Guojin Securities initiated coverage on MEITU (01357) with a "Buy" rating and a target price of HK$11.73, highlighting its core value lies in its deep "functional depth + national brand recognition." The report emphasizes that MEITU's imaging toolbox model remains resilient even in the AI era, with strong growth driven by subscription-based monetization. The firm's second growth curve is expected to focus on overseas expansion and productivity tools.
Key insights from Guojin Securities include: 1. **AI Disruption Misconception**: The market underestimates MEITU's resilience, citing four common misconceptions: - **Error Tolerance Fallacy**: Facial editing and consistency generation require precision, where current multimodal AI models lack stability. - **Efficiency Over Experience Fallacy**: Photo editing is inherently enjoyable; AI automation risks diminishing user engagement and satisfaction. - **Natural Language UI Fallacy**: Graphical interfaces (e.g., drag-and-drop) outperform text-based commands in accuracy and usability. - **Fragmented Features Fallacy**: MEITU’s integrated workflow (cropping, filters, beautification, stickers, etc.) caters comprehensively to user needs.
2. **Strong Historical Growth**: MEITU’s imaging and design products grew at an 85.3% CAGR (2018–2024), with subscription revenue surging from RMB 50 million to RMB 2.09 billion. MAU, ARPU, and payment conversion rates rose ~2%, 25%, and 519%, respectively (2020–2024).
3. **Future Growth Levers**: Overseas expansion and productivity tools could drive MAU growth, while AI-enhanced features and user base upgrades may lift ARPU. MEITU’s "functional depth + social attributes" could push payment conversion rates above 10%.
**Risks**: Potential disruption by AI foundation models; intensified competition from tech giants and smartphone manufacturers.
For more港股 insights, visit [Zhitong Finance](www.zhitongcaijing.com).
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