Meitu (1357) H1 2024 earnings summary

Executive summary

• Revenue increased 28.6% year-over-year to RMB1.62 billion, with adjusted net profit attributable to owners up 80.3% to RMB272.8 million, reflecting strong core business growth and global expansion driven by AI-powered products.

• Monthly active users (MAU) reached 258 million as of June 30, 2024, up 4.3% year-over-year, with 32.9% of MAU outside Mainland China, highlighting successful globalization.

• AI-powered video editing app Wink saw MAU growth of approximately 99% year-over-year, becoming the third largest app in the portfolio.

• Completed the acquisition of Zcool Network Group, expanding the ecosystem in photo, video, and design content creation, and launched a new online marketplace for freelance design services.

• Strong subscription growth and continued investment in AI underpin future expansion.

Financial highlights

• Revenue: RMB1,621.2 million, up 28.6% year-over-year.

• Gross profit: RMB1,052.6 million, up 39.6% year-over-year; gross margin increased to 64.9% from 59.8%.

• Adjusted net profit attributable to owners: RMB272.8 million, up 80.3% year-over-year.

• Net profit: RMB303.7 million, up 45.0% year-over-year.

• Earnings per share: Basic RMB0.07, diluted RMB0.06.

• Cash and liquid financial resources: RMB1,298.5 million as of June 30, 2024.

Outlook and guidance

• Continued investment in AI and product capabilities expected to drive further growth in paying subscription rates and revenue for the remainder of 2024.

• Management remains cautious on the beauty industry solutions segment due to low gross margins and slower growth.