Meitu Inc. close all positions focus on core business stock price big rise Crypto Assets

On December 12th, the Hang Seng Index pumped by 1.2%, closing at 20397 points; the Hang Seng Technology Index pumped by 1.53%, breaking through the 4600 point mark.

Guotai Junan’s chief strategist Fang Yi said that the bottom of the Chinese stock market has appeared, and the conditions for a “transformation bull” are forming. He pointed out that capital market reform, debt resolution, and the promotion of reform and stable asset prices are the new “three arrows” for the construction of China’s economy, and he is optimistic about the development potential of Hong Kong stocks’ internet, manufacturing, and cultural export, as well as self-enjoyment type consumption.

In terms of individual stocks, Meitu Company cleared its position in cryptocurrencies, and combined with the hot AI concept in recent days, the stock price rose by more than 13%, reaching a new high in the near term; driven by policy expectations and approaching the Spring Festival, Hong Kong consumer stocks are generally pumping, with Helen’s share price rising by more than 16% at one point during trading.

Meitu’s stock price surges more than 13%

On December 12th, Meitu’s stock price rose by about 13% to HKD 3.42, with a turnover of nearly HKD 1 billion and a total market value of HKD 15.5 billion. According to reports, Meitu has sold all of its cryptocurrencies and turned to focus on AI applications in the field of imaging and design.

According to the announcement of Meitu Company on December 4th, the company sold all the cryptocurrencies for a total cash consideration of approximately $180 million and made a profit of approximately $79.63 million (about 578 million yuan), a gain of 80%! The company plans to use about 80% of the proceeds for special dividends and the remaining funds for the development of its main business.

The clearance of cryptocurrencies is seen as a significant improvement in corporate governance for Meitu, whose stock price has often deviated from fundamentals due to cryptocurrency fluctuations. Analysts believe that with the strong growth of paid subscriptions in the image and design product business, Meitu will focus more on the development of AI. At the same time, the improvement of liquidity in the Hong Kong stock market has helped drive Meitu and other AI application targets to become investment hotspots.

In addition, Meitu has launched three generative AI-driven products, including Meitu Design Studio, Open Shoot, and MOKI. Morgan Stanley expects Meitu Design Studio’s domestic revenue to reach 200 million yuan by 2024, twice that of 2023, with a gross margin of about 60% to 70%. Meitu has realized about 1.3 billion yuan through the clearance of cryptocurrencies, providing important support for business expansion and shareholder returns.

Consumer stocks rebound

Driven by the expected favorable policies for consumption, market funds continue to increase their positions in the beer and catering sectors. Beer stocks have performed well, with China Resources Beer, Tsingtao Brewery, and Budweiser APAC’s stock prices pumping. Similarly, catering stocks have shown strength, with Haidilao, Jiumaojiu, and HaiDiLao recording varying degrees of increases, and Haidilao’s stock price once rising by more than 16% intraday.

The Political Bureau of the CPC Central Committee held a meeting on December 9, explicitly proposing to vigorously stimulate consumption, improve investment efficiency, and comprehensively expand domestic demand.

Industry insiders believe that expanding domestic demand while boosting consumption and improving people’s livelihoods will help enhance residents’ willingness and ability to consume. Data shows that under policy support, residents’ consumption demand continues to be released, with a year-on-year increase of 4.8% in the total retail sales of consumer goods in October and a year-on-year increase of 3.5% in the first 10 months of this year, demonstrating the positive role of policy stimulus in the recovery of the consumption market.

With the arrival of the year-end peak consumption season, many places have launched a new round of consumer voucher distribution activities to support consumption in areas such as catering and tourism. Analysts believe that with the approaching of the Spring Festival and the expectation of policy heating up, consumption may experience a new round of rebound. Future policy tools may include measures such as first-time car purchase subsidies and birth subsidies.

(Article source: China Fund News)

Source: East Money

Author: China Fund News