Once-Dominant App Struggles Beyond Blockchain Bets
As China's pioneering beauty app developer, Meitu once commanded a market valuation nearing $10 billion during its 2016 Hong Kong IPO. Today, the company makes headlines primarily for its controversial $100 million cryptocurrency investments amidst collapsing digital asset prices.
The Crypto Rollercoaster
In 2021, Meitu became the first Hong Kong-listed firm to add Ethereum and Bitcoin to its balance sheet through three aggressive purchasing rounds:
| Cryptocurrency | Amount Invested | Tokens Acquired | Avg Purchase Price |
|---|---|---|---|
| Bitcoin | $49.5M | 940.885 BTC | $52,600 |
| Ethereum | $50.5M | 31,000 ETH | $1,629 |
The timing proved disastrous. By June 2022:
- Bitcoin plummeted 66% to $18,000
- Ethereum crashed 89% to $1,000
This resulted in $45.6M in recognized impairment losses (≈¥305M), contributing to H1 2022 net losses exceeding ¥274.9M. Despite this, executives maintain their "long-term blockchain optimism," refusing to liquidate positions.
Core Business Challenges
Meitu's struggles predate its crypto ventures:
Declining User Base
- Monthly active users (MAU) dropped from 456M (2016) to 231M (2021)
- Competitors like B612 Kaji and XiuTu eroded market share
Failed Monetization Attempts
- Smartphones – Licensed to Xiaomi after poor sales
- E-commerce – Shuttered Meitu Beauty Cross-border platform
- Social/Medical Beauty – No meaningful traction achieved
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VIP Subscriptions: A Glimmer of Hope?
The company pins hopes on its SaaS and subscription services, which grew 146.9% YoY to ¥520M (2021). This now represents:
- 31% of total revenue
- Second only to advertising (¥760M)
CFO Yan Jinliang asserts this "second curve" proves Meitu's commercial viability. Recent product launches include:
- Wink (video editor)
- Meitu Design Studio
- ID Photo Pro
Metaverse Ambitions
CEO Wu Xinhong acknowledges the platform's need to transition from static images to dynamic video content while maintaining blockchain investments as "digital tickets to the metaverse."
FAQ
Q: Why hasn't Meitu sold its cryptocurrencies?
A: Executives consider price fluctuations temporary, emphasizing long-term blockchain utility over short-term losses.
Q: What's next for Meitu?
A: The company will likely continue balancing SaaS expansion with high-risk crypto holdings while exploring AR/VR applications.
Q: How are investors reacting?
A: Shares plunged 10.58% post-impairment announcement, trading below HK$1 in July 2022—a 90% drop from 2017 peaks.
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The Road Ahead
With its core apps aging and crypto bets underwater, Meitu faces existential questions. Can subscription services offset digital asset losses? Will metaverse investments pay off before cash reserves deplete? The answers may determine whether this former tech darling fades into obscurity or stages a improbable comeback.