On March 15, 2024, Meitu (1357.HK) unveiled its 2023 annual financial results: The total revenue reached RMB 2.7 billion, marking a year-over-year growth of 29.3%. The adjusted net profit attributable to owners of the company was RMB 370 million, a year-over-year increase of 233.2%.

The surge in total revenue and net profit is primarily attributed to the growth in core business revenue driven by AI. Meitu processes billions of images and videos daily, with approximately 83% utilizing AI functions.

In 2023, Meitu reported a revenue of RMB 1.33 billion from its image, video and design product business, primarily driven by paid subscriptions, marking a year-over-year growth of 52.8%. The company's advertising business generated a revenue of RMB 760 million, up by 20.5% compared to the previous year. Meanwhile, its beauty industry solution business brought in a revenue of RMB 570 million, a significant increase of 29.1% year-over-year.

The image, video, and design products business has grown by 52.8% year-over-year, with over 9.11 million paid members, setting a new record

In 2023, Meitu, driven by AI, crafted exceptional image, video and design products. The annual revenue for this business sector reached RMB 1.33 billion, marking a year-over-year growth of 52.8%. This was a significant factor contributing to the substantial increase in the adjusted net profit attributable to owners of the company. The primary revenue for this business comes from subscriptions.

AI technology brings a more engaging experience to Meitu users and significantly boosts their efficiency in creating digital content. The subscription rate for our suite of image products continues to rise rapidly, thereby driving a substantial increase in revenue. As of December 31, 2023, the number of paid members reached 9.11 million, with a year-over-year increase of 62.3%.

The revenue from the beauty industry solution business increased by 29.1% year-over-year, driving the digital upgrade of the industry

In 2023, the revenue from solutions for beauty industry grew by 29.1% year-over-year to approximately RMB 570 million, mainly due to the increase in cosmetic supply chain management services.

Meitu offers AI skin analysis solutions through MeituEve to skincare brands, medical beauty institutions, and beauty salons. MeituEve products are currently installed in over 4,300 stores globally and have established strategic partnerships with renowned brands such as Christian Dior, Shiseido, Avon, and Fawawa.

One of Meitu’s joint-venture companies, Meidd, is providing Enterprise Resource Planning (“ERP”) and supply chain solutions for over 10,000 cosmetic stores in China, which effectively optimize purchasing decisions for cosmetics.

Use the robust Meitu vision model for both life and productivity applications

Centering on the core strategies of “Productivity and Globalisation”, Meitu launched MiracleVision in June 2023 as the cornerstone and completed an AI ecosystem that consists of algorithm support, platforms and software products.

At present, MiracleVision has successfully registered under the “Interim Measures for the Management of Generative Artificial Intelligence Services” and is accessible in all Meitu products. Moreover, it has fully opened its model capabilities to industry clients and partners through various forms such as API, SDK, SaaS, and model training.

Leveraging the power of MiracleVision, Meitu's image, video and design products have achieved impressive results. In 2023, X-Design saw its revenue surpass RMB 100 million, a staggering increase of 229.8% compared to the previous year. Action has become the new darling of talking video creators. The user base of WHEE continues to grow. Meitu AI Photo Editing has been a game-changer in the commercial photography industry, with over 500 million photos retouched throughout the year.

AI drives MAU to grow 2.6% year-over-year to 250 million

As of December 31, Meitu's MAU reached 250 million, stably growing 2.6% year-over-year.

Our users process hundreds of millions of images and videos daily using our apps, and approximately 83% of these are enhanced by our broad range of AI features.

According to QuestMobile, the Meitu App and BeautyCam have maintained their top rankings in the Photo Beautification and Camera categories respectively for 8 consecutive years.

AI is driving Meitu to accelerate its expansion into the global market. To date, we have rolled out our image products in 195 countries and regions. The Meitu App, BeautyCam, and Wink have achieved top rankings in application lists across multiple countries and regions. According to data.ai, in January 2024, Meitu ranked third on the list of China's non-game companies regarding revenue from overseas markets.

Diving deeper into AI, Meitu invested RMB 640 million in research and development, representing 23.6% of total revenue

In 2023, Meitu invested RMB 640 million in research and development, representing 23.6% of total revenue.

Meitu remains actively engaged in AI exploration. Currently, it has registered 457 patents, obtained 238 copyrights for software products, and garnered numerous accolades and advancements in the field of AI.

In 2023, Meitu's “Key Technologies and Industrialization of Compact Computer Vision Analysis” won the second prize of the Ministry of Education Technology Invention Award. MT Lab published 6 academic papers in top international conferences and journals such as CVPR 2023, NeurlPS 2023, ACM MM 2023, and TPAMI. By the end of 2023, MT Lab had published a total of 48 academic papers.

To further its AI capabilities, Meitu has started to nurture the ecosystem around generative AI through minority investments, including a company that offers AI chips and related software solutions for AI training and inference, a multimodal large-scale model company, and an AI-native marketing technology firm.

In February 2024, Zcool, the most influential community in Mainland China’s design and creative community, officially became a member of Meitu. We will jointly build ecosystem around generative AI to provide better services for visual creative designers.

Meitu’s Chief Financial Officer Gary Ngan said, “In 2023, Meitu experienced another breakthrough year. Our robust financial performance underscores the pivotal role our AI-driven products play in the digital sector and the swiftly evolving creator economy. Additionally, it highlights our strong product innovation capabilities and successful execution of our Productivity and Globalization strategy.”