Performance - The core business of imaging and design products is driving rapid revenue growth due to an increase in paid subscription users [1] - The gross margin of the core business is high, and as its revenue share increases, it will enhance the overall gross profit and gross margin year-on-year [1] - The increase in comprehensive operating expenses is lower than the growth in gross profit, leading to improved profitability [1] Group 2: User Growth and Product Development - The introduction of AI features such as "AI Dressing" and "AI Flashlight" has propelled the company's products to the top of the App Store photography and video category in multiple countries, which is expected to significantly boost overseas MAU [2] - The company is focusing on a user growth strategy driven by product innovation and social media amplification, leveraging vast user data and aesthetic insights to launch globally appealing AI features [2] - The main productivity tool, "Meitu Design Studio," targets the e-commerce AI scene and is expected to generate over 200 million yuan in revenue by 2024, with successful user expansion [2] Group 3: Profit Forecast and Investment Rating - The company's performance in H1 2025 exceeded expectations, and the anticipated increase in paid rates is expected to further enhance profitability [3] - The adjusted net profit forecasts for 2025-2027 are 854 million, 1.177 billion, and 1.474 billion yuan, with corresponding PE ratios of 52, 38, and 30 times [3] - The company is viewed as a rare high-growth AI application target, with AI empowerment expected to drive revenue and profit growth, justifying a "buy" rating [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is expected to achieve a year-on-year growth of not less than 30% in net profit attributable to shareholders for the first half of 2025, with adjusted net profit projected to grow approximately 65%-72% to 450-469 million yuan, exceeding expectations [7] - The core business of image and design products is showing significant operational leverage, with an increase in paid subscription users driving rapid revenue growth. The gross margin of this business is high, and as its revenue share increases, it is expected to enhance overall gross profit and margin [7] - The introduction of AI features in products like beauty cameras and Meitu Xiuxiu has led to significant user engagement, with expectations for substantial growth in overseas monthly active users (MAU) [7] - The company is focusing on AI productivity tools, particularly in e-commerce scenarios, with a strategic partnership with Alibaba expected to accelerate user expansion [7] - The company forecasts adjusted net profits of 854.22 million yuan, 1,176.94 million yuan, and 1,473.84 million yuan for 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 52, 38, and 30 [1][7] Financial Summary - Total revenue for 2023 is projected at 2,696 million yuan, with a year-on-year growth of 29.27%. For 2024, revenue is expected to reach 3,341 million yuan, growing by 23.93% [1] - Adjusted net profit for 2023 is estimated at 368.30 million yuan, with a significant year-on-year increase of 233.17%. The adjusted EPS for 2023 is projected at 0.08 yuan per share [1] - The company’s total assets are expected to grow from 7,046.68 million yuan in 2024 to 10,077.93 million yuan by 2027, indicating a strong growth trajectory [8]

Summary of Meitu Inc. Conference Call Company Overview - **Company**: Meitu Inc (1357.HK) - **Industry**: Greater China IT Services and Software - **Current Price Target**: HK$14.40, raised from HK$6.00 [2][6] Key Developments - **Launch of RoboNeo**: Meitu introduced an AI design agent named RoboNeo, available for free on websites and mobile apps, supporting English and Chinese. The primary goal is to gather user feedback before integration into other applications [3][4]. - **E-commerce Focus**: RoboNeo aims to simplify e-commerce design, allowing users to create product images, posters, and logos without prior design experience, potentially reducing costs associated with hiring designers [4][5]. Financial Performance - **Revenue Growth**: Projected total consolidated revenue for 2025 is Rmb4,227 million, increasing to Rmb6,981 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 26.5% [11][75]. - **Net Profit**: Expected net profit for 2025 is Rmb868 million, growing to Rmb1,716 million by 2027 [11][75]. - **Earnings Per Share (EPS)**: Projected EPS for 2025 is Rmb0.19, increasing to Rmb0.37 by 2027 [11][75]. Market Position and Strategy - **Partnership with Alibaba**: Meitu's collaboration with Alibaba is expected to enhance its e-commerce design capabilities, leveraging Alibaba's platform and data [5][44]. - **Transition to Subscription Model**: Meitu is shifting from an advertising-based model to a subscription-based model, which is anticipated to drive long-term revenue growth [20][46]. Competitive Landscape - **Comparison with Competitors**: RoboNeo is compared to Lovart, another design agent launched by former CapCut management. Meitu's advantage lies in its comprehensive application portfolio and integration capabilities [5][44]. - **Market Size for AI E-commerce Design**: Estimated market size for AI-driven e-commerce design in China is around Rmb15 billion, with significant potential for growth as AI adoption increases [36][39]. Key Metrics and Projections - **Monthly Active Users (MAU)**: Expected growth in MAUs from 266 million in 2024 to 309 million by 2027 [27][41]. - **Paying User Penetration**: Projected increase from 4.7% in 2024 to 9.4% by 2027 [27][41]. - **Average Revenue Per Paying User (ARPPU)**: Expected ARPPU to rise from Rmb192 in 2024 to Rmb220 by 2027 [27][41]. Risks and Considerations - **Execution Risks**: Successful execution of the new strategies and product launches is critical for achieving projected growth [6][20]. - **Market Perception**: Current market perception may not fully reflect the long-term potential of RoboNeo and its impact on ARPPU [46][47]. Conclusion Meitu Inc is positioned for significant growth through its innovative AI design agent, RoboNeo, and strategic partnerships, particularly with Alibaba. The transition to a subscription model and the focus on e-commerce design are expected to enhance revenue and profitability in the coming years.