Meitu, a leading Chinese technology company known for its image-editing and beauty applications, released its financial results for the first half of 2021. The report highlighted both growth in its core businesses and significant volatility related to its foray into cryptocurrency investments.
Financial Performance Overview
The company achieved total revenue of RMB 8.06 billion, representing a year-over-year increase of 44.6%. Adjusted net profit attributable to shareholders reached RMB 33.4 million, up 33.8% compared to the same period last year. Meitu also reported a gross margin of 66.1%, an improvement of 2.3 percentage points.
Core Business Segments
Online Advertising
- Revenue from online advertising amounted to RMB 393 million, growing 23.3% year-over-year.
Advanced Subscription Services
- Launched in 2019, this service has seen rapid adoption. In H1 2021, it generated RMB 211 million, a remarkable increase of 150.7%.
- As of June 2021, the company had approximately 3 million active premium subscribers.
Internet Value-Added Services
- This segment brought in RMB 35.34 million, up 65.6% from the previous year.
Other Revenue
- Other income reached RMB 167 million, a 25.2% increase.
- The Influencer Marketing Solution (IMS) business was the primary contributor, accounting for 87.0% of this segment and generating RMB 146 million—a 49.5% rise.
User Metrics and Platform Performance
As of June 30, 2021, Meitu’s total monthly active users (MAUs) across all platforms stood at 246 million, a decline of 5.8% year-over-year. A breakdown of the MAUs for key apps includes:
- Meitu Xiuxiu: 114 million, down 0.5%
- Meiyan Camera: 62.58 million, up 1.2%
- BeautyPlus: 45.3 million, down 17.8%
Expansion in SaaS and Skincare Technology
Meitu Yifu, a subsidiary, has successfully deployed its flagship panoramic skin detector in over 240 cities worldwide. In addition, Meideide—a company invested in by Meitu—now provides ERP SaaS services to more than 10,000 cosmetics stores across 250 cities in China.
Cryptocurrency Investments and Financial Impact
Earlier in 2021, Meitu made headlines by entering the cryptocurrency market. The company purchased $22.1 million worth of Ethereum and $17.9 million in Bitcoin on March 5. Shortly after, on March 17, it acquired an additional $28.4 million in Ethereum and $21.6 million in Bitcoin. In total, the company invested approximately $90 million in cryptocurrencies.
Management stated that these investments were part of a broader strategy to diversify cash reserves and position the company within the emerging blockchain sector. CEO Wu Xinhong emphasized that the move was intended for long-term asset allocation rather than short-term speculation.
However, due to accounting standards that treat cryptocurrencies as intangible assets measured at cost, the company was required to recognize impairment losses on its Bitcoin holdings. As of June 30, 2021:
- The fair value of Ethereum holdings was approximately $65.2 million.
- The fair value of Bitcoin holdings was approximately $32.2 million.
- A loss of RMB 112 million was recognized due to the decrease in Bitcoin’s value.
- The increase in Ethereum’s value of RMB 94.9 million was not recognized as a revaluation gain.
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Frequently Asked Questions
Why did Meitu invest in cryptocurrencies?
Meitu cited long-term asset diversification and preparation for future blockchain opportunities as key reasons. The company emphasized that it did not intend to engage in short-term trading.
How did cryptocurrency investments affect Meitu’s financial results?
Due to accounting rules, the decline in Bitcoin's value led to an impairment loss of RMB 112 million. Increases in Ethereum's value were not reflected as gains.
What are Meitu’s main revenue sources?
The company earns through online advertising, premium subscriptions, internet value-added services, and influencer marketing solutions. Subscription services showed particularly strong growth.
Is Meitu’s user base growing?
Overall MAUs declined by 5.8%, but some apps like Meiyan Camera saw slight growth. The company is focusing on monetizing its existing user base through subscription models.
What is Meitu’s involvement in SaaS?
Through investments and subsidiaries, Meitu offers skin analysis technology and ERP solutions to beauty retailers, expanding its reach beyond consumer apps.
Will Meitu continue investing in cryptocurrencies?
While the initial strategy was long-term, future decisions will likely depend on market conditions and regulatory developments. The company has not announced further purchases.