Investment Rating - Buy-A rating with a 6-month target price of HKD 3.70 [4] Core Views - Meitu is a leader in the aesthetic and creative tools industry, leveraging its flagship app Meitu Xiuxiu to dominate the market with high user stickiness [1] - The company has expanded its product matrix from consumer-facing (ToC) to business-facing (ToB) applications, targeting both individual users and small businesses (e.g., KOLs, e-commerce sellers) [1] - Meitu's revenue from its productivity tools, such as Meitu Design Studio, exceeded RMB 100 million in 2023, a 229.8% YoY increase [1] - The shift from a traffic-driven model to a subscription-based model has led to a positive cycle of revenue growth and user retention, with paid subscription users reaching 9.11 million by the end of 2023, a 62.3% YoY increase [2] - AIGC (AI-generated content) has lowered the barriers to content creation, enabling non-professionals to produce digital content efficiently, which opens up a vast market for creators, estimated at USD 31 billion [3] Business Expansion and Market Potential - Meitu has successfully transitioned from a free-to-use model to a subscription-based model, with subscription penetration increasing from 1.7% in 2021 to 3.7% in 2023 [2] - The company's B2B products, such as Meitu Design Studio, WHEE, and Kaipai, have shown strong market potential, with Meitu Design Studio generating over RMB 100 million in revenue in 2023 [28] - AIGC has significantly reduced the learning curve for content creators, allowing non-professionals to produce high-quality digital content, which is expected to drive further growth in the creator economy [3] - Meitu's global expansion strategy has been successful, with its products ranking high in non-gaming app revenue charts in overseas markets, particularly in Southeast Asia and Africa [23][24] Financial Performance and Projections - Meitu's revenue in 2023 reached RMB 2.7 billion, a 29.3% YoY increase, with adjusted net profit attributable to shareholders growing by 233.2% YoY to RMB 370 million [19] - The company's gross margin improved to 61.43% in 2023, driven by higher-margin businesses such as imaging and design products [22] - Meitu's paid subscription user base grew to 9.11 million by the end of 2023, a 62.3% YoY increase, with ARPPU (Average Revenue Per Paying User) also rising due to higher-priced productivity tools [2] - The company projects revenue of RMB 3.61 billion, RMB 4.47 billion, and RMB 5.42 billion for 2024, 2025, and 2026, respectively, with net profit expected to reach RMB 522 million, RMB 744 million, and RMB 995 million in the same periods [8][61] AI and Technological Advancements - Meitu's self-developed visual AI model, MiracleVision, has been a cornerstone of its AI product ecosystem, enabling features such as AI-generated portraits, AI design, and AI video editing [48] - The company has integrated AI capabilities across its product suite, with 83% of daily image and video processing involving AI functions [49] - MiracleVision has been approved under China's AI service management regulations, making it the first visual-focused AI model to receive such approval in Fujian Province [51] - The AI model is expected to enhance efficiency in industries such as e-commerce, advertising, gaming, animation, and film production, reducing costs and improving workflow [52] Market Opportunities and Competitive Landscape - The creator economy, particularly the "spreader" segment (e.g., KOLs, e-commerce sellers), represents a significant growth opportunity for Meitu, with a market size estimated at USD 31 billion [3] - Meitu's strong user base and AI-native capabilities position it well to capture market share in the growing AIGC space, competing with players like Adobe, Canva, and emerging AI image generation platforms [56] - The company's focus on productivity tools and subscription-based models aligns with the broader trend of AI democratizing content creation, enabling it to tap into higher-value B2B markets [54]
美图公司：领航科技美学，AIGC加持创意生成