Meitu (1357) AI Stock Analysis

• Market Cap: HK$36.37B
• Dividend Yield: 2.92%
• Average Volume (3M): 72.77M
• Price to Earnings (P/E): 37.1
• Beta (1Y): 1.53
• Revenue Growth: 15.57%
• EPS Growth: 94.36%
• Country: HK
• Employees: 2,416
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 0.09
• Shares Outstanding: 4,586,179,000
• 10 Day Avg. Volume: 47,894,230
• 30 Day Avg. Volume: 72,773,875
• PEG Ratio: 0.12
• Price to Book (P/B): 2.50
• Price to Sales (P/S): 3.76
• P/FCF Ratio: 17.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$12.80
• Price Target Upside: 75.80% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: HK$9.50 ▲(30.49% Upside)

Meitu's strong financial performance is the most significant factor, supported by robust revenue growth and profitability. However, technical analysis indicates bearish momentum, and the high P/E ratio suggests potential overvaluation, which tempers the overall score.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health and expansion.

Profitability Margins

High profitability margins reflect efficient operations and cost control, enhancing the company's ability to reinvest in growth and weather economic fluctuations.

Balance Sheet Health

A strong balance sheet with low leverage provides financial flexibility, reducing risk and enabling strategic investments and growth opportunities.

Negative Factors

Free Cash Flow Conversion

Lower free cash flow conversion can limit the company's ability to fund operations and growth initiatives, potentially impacting long-term sustainability.

Stock Performance

Persistent bearish momentum in stock performance may reflect market concerns, potentially affecting investor confidence and capital raising abilities.

Valuation Concerns

High valuation ratios can signal overvaluation, potentially limiting upside and increasing vulnerability to market corrections, affecting long-term investor returns.

Meitu Business Overview & Revenue Model

Company Description

Meitu Inc. is a Chinese technology company that specializes in developing image processing software and hardware, primarily focused on mobile applications. Founded in 2008 and publicly listed in 2013, Meitu is best known for its flagship product, the Meitu app, which offers advanced photo editing and beautification features. The company operates in several sectors including social media, mobile applications, and artificial intelligence, and also manufactures smartphones and other electronic devices that integrate its software capabilities.

How the Company Makes Money

Meitu generates revenue through multiple streams, including in-app purchases, advertising, and hardware sales. A significant portion of its income comes from the sale of virtual goods and features within its mobile apps, where users can pay to access premium editing tools and effects. The company also earns money through advertising partnerships within its apps, leveraging its large user base to attract brands looking to reach a younger demographic. Additionally, Meitu's hardware sales, which include smartphones and other devices that feature its software, contribute to its overall earnings. Collaborations with other tech companies and brands for promotional campaigns further bolster its revenue.

Meitu Financial Statement Overview

Summary

Meitu demonstrates strong financial performance with impressive revenue growth, high profitability margins, and a robust balance sheet. The company maintains low leverage, ensuring financial stability, while cash flow generation supports its strategic initiatives.

Income Statement

The company has shown impressive revenue growth with a consistent upward trajectory over the years, achieving a 24% increase from 2023 to 2024. The gross profit margin is strong at approximately 68.7%, indicating effective cost management. Additionally, the net profit margin has increased significantly to 24.1% in 2024, reflecting improved profitability. EBIT and EBITDA margins have also improved, showcasing enhanced operational efficiency.

Balance Sheet

The balance sheet shows a healthy equity position with a debt-to-equity ratio of 0.06, indicating low leverage and financial stability. Return on Equity (ROE) has improved to 16% in 2024, demonstrating effective utilization of equity to generate profits. The equity ratio stands at a solid 71.3%, underscoring strong financial health and low reliance on debt.

Cash Flow

Operating cash flow has shown robust growth, with the operating cash flow to net income ratio at 0.93, indicating strong cash generation relative to net income. Free cash flow has significantly increased, reflecting effective cash management and investment strategies. However, the free cash flow to net income ratio is slightly below 1, suggesting room for improvement in converting income into cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.54B	3.34B	2.70B	2.09B	1.67B	1.19B
Gross Profit	2.58B	2.29B	1.66B	1.19B	1.13B	793.87M
EBITDA	713.93M	581.69M	320.01M	-47.03M	-41.23M	-47.66M
Net Income	898.77M	805.18M	378.29M	94.14M	-44.51M	-40.97M
Balance Sheet
Total Assets	6.71B	7.05B	5.77B	5.00B	4.75B	4.51B
Cash, Cash Equivalents and Short-Term Investments	2.63B	2.96B	1.31B	1.34B	1.23B	2.03B
Total Debt	226.79M	318.35M	90.28M	38.15M	48.54M	33.78M
Total Liabilities	1.93B	2.01B	1.65B	1.29B	1.23B	939.33M
Stockholders Equity	4.79B	5.03B	4.11B	3.77B	3.52B	3.55B
Cash Flow
Free Cash Flow	957.92M	699.48M	356.82M	183.58M	-60.98M	-262.35M
Operating Cash Flow	983.40M	745.81M	413.23M	233.99M	-26.32M	89.21M
Investing Cash Flow	484.70M	7.17M	-644.63M	-16.77M	-330.42M	273.44M
Financing Cash Flow	-793.23M	-104.07M	-81.16M	-37.03M	-51.24M	-43.47M

Meitu Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.28
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1357, the sentiment is Positive. The current price of 7.28 is below the 20-day moving average (MA) of 7.34, below the 50-day MA of 7.91, and below the 200-day MA of 8.06, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 58.49 is Neutral, neither overbought nor oversold. The STOCH value of 80.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1357.

Meitu Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1024	75 Outperform	HK$326.12B	17.04	25.67%	―	11.37%	16.74%
1357	66 Neutral	HK$36.37B	37.13	19.44%	2.92%	15.57%	94.36%
9888	63 Neutral	HK$377.87B	45.36	3.29%	―	-2.92%	-57.12%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9898	60 Neutral	HK$20.49B	6.22	12.49%	8.13%	-1.40%	22.37%
2390	53 Neutral	HK$2.35B	21.72	2.39%	―	-23.80%	―
1896	49 Neutral	HK$8.12B	99.01	0.82%	4.71%	-7.61%	-90.51%

Meitu Corporate Events

Meitu Raises US$250 Million via Convertible Bonds and Seals Strategic Cooperation with Subscriber

Meitu has completed the issuance of US$250 million in convertible bonds under its general mandate, with closing taking place on 31 December 2025 and the bonds fully subscribed by a single investor referred to as the Subscriber. In tandem, Meitu and the Subscriber have signed a business cooperation framework covering a range of commercial collaboration areas, with detailed implementation agreements to follow and transaction amounts to be calculated from the dates of those specific contracts, signalling a deeper strategic relationship beyond financing. The company plans to deploy the roughly US$249.6 million in net proceeds for general business purposes, while the fair value of the bonds at closing is expected to exceed their principal by an estimated US$69 million to US$77 million; this excess will be booked as a one-off, non-cash share-based compensation expense under IFRS 2, affecting reported earnings but not cash flow. Upon full conversion of the bonds at HK$6.00 per share, the Subscriber would own about 6.82% of Meitu’s enlarged share capital, diluting existing shareholders but strengthening the company’s capital base and potentially bolstering its strategic positioning through the new cooperation arrangements.

The most recent analyst rating on (HK:1357) stock is a Buy with a HK$14.10 price target. To see the full list of analyst forecasts on Meitu stock, see the HK:1357 Stock Forecast page.

Meitu Grants Share Awards to CEO and Employees

Meitu, Inc. announced the grant of 4,500,000 Share Awards to its CEO, Mr. Wu Zeyuan, as part of the 2024 CEO Incentive Plan, which aligns with market practices for internet companies. Additionally, 253,065 Share Awards were granted to other employees. The grants aim to align the interests of the grantees with the company, recognize contributions, and retain talent, with no performance targets attached.

The most recent analyst rating on (HK:1357) stock is a Buy with a HK$14.10 price target. To see the full list of analyst forecasts on Meitu stock, see the HK:1357 Stock Forecast page.