"Meitu," primarily known for its photo-editing apps, has made a substantial profit from its unconventional investment in cryptocurrencies.
On December 4th, Meitu announced the complete divestment of its cryptocurrency holdings, netting approximately 571 million yuan (RMB)—surpassing its 2023 net profit of 378 million yuan. This windfall highlights how its side ventures have overshadowed its core business.
Meitu's Cryptocurrency Journey
Initial Investments (2021):
- Purchased 31,000 Ether (ETH) (~$50.5M) and **940 Bitcoin (BTC)** (~$49.5M).
- Became the first Hong Kong-listed company to publicly allocate funds to crypto assets.
Exit Strategy (2024):
- Sold all holdings for a combined **$180M** (ETH: ~$100M | BTC: ~$80M).
- No remaining crypto assets on its balance sheet.
Market Volatility & Recovery
Despite early setbacks—2022 crypto winter led to:
- 1.12 billion RMB fair value loss.
- ETH/BTC impairments: 86.6M RMB and 198.2M RMB, respectively.
By 2023, losses partially recovered (~185M RMB). The 2024 rally (BTC surpassing $103,000) provided an optimal exit window.
Reinvesting Profits
- 80% of net proceeds allocated as special dividends.
- Remaining funds to boost subscription-based imaging/design products, which grew 52.8% YoY in 2023 (13.3B RMB revenue).
Business Growth & AI Focus
H1 2024 Highlights:
- Revenue: 9.3B RMB (+54.5% YoY).
- R&D spend: 425M RMB (+44.52% YoY).
- 108.1M paid subscribers (4.2% penetration).
👉 Explore how AI transforms photo editing
Strategic Priorities
- Avoiding "model arms races": Focused on competitive AI applications.
- Video models: No direct competition with global giants.
Market Response
Stock rose 6.29% post-announcement (3.04 HKD/share).
FAQs
1. Why did Meitu invest in cryptocurrencies?
Meitu sought to diversify its reserves amid rising crypto adoption, leveraging its early-mover advantage as a listed company.
2. How did market trends affect Meitu’s crypto holdings?
The 2022 crash caused significant losses, but 2024’s bullish rally enabled profitable exits.
3. Where will Meitu reinvest its crypto profits?
Primarily in dividends and core subscription services, with continued AI development.
4. What’s Meitu’s stance on AI model development?
Prioritizes practical applications over competing in foundational model development.
5. How does Meitu’s stock performance reflect its strategy?
Investors responded positively to its profitable crypto exit and sustainable growth plans.
👉 Learn about crypto investment strategies
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