Meitu Inc. reports H1 2024 financial results: AI driven net profit rises 80.3% year on year to $270 million

On August 28, 2024, Meitu Inc (1357.HK) released its H1 2024 financial results: total revenue of 1.62 billion yuan (RMB, same below), up 28.6% year-on-year. The adjusted net profit attributable to owners of the company was RMB 270 million, a year-over-year increase of 80.3%.

Growth in total revenue and net profit was mainly attributable to continued GenAI product improvements. Image and design products, primarily driven by paid subscriptions, maintained rapid revenue growth.

In H1 2024, Meitu reported a revenue of RMB 930 million from its primarily paid subscription-driven image, video, and design product business, marking a year-over-year growth of 54.5% and accounting for 57.4% of the total revenue. The company's advertising business generated a revenue of RMB 410 million, up 18.3% compared to the previous year. Meanwhile, its beauty industry solution business brought in a revenue of RMB 270 million. The company also reported 7.1 million in revenue from other operations.

Focusing on image and design products and reaching a new record high of 10.81 million paid subscribers.

In 2024, Meitu, driven by AI, crafted exceptional image, video and design products.

As the largest source of revenue for Meitu, its imaging and design products business maintained rapid growth, with first-half revenue of RMB 930 million, up 54.5% year-on-year and accounting for 57.4% of total revenue. This was the main factor behind the significant increase in adjusted net profit attributable to equity holders of the parent company. Paid subscription is the primary revenue model for this business.

The extensive use of generative AI technology continued to boost the appeal of Meitu's product lineup. By providing better results in image/video processing and visual design creation, both paid subscription penetration and revenue experienced rapid growth.

As of June 30, 2024, total paid subscription user count hit an all-time high, surpassing 10.81 million, translating to a paid penetration rate of approximately 4.2%.

Meitu productivity tools continue to gain traction in the industry by catering to scenario-specific needs

In H1 2024, Meitu continued to exert effort in productivity tools, serving creators by crafting AI workflows suited to task-specific requirements.

DesignKit, which focuses on "e-commerce design AI workflows", recorded a year-on-year revenue increase of over 152%. As a significant revenue contributor among Meitu's image and design products, DesignKit has also become a leading offering in the domestic AI design tools category. Kaipai, optimized for podcast video creation, has generated over 50 million user-created pieces of content.

During the 3rd Meitu Multimedia Festival, Meitu's portfolio was further bolstered by introducing six new/upgraded productivity products. With its new one-stop gaming ad marketing solution, QIMI, Meitu has expanded its operation from content creation to content marketing.

In H1 2024, Meitu acquired ZCOOL, China's leading visual creative community. A brand new, jointly developed designer services platform was also launched shortly after. While enriching the design resources of Meitu productivity tools, ZCOOL's acquisition will also enhance the uptake of these products in China's design and creative community.

Significant globalization strides propelled a 4.3% MAU increase YOY.

As of June 30th, 2024, Meitu's monthly active user count reached 258 million, reflecting a year-on-year growth of 4.3%. The monthly active user count in countries and regions outside Mainland China was 84.73 million, an increase of 15 percent year-on-year, amounting to 32.9 percent of overall MAU.

在丰富AI功能的带动下，美图公司多款产品在全球范围内表现优异。美图秀秀在韩国、日本、泰国、越南、埃及、南非等国家持续位居App Store排行榜前列，Wink登顶泰国、印度尼西亚的App Store排行榜。

In H1 2024, the Meitu app and BeautyCam continued to lead in the image beautification and photo & camera categories, respectively. BeautyCam also claimed the top spot in the App Store China's overall rankings.

Moreover, with a year-on-year MAU increase of about 99%, Wink has become the 3rd largest offering in Meitu's product portfolio after the Meitu app and BeautyCam, further showcasing our ability to create successful products.

Strengthened AI capability reserves with RMB 430 million in R&D investment, up 44.5% year-on-year

Meitu's H1 2024 R&D spending reached RMB 430 million, up 44.5% year-on-year and accounting for 26.2% of total revenue.

Meitu is constantly exploring the field of AI. To date, the company has registered 484 patents and holds 266 software product copyrights. As its technology hub, Meitu Image Research Institute (MT Lab) has published many academic papers in top international conferences and journals such as CVPR, ECCV, ICCV, NIPS, AAAI, ACM MM, etc., and has won several international AI competitions.

In H1 2024, Meitu's MiracleVision large model, now at version 5.0 and seamlessly integrated into the company's image and design products, was officially registered under the "Interim Measures for the Management of Generative Artificial Intelligence Services" legislation. While empowering e-commerce, advertising, gaming, animation, and film and television workflows, MiracleVision is now also available to our industrial customers and partners.

Gary Ngan, Chief Financial Officer and Corporate Secretary of Meitu, said, "Driven by generative AI, we delivered gratifying results once again. Apart from sustained growth in global MAU and paid subscriptions, we also had record-high adjusted net revenue on an attributable basis. By placing greater emphasis on user needs, we will be able to make bigger breakthroughs in high gross margin areas in the image and design space. We are confident in our ability to seize greater market opportunities. "

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