Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported a total revenue of 3.34 billion HKD in 2024, representing a year-on-year growth of 23.9%. The adjusted net profit attributable to shareholders was 586 million HKD, a year-on-year increase of 59.2%, marking six consecutive years of positive net profit growth since 2019. The gross margin was recorded at 68.7%, an increase of 7.3 percentage points year-on-year [4][5][7] - The company has accelerated its global expansion, with global monthly active users reaching 266 million, a year-on-year increase of 6.7%. Overseas users accounted for 94.51 million (35.6% of total users), growing by 21.7% year-on-year. The introduction of AI features has significantly contributed to user growth and engagement [5][6] - The company has seen a significant increase in paid subscription users, reaching approximately 12.61 million, a historical high with a year-on-year growth of 38.4%. The subscription penetration rate is approximately 4.7%, with a focus on higher-margin imaging and design products [6][7] Financial Performance - For 2025-2027, the company is projected to achieve revenues of 4.11 billion HKD, 4.99 billion HKD, and 5.90 billion HKD, with year-on-year growth rates of 22.9%, 21.4%, and 18.3% respectively. The NON-IFRS net profit is expected to be 903 million HKD, 1.20 billion HKD, and 1.47 billion HKD, with growth rates of 54.2%, 32.2%, and 23.3% respectively [7][10]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported a total revenue of 3.34 billion HKD for 2024, representing a year-on-year growth of 23.9%. The adjusted net profit attributable to shareholders was 586 million HKD, a 59.2% increase year-on-year, marking six consecutive years of positive net profit growth since 2019. The gross margin reached 68.7%, up by 7.3 percentage points year-on-year [4][5] - The company is accelerating its global expansion, with global monthly active users reaching 266 million, a 6.7% year-on-year increase, of which overseas users accounted for 94.51 million (35.6%), growing by 21.7% year-on-year. The "AI Dressing" feature significantly contributed to the addition of over 20 million overseas users [5][6] - The company has seen a significant increase in paid subscription users, reaching approximately 12.61 million, a historical high with a year-on-year growth of 38.4%. The subscription penetration rate is about 4.7% [6][7] Financial Performance - For 2025-2027, the company expects revenues of 4.11 billion HKD, 4.99 billion HKD, and 5.90 billion HKD, with year-on-year growth rates of 22.9%, 21.4%, and 18.3% respectively. The NON-IFRS net profit is projected to be 903.996 million HKD, 1.195 billion HKD, and 1.474 billion HKD, with growth rates of 54.2%, 32.2%, and 23.3% respectively [7][10]

Investment Rating - The report maintains a rating of "Buy" for the company, with a target price of 7.04 HKD, reflecting a potential upside based on projected growth [4][26]. Core Insights - The company achieved a total revenue of 3.34 billion RMB in 2024, with a significant increase in the revenue share from its core imaging and design products, which accounted for 62.4% of total revenue, reaching 2.09 billion RMB, a year-on-year growth of 57.1% [1][13]. - The overall gross profit for 2024 was 2.29 billion RMB, resulting in a gross margin of 68.7%, an increase of 7.24 percentage points compared to the previous year [1][13]. - The adjusted net profit attributable to the parent company grew by 59.2% year-on-year, exceeding the previously announced expectations [1][13]. Summary by Sections 1. Imaging and Design Core Competence - The company has enhanced its core capabilities in imaging and design, forming a combination of image, video, and design tools, with the imaging and design product revenue growing significantly [1][13][17]. - The advertising business also saw a revenue increase of 12.5%, contributing 25.5% to total revenue, while the beauty industry solutions revenue decreased by 32.4% [1][13]. 2. AI-Driven Overseas Market Expansion - The company increased its R&D expenses by 43.3% to 910 million RMB in 2024, focusing on AI model training and product development [3][19]. - The monthly active users (MAU) from overseas markets reached 94.51 million, a year-on-year growth of 21.7%, indicating successful user acquisition strategies [2][19]. 3. Profit Forecast and Investment Recommendations - Revenue projections for 2025 to 2027 are estimated at 4.05 billion RMB, 4.85 billion RMB, and 5.65 billion RMB, respectively, with a consistent growth rate [6][23]. - The gross margin is expected to continue increasing, reaching 71%, 73%, and 74% over the next three years, driven by the high-margin imaging and design products [6][26].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 7.49 [7][8]. Core Insights - The company reported a revenue of HKD 1.72 billion for 2H24, representing a year-over-year increase of 19.8%, although this was 6% below consensus expectations due to adjustments in its beauty business. However, the core imaging business exceeded expectations by 7% [1]. - The adjusted net profit attributable to the parent company for 2H24 was HKD 310 million, surpassing expectations by 11%, and the full-year adjusted net profit reached HKD 590 million, hitting the upper limit of the performance guidance [1]. - The company is focusing on high-margin imaging products and strategically adjusting its beauty business, leading to an increase in gross margin by 7.5 percentage points in 2H24 [2]. - The company is leveraging AI technology to enhance productivity and drive global expansion, which is expected to unlock significant long-term growth potential [1][3]. Summary by Sections Revenue and Profitability - The core imaging and design product business achieved a revenue of HKD 2.09 billion in 2024, a year-over-year increase of 57.1%, driven by user growth and increased paid penetration [2]. - The global Monthly Active Users (MAU) reached 266 million by the end of 2024, exceeding the expected 260 million, with paid subscription users numbering 12.61 million, surpassing the guidance of 12.34 million [2]. AI and Globalization - The company is accelerating the commercialization of AI-driven productivity applications, with its product "Meitu Design Studio" generating nearly HKD 200 million in revenue, and the "Kaipai" app achieving a subscription penetration rate of 12.8% in its first year [3]. - The overseas market MAU grew by 21.7% in 2024, with the company’s products frequently topping app charts in various countries. The overseas market revenue increased by 42% year-over-year, accounting for 32% of total revenue [4]. Financial Forecast and Valuation - The company forecasts revenues of HKD 4.3 billion, HKD 5.4 billion, and HKD 6.8 billion for 2025, 2026, and 2027 respectively, with adjusted net profits of HKD 900 million, HKD 1.21 billion, and HKD 1.59 billion for the same years [5][12]. - The report suggests a valuation premium due to the company's unique position in AI commercialization, leading to a revised 2025 PE ratio of 35x, with a target price of HKD 7.49 [5][12].

Core Viewpoint - Meitu Company (01357) experienced a stock increase of over 5% following the release of its 2024 annual performance report, highlighting significant growth in adjusted net profit and revenue driven by its imaging and design products [1] Financial Performance - The company reported a revenue of RMB 3.341 billion, representing a year-on-year increase of 23.9% [1] - Adjusted net profit attributable to equity holders reached RMB 586 million, marking a year-on-year growth of 59.2% [1] - Earnings per share were reported at RMB 0.18, with a proposed final dividend of HKD 0.0552 per share [1] Growth Drivers - The net profit and adjusted net profit for 2024 saw year-on-year growth of 112.8% and 59.2%, respectively [1] - Overall gross margin continued to improve, primarily due to the increasing contribution of high-margin imaging and design products to total revenue [1] User Engagement and AI Integration - Monthly Active Users (MAU) reached 266 million, a year-on-year increase of 6.69% [1] - The number of paying users reached 12.61 million, with a payment rate of 4.74%, reflecting a year-on-year increase of 1.09 percentage points [1] - The company has been enhancing product capabilities through AI, launching popular features such as "Clay Filter," "Brain Hole Special Effects," and "AI Outfit Change," which have driven user payment conversion [1] Market Outlook - Dongwu Securities expressed optimism regarding the company's productivity and global strategy advancement, anticipating continued operational leverage effects [1]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a total revenue of 3.34 billion RMB in 2024, representing a year-on-year growth of 23.94%, and an adjusted net profit of 586.17 million RMB, up 59.16% year-on-year, which is at the upper limit of the previously forecasted range [7] - The imaging and design products continue to show rapid growth, with revenue from this segment reaching 2.09 billion RMB, a year-on-year increase of 57.12%, accounting for 62.43% of total revenue [7] - The company is leveraging AI to enhance product capabilities, resulting in a steady increase in paid user penetration, with a total of 12.61 million paid users and a penetration rate of 4.74%, up 1.09 percentage points year-on-year [7] - The company's productivity and globalization strategies are showing breakthroughs, with MAU outside mainland China reaching 94.51 million, a year-on-year increase of 21.66% [7] - The report projects adjusted net profits for 2025-2027 to be 914.27 million RMB, 1.20 billion RMB, and 1.56 billion RMB respectively, with corresponding PE ratios of 29, 22, and 17 times based on the current stock price [7] Financial Summary - Total revenue for 2024 is projected at 3.34 billion RMB, with a growth rate of 23.93% for 2025 and 21.96% for 2026 [8] - The adjusted net profit is expected to grow significantly, with projections of 914.27 million RMB for 2025 and 1.20 billion RMB for 2026 [8] - The company’s gross margin improved to 68.67%, an increase of 7.25 percentage points year-on-year, driven by high-margin product revenue growth [7]

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]

Core Viewpoint - Meitu Inc. expresses confidence in its future business prospects and plans to increase its shareholding after the annual performance announcement and the end of the lock-up period on March 18, 2025 [1] Group 1: Shareholder Activity - Shareholder Cai Wensheng sold 128 million shares of Meitu Inc. from February 17 to February 21, 2025, representing approximately 2.81% of the total issued shares [1] - Meitu Inc. founder Wu Xinhong has never sold any shares of the company and has made several purchases since May 10, 2018, with the most recent purchase occurring on June 18, 2024 [1]

Investment Rating - The report assigns an "Accumulate" rating to Meitu, with a target price of HKD 6.96 based on a projected PE of 37X for 2025 [5][7]. Core Insights - Meitu focuses on enhancing its image and design products through AI technology, which drives membership subscription conversion and improves user experience, retention, and willingness to pay [1][2]. - The company is expanding its B-end applications, with a notable increase in productivity product users and subscription penetration rates, indicating a strong growth trajectory [2][3]. - Meitu's global user base is growing, with significant contributions from overseas markets, and its advertising business is also on the rise due to increased user engagement [3][7]. Summary by Sections Strategic Focus on Image and Design Products - Meitu has refocused on its core image and design applications, leveraging AI to enhance product capabilities and user engagement, leading to a significant increase in active users and subscription rates [1][16]. - The flagship product, Meitu Xiuxiu, remains a leader in the market, with a strong daily active user (DAU) base and a comprehensive suite of features [1][58]. Expansion into Productivity Scenarios - The number of productivity product users has increased, with a 8.7% quarter-on-quarter growth in the first half of 2024, reaching 19.2 million users, which now accounts for 7.5% of total users [2][61]. - The Meitu Design Studio has seen a revenue growth of over 152%, indicating strong monetization potential in the B-end market [2][3]. Global User Growth and Revenue Streams - Domestic monthly active users (MAU) are stabilizing at over 170 million, while overseas users exceed 30%, contributing nearly 50% of revenue from image and design products [3][7]. - The advertising business has experienced a 129% revenue growth in regions outside mainland China, supported by an increase in overall MAU and the introduction of new products [3][7]. Financial Projections - The report forecasts Meitu's net profit to grow significantly from 378.29 million in 2023 to 925.38 million by 2026, with corresponding EPS increasing from 0.09 to 0.20 [8][7]. - Revenue is expected to rise from 2.70 billion in 2023 to 4.86 billion by 2026, reflecting a compound annual growth rate (CAGR) of approximately 29.3% [8][7].

Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Insights - The company is expected to achieve a significant increase in adjusted net profit of approximately 52-60% year-on-year for 2024, translating to about 560-589 million RMB, driven by rapid growth in revenue from AI-driven imaging and design products [1]. - The company's AI applications are enhancing product capabilities and driving user engagement, with 41% of monthly active users utilizing generative AI features in July 2024 [3]. - The company has sold all its cryptocurrency holdings, realizing a profit of approximately 79.63 million USD (about 571 million RMB), with plans to distribute around 80% of the net proceeds as special dividends [3]. Financial Performance and Forecast - Revenue is projected to grow from 2,085 million RMB in 2022 to 5,572 million RMB by 2026, with a compound annual growth rate (CAGR) of 25.2% to 21.4% over the forecast period [4]. - Adjusted net profit is expected to increase from 111 million RMB in 2022 to 1,109 million RMB by 2026, reflecting a substantial growth trajectory [4]. - The adjusted earnings per share (EPS) is forecasted to rise from 0.02 RMB in 2022 to 0.24 RMB in 2026, indicating improved profitability [4]. AI Product Development - The company launched its MiracleVision AI model in June 2023, which has undergone continuous updates, including enhancements in video generation capabilities [2]. - The company is leveraging partnerships with third-party AI models to enhance its product offerings, indicating a strategic approach to AI development [2]. Market Position - The company ranks third in the online design sector in China with its native AI product, Meitu Design Studio, which is expected to double its revenue to over 200 million RMB in 2024 [3]. - The report highlights the company's potential to capture market share in both lifestyle and productivity application segments as the AIGC (AI Generated Content) market is still in its early stages in China [3].