Meitu Inc. rose more than 3% as Morgan Stanley said demand for Meitu Design Studio was better than expected, and the market is highly focused on the company's overseas expansion.

Meitu (01357) rose more than 3%, up 3.24% at the time of writing to HK$2.87, with a turnover of HK$39.23 million. Morgan Stanley released a research report saying that Meitu's investor day showcased its three generative AI-driven products: DesignKit, Action, and MOKI. The firm expects that the flagship product DesignKit will contribute about Rmb200mn of domestic revenue in 2024, double that of 2023, and the management believes it is a highlight of the product release in one and a half years. The product's gross margin is 60%-70%, and the demand is better than expected. Investors are now very focused on Meitu's overseas expansion, and the management expects overseas markets to be the main focus of selling its driving products. The firm continued that compared with its overseas peers, Meitu believes its advantages lie in its ability to iterate quickly, strong product management, and deep verticals (starting from e-commerce). Compared with peers such as Capcut that need super-large cloud service providers, Meitu believes its advantages lie in high flexibility, usability, and independence from large platforms.