Core Viewpoint - Morgan Stanley believes that Meitu's growth trajectory has not been affected by the AI model Nano Banana, emphasizing that its true value lies in providing "last mile" solutions that basic AI models cannot achieve [2][3]. Group 1: Market Concerns and Reactions - The launch of Google's AI model Nano Banana on August 26 sparked market fears about whether powerful AI models would encroach on the core business of application software like Meitu [5][8]. - Following the announcement, Meitu's stock price plummeted by 14%, while the Hang Seng Index rose by 2% during the same period [9]. - This incident reflects a broader anxiety in the market regarding the survival model of application-layer software in the AI era [12]. Group 2: Last Mile Value Proposition - Morgan Stanley analysts stress that in the AI era, the value of application software lies in providing "last mile" services to optimize outcomes, which generic AI models cannot fully achieve [14]. - The complexity of the visual industry’s "last mile" is attributed to two factors: the fragmentation of scenarios and the diversity of user needs, as well as the subjectivity of personal preferences [15][17]. Group 3: Meitu's Competitive Advantages - Meitu has established significant advantages in maximizing "last mile" value through long-term accumulation [20]. - The company focuses on non-professional leisure and productivity scenarios, allowing it to deeply understand user pain points and develop optimized workflows [20][21]. - Meitu has accumulated vast amounts of high-quality vertical data, particularly in portrait beautification and e-commerce design, which helps create tailored models that outperform generic ones [21]. - The company has a clear business model where users pay for "core functions," which are essential for driving subscriptions, distinguishing it from generic AI models that may replicate less critical features [22].