Meitu Inc.: Key takeaways from China Conference and recent investor feedback

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Meitu Inc.: Key takeaways from China Conference and recent investor feedback

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Meitu Inc.

Key takeaways from China Conference and

recent investor feedback

Maintain Rating: BUY | PO: 7.40 HKD | Price: 5.33 HKD

Encouraging ARPU uplift; more agent functions to launch 11 May 2026

We hosted Meitu’s IR Director at our 2026 China Conference in Shenzhen on 11 May Equity

(Mon). Mgmt. sees encouraging ARPU uplift potential across both products for leisure

and productivity tools. For leisure products, a rising portion of overseas subscribers Harry Zhuang >> Research Analyst

could drive ARPU uplift, given higher user subscription fees than in the domestic market. Merrill Lynch (Hong Kong)

For productivity tools, Mgmt expects the ARPU uplift to come mainly from higher AI +852harry.zhuang@bofa.com3508 7998

credits consumption on AI agent capabilities. Also, Meitu will host its Image Festival on Daley Li, CFA >>

17 Jun, and expects to launch more AI functions for productivity tools (e.g., DesignKit and Research Analyst

Merrill Lynch (Hong Kong)

Kaipai) featuring agent teams; with more to follow. We maintain our Buy rating on Meitu +852 3508 5365

given (1) its solid fundamentals driven by rising paying subscribers and operating daley.li2@bofa.com

leverage, and (2) an undemanding valuation of 0.5x PEG (vs. ~1.0x for leading US SaaS Owen Wang >>

Research Analyst

peers). Merrill Lynch (Hong Kong)

+852 3508 6533

Long-term GPM at c.70%; third party-API cost manageable owen.wang2@bofa.com

Mgmt. is confident in maintaining GPM at c.70% in the long term (vs. 73.6% in FY25),

despite rising AI credits consumption from productivity tools and lower revenue portion

of advertising revenue. We believe Meitu’s third-party API cost is manageable, as 1) its Stock Data