Core Viewpoint - The article discusses the growth and trends of AI applications in the mobile sector, highlighting significant revenue increases and user engagement metrics, particularly in the ChatBot and Art Generator categories. Group 1: AI App Market Growth - In 2024, global non-game app in-app purchase revenue is expected to grow by $13.7 billion to $69.2 billion, with AI apps contributing $1.2 billion, marking a 179% year-on-year increase [6][14]. - AI product downloads reached 1.49 billion in 2024, a 91.8% increase year-on-year, with revenue hitting $1.2 billion, also reflecting a 179.1% growth [14]. - The productivity tools category, driven by AI integration, saw a 34.9% revenue increase, reaching $14.3 billion, despite a slight decline in overall downloads [42]. Group 2: User Demographics and Preferences - The primary user demographic for ChatBot products is males aged 25-34, with over 70% male users for ChatGPT and Microsoft Copilot, while female user proportions are gradually increasing [28]. - AI companionship products like c.ai attract a younger female audience aged 18-24, with a female user ratio of 71.8% [28]. - User preferences indicate that ChatGPT users tend to favor productivity and self-improvement tools, while ChatOn users prefer efficiency-oriented applications [32][33]. Group 3: Product Performance and Trends - ChatGPT dominates the AI app market, accounting for 23% of downloads and approximately 40% of revenue, while shell products remain popular despite competition from major companies [21]. - Art Generator products are primarily image-based, with limited video offerings, but new entrants like Kling and PixVerse are beginning to show promising revenue streams [19]. - The report notes that while c.ai has high daily usage, its revenue remains low due to reliance on external IP and subscription fees, leading to challenges in profitability [37]. Group 4: Market Insights and Future Outlook - The integration of AI features in traditional productivity tools is enhancing user experience and willingness to pay, with significant ARPU growth observed in markets like Australia and the UK [46]. - Major companies like Google and ByteDance continue to dominate the market, but smaller players are also making strides in specific niches [48]. - The future of AI tools appears promising as they evolve and find practical applications, suggesting ongoing investment opportunities in this sector [46].

Investment Rating - The report maintains a "Buy" rating for Meitu, with a target price of 7.49 HKD [11]. Core Viewpoints - AI technology is expected to have a supplementary effect on image life scenarios in the short term, while the long-term competitiveness will rely on vertical data-driven AI model tuning and user understanding [5][14][19]. - The global market for image life scenarios is projected to reach approximately 7 billion USD in 2024, with a low average payment penetration rate of around 4% [21][25]. - Meitu is well-positioned to benefit from user growth and increased subscription penetration driven by AI, leveraging its deep understanding of user needs and experience in high-quality domestic products [6][49]. Summary by Sections Industry Investment Rating - The report recommends a "Buy" rating for Meitu, indicating confidence in its market position and growth potential [11]. Market Analysis - The image life scenario market primarily targets social and entertainment needs, with a user base of approximately 4 billion but a low payment penetration rate of 4% [21][25]. - The potential market space for image life scenarios in 2024 is estimated at 7 billion USD, which is significantly less than productivity scenarios [21][25]. AI Impact on the Industry - AI is expected to enhance product capabilities rather than replace existing applications in the short term, with traditional applications maintaining an advantage due to established user habits and data accumulation [5][14][19]. - AI can create new user growth paths and expand subscription opportunities, with successful examples like FaceApp and Meitu demonstrating the effectiveness of AI-driven features in user engagement [3][15][40]. Regional Market Opportunities - The report highlights the differences in subscription model maturity across global markets, with the US and Europe being more established, while Southeast Asia presents significant growth potential due to its large user base and cultural affinity [4][18][62]. - In the US market, the revenue contribution is high, while Southeast Asia has a larger number of active users, making both regions key targets for Meitu's international expansion [62][63]. Competitive Landscape - The report argues against the prevailing market view that AI will disrupt traditional image life applications, asserting that the short-term impact will be more about enhancement than replacement [5][19]. - Meitu's long-standing experience in the beauty application sector positions it favorably to leverage AI advancements for sustained growth and user retention [6][49].