FAST NEWS: Meitu adjusted profit triples on rising VIP subscriptions

The latest: Chinese beauty app Meitu Inc. (1357.HK) announced on Sunday that, excluding non-operating items, it expects to report a non-IFRS adjusted profit of between 330 million yuan ($45.9 million) and 370 million yuan for last year, up 200% to 230% from 2022.

Looking up: The big profit jump was driven by rapid growth in paid subscribers for its AI-backed photo, video and design products business.

Take Note: Meitu still holds earlier investments of about 940.5 bitcoins and about 31,000 ether, whose volatility could affect its future profits.

Digging Deeper: Founded in 2008 and listed in Hong Kong in 2016, Meitu began as operator of a consumer-oriented beauty app for editing photos. It started providing B2B services to businesses like cosmetic shops and photo studios in 2022. The company’s revenues have grown sharply since it made the shift to business customers, and it recorded its first-ever net profit of 94.14 million yuan in 2022. The company said it expects to report its net profit jumped 260% to 310% last year due to strong growth in VIP subscriptions and a one-time gain related to its cryptocurrency investments.

Market Reaction: Meitu shares rose on Monday to close up 2.2% at HK$2.76 by the midday break. The stock now trades in the middle of its 52-week range.

Translation by A. Au

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