Author: Zhang Hanjing; Source: Qujie Business

Since September this year, the price of Bitcoin has been soaring It rose and even exceeded US$100,000 per coin on December 5.

Meitu Company (1357.HK) took advantage of this period to decisively sell off all the cryptocurrencies it held. According to the announcement, Meitu began selling its cryptocurrency holdings in November 2024, and all of them had been sold as of December 4, with a total profit of approximately US$79.63 million (approximately 571 million yuan).

Many companies have personally ended up "speculating on currencies" , but few companies like Meitu, whose main business has nothing to do with cryptocurrency, can ultimately make a fortune from it.

Meitu, which has been investing in cryptocurrency since 2021, why did it sell off all its cryptocurrency holdings this time? Does this also mean that Meitu will further "return to its main business"?

Meitu’s investment in cryptocurrency did not make big profits from the beginning. In 2021, Meitu spent about US$100 million to purchase Bitcoin and Ethereum. However, not long after Meitu entered the game, the currency circle ushered in multiple rounds of plummets due to various reasons such as regulation and Musk's negative remarks.

Since then, the unit price of Bitcoin has mainly fluctuated between US$30,000 and US$60,000, and fell to about US$16,000 in 2023.

At that time, some industry insiders and investors questioned that cryptocurrency risks were high, and the U.S. This move appears to be too radical in the current market environment, and some people question Meitu as "speculating on currency speculation" and "not doing its job properly." Meitu, which bought at high prices, soon suffered from Bitcoin; in the first half of 2022, Meitu's net loss reached 274.9 million yuan to 349.9 million yuan, mainly due to the depreciation of cryptocurrency.

Bai Wenxi, chief economist of the Enterprise Capital Alliance, believes that cryptocurrency is not legal in China, and "coin speculation" seems to be a gray area. The legitimacy of the circle is questionable, so the risk is higher; in addition, a company’s excessive concentrationFocusing on currency speculation may distract the company's management, thereby neglecting the deep cultivation and expansion of the main business.

In fact, this is not the first time that Meitu has "not done its job properly"; before the speculation, Meitu relied on Meitu Xiuxiu's huge user base. Explored multiple “side hustles”.

The most successful exploration was the "meitu mobile phone" that was popular among women at that time. In 2017, the sales of Meitu mobile phones, which are based on the camera and beauty function, exceeded 1.57 million units, and the revenue contribution was about 3.7 billion yuan, accounting for more than 90% of the total revenue. However, as the competition in the smartphone market became increasingly fierce, by 2018, Meitu’s mobile phone business suffered a loss of about 500 million yuan. At the end of 2018, after Meitu licensed its mobile phone brand to Xiaomi, it sadly withdrew from the mobile phone market.

In addition to mobile phones, Meitu has also launched Social product "Flash Chat" and short video product "Meipai"; invested in game companies, launched H5 casual game platform "Meitu Game Box" and women's mobile game "Meimei Store"; also developed a beauty e-commerce platform , trying to get a share of the new consumer retail field. However, these "side businesses" are rarely mentioned in Meitu's financial reports, and almost all end sadly.

Since 2019, Meitu’s main revenue pillar has changed from “smart hardware” to “online advertising”, mainly relying on its Meitu Xiuxiu, beauty cameras and other products to earn advertising fees and membership fees. According to financial report data, the number of monthly active users of Meitu's applications is 257 million. In the first half of this year, Meitu Company (1357.HK) total revenue was 1.62 billion yuan, a year-on-year increase of 28.6%; of which, advertising revenue was 410 million yuan, a year-on-year increase of 410 million yuan. Growth was 18.3%, accounting for 25.5% of total revenue.

It is worth mentioning that Meitu had previously "cross-border currency speculation" and was closely related to co-founder Cai Wensheng Related. While serving as the chairman of Meitu, Cai Wensheng is also an active angel investor and has long been interested in blockchain and digital currencies. He invested in the cryptocurrency exchange OKEx as early as 2014. Cai Wensheng publicly stated in 2021 that Meitu will continue to deploy blockchain, and the purchased cryptocurrencies such as Ethereum and Bitcoin will serve as value reserves for Meitu's long-term development blockchain strategy.

Under the influence of Cai Wensheng, Meitu affiliated companies have already been involved in the blockchain industry, invested in blockchain companies, and were also involved in the ICO controversy. Purpose BEC (USD currency) was once considered to be Meitu’s blockchain project.

However, Cai Wensheng has resigned from all positions at Meitu in June 2023, founder Wu Xinhong (Wu Zeyuan) took over as chairman; Wu Xinhong helped Meitu avoid many detours in the AIGC era, and clearly proposed the strategic goal of "productivity and globalization".

After the sale of cryptocurrency, the board of directors of Meitu intends to use approximately 80% of the net profit from the sale to pay special cash dividends at a price of approximately HK$0.109 per share; and according to Meitu Picture company 2024 half The annual report shows that as of the end of June this year, major shareholder Cai Wensheng directly and indirectly held 1.068 billion Meitu shares. Based on this calculation, he can receive a dividend of approximately HK$116 million (approximately 108 million yuan). .

It is worth mentioning that one day after Meitu announced the sale of all virtual currencies, on December 6, Bitcoin The price of the coin quickly began to dive, once falling below $90,000 per coin.

Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, believes that Meitu’s decision to enter Bitcoin was quite bold. This may be due to Meitu’s keen capture of market trends and its pursuit of new growth points. ; Wang Peng also said that when the price of Bitcoin rose sharply, Meitu chose to sell off all cryptocurrencies. It can be understood that the company made a rational choice in the current market environment, which not only reduced risks but also realized the return of funds.

In the announcement of this cryptocurrency sale, Meitu also mentioned that the remaining net proceeds from the sale of cryptocurrency will be used “as general working capital to expand the group’s imaging and video services based on paid subscriptions”. Design product business."

Bai Wenxi said that this means that Meitu will further return to and strengthen its main business and increase the research and development and commercialization of its core business.

In fact, after selling its mobile phone business, Meitu has been exploring new growth points for its main business. In the past two years, the paid business of imaging products has become the main revenue pillar of Meitu, accounting for nearly 60% at one time.

Among them, behind the rapid growth of paid revenue is the blessing of AI technology. Now it seems that the investment and layout of AI is probably the most valuable investment in Meitu’s original diversified layout. According to "Qujie Business", Meitu's AI deep learning capabilities began in 2013, and it has launched a "hand-painted selfie" with a prototype of AIGC. Before the big model trend broke out, Meitu mentioned in its financial report that it valued the AI ​​technology-assisted photo editing function.

In 2022, Meitu will provide access to its "Meitu Xiuxiu" and "Beauty Camera" It has added AI functions and also launched the short video beauty tool "Wink". In the first half of this year, the number of active paying users of Meitu was approximately 10.81 million. The increase in the number of members of these three applications contributed to 81% of the overall membership increase.

After releasing the self-developed Qianxiang model in 2023, Meitu has been improving the AI ​​creation of these three main apps.ability. Meitu founder Wu Xinhong once mentioned at the performance meeting that AIGC products have significantly improved the conversion of subscriptions, and AIGC capabilities have become the core of Meitu’s business.

Currently, Meitu Xiuxiu can use AI to remove clutter from passers-by, remove text, increase body shape, and beautify photos intelligently based on photos provided by users. Professional photo retouching software with higher accuracy is no match; however, for the popular “Wen Sheng Tu” function, Meitu Xiu Xiu’s experience is very limited.

"Qujie Business" observed that Meitu Xiu Xiu Wen Sheng Tu has very few choices in size and style, while similar AI applications such as Zhipu Qingyan, Doubao, etc., Wen Sheng Tu not only has a choice of styles but also Rich, it also supports detailed design such as light, lens and composition.

Some users once said that Meitu Xiuxiu’s AI text-generated pictures and AI-enlarged pictures can only reflect text descriptions. part, the effect is not accurate enough. This also means that the current Meitu Xiuxiu is likely to be unable to cover designers, media people and other audience groups who have a large demand for drawings.

In addition, many users have criticized Meitu Xiuxiu’s “automatic renewal after 7 days of free membership” function. Many users complained, "After trial membership, the annual membership was activated by default, and 128 yuan was directly deducted." "Beware of automatic renewal of Meitu! If you don't check the payment software, you won't even know that you have been deducted."

Many users also mentioned that Meitu Xiuxiu cannot be used without replenishing its membership. When managing facial files, “I can’t even control my own personal information, and I can’t delete it even if I want to.”

According to "Qujie Business" understands that Beauty Camera is the second most popular application under Meitu. It mainly focuses on taking photos, and also has functions such as AI matching of hair and makeup, and AI intelligent retouching. In the past year, the most discussed outside beauty camera site is the "AI photo" function that has become popular since last year. It is regarded as a "saving money savior" by many users who are in urgent need of ID photos. The classic ID photo template can be unlocked for 8.8 yuan.

However, there are also many users who feel that the photo realism is not enough when using other AI photo styles of the beauty camera; some netizens said, "The photos finally generated by the beauty camera AI do not look like the person themselves, and are not as good as Qingyan and Qingyan." You have to pay to wake up the photo.”

It is foreseeable that with the development and application of AI technology, Meitu’s competitors will no longer just be photo editing software; in the future, a pair of glasses will do the same. In the age of taking pictures, AI assistants will inevitably invade the hinterland of beautiful pictures.

Bai Wenxi believes that as the functions of Vincentian and Tushengtu are gradually iterated and improved, AI Vincentian applications such as Stable Diffusion and Midjourney have posed a challenge to the aesthetic that Meitu has always been proud of. ; In addition, AI tools such as Doubao and Zhipu Qingyan "The optimization of "Wen Sheng Tu" function may lead to the loss of users of Meitu Xiu Xiu and Beauty Camera.

According to According to Meitu’s 2023 mid-term report, the number of monthly active users of Meitu Xiuxiu and Beauty Camera is 130 million and 52 million respectively. , since then, Meitu no longer separately announces the number of monthly active users of its applications; however, QuestMobile data shows that in May this year, the number of monthly active users of Meitu Xiuxiu and Meiyan Camera was 100 million and 47 million respectively, compared with last year.

In addition to beautiful pictures and beautiful photos "Wink", which specializes in short video beauty, has also become the third largest application under Meitu this year. In the first half of the year, it achieved a 99% year-on-year monthly active growth.

Wink is a Meitu app. The video tool launched in 2022 will also be monetized through advertising and membership. Wink’s basic editing and coloring functions. It can be used for free, but higher-definition keying and resolution restoration require membership; Wink’s membership price is similar to that of Meitu Xiuxiu, and the annual subscription is 168 yuan.

Worth it. What I want to mention is that in September this year, after WeChat Moments officially supported Live photos, Wink quickly appeared on the App. 3rd place in Store District. In the eyes of many users, Wink is the "video version of Meitu Xiuxiu"; some users said that Wink is capable of simple portrait beautification and image quality restoration, but if you want to do more refined processing, Wink is not enough. In the end, you still need to use more professional editing software such as AE.

In addition, Wink’s monthly activity is still growing. Many of them are from overseas. Meitu mentioned in the financial report that Wink is here. The growth rate of monthly active users in other countries and regions has far surpassed that of the mainland. Recently, Meitu Xiuxiu has also topped the App Store lists in Indonesia, Thailand and other countries, mainly due to the popularity of AI functions on social media. .

According to "Qujie Business", in the first half of this year, the number of monthly active users of Meitu reached 258 million, a year-on-year increase of 4.3%; among them, the number of monthly active users in the mainland decreased by 0.2% year-on-year, but in the mainland other than The monthly active users in China and the region were 84 million, a year-on-year increase of 15%, accounting for 32.9% of the overall number of monthly active users.

Lin Xianping, secretary-general of the Cultural and Creative Research Institute of Zhejiang City University, believes that Meitu can maintain its current status overseas. The growth rate depends on many factors. First, the development trend of globalization and digital economy will continue to affect data. The usage habits and market demand of word tools; secondly, the strength and market strategies of competitors may have an impact on Meitu’s overseas growth; in addition, users’ needs and preferences for mobile photography and image processing may also change. “In the future. Over a period of time, we also need to observe changes in the market environment and user needs to determine the success of Meitu overseas.Whether it can maintain the current growth rate. ”

In addition to C-side business, Meitu’s To Business B is also developing. On the one hand, Meitu provides AI skin analysis solutions and ERP systems for medical beauty brands; in addition, Meitu has launched production tools "Meitu Design Studio" and "Meitu Design Studio" for the e-commerce and game advertising industries respectively. "Qimi", in addition to content production, Qimi can also solve the entire user process from production to delivery in one stop. In the first half of this year, the monthly activity of "productivity" tools such as Meitu Design Studio increased year-on-year. The growth rate of Meitu is 42%, which is much higher than the growth rate of "lifestyle" photo tools such as Meitu Xiuxiu.

Today's Meitu is more focused on its core business and is no longer the Meitu that "does not do its job properly". Chen Jianyi, senior vice president of Meitu Group, once said, “Meitu has been pursuing various trends for some time and has done a lot of businesses that we are not good at, such as e-commerce, medical beauty, and blockchain, which have a great impact on the company. The damage is still relatively large. ”

Chen Jianyi believes that the biggest lesson learned from the past is to do what you are good at. “Since Meitu is good at making tools, let’s make AI tools the best.” "In Chen Jianyi's view, AI can bring at least tens of billions of yuan in revenue to the company; currently, Meitu is still some distance away from this goal. While new technologies bring new opportunities, they will also bring new challenges. , next, how Meitu can use its "strong board" to meet the segmented needs of more circles of users and cope with the "challenges" of various AI applications deserves continued attention.