Meitu's AI-Powered Global Expansion: A High-Growth Play in the New Creative Economy

In the rapidly evolving digital content creation (DCC) landscape, Meitu Inc. (1357.HK) has emerged as a standout player, leveraging artificial intelligence to redefine both its monetization strategies and global scalability. With a 71.3% year-over-year surge in adjusted net profit for H1 2025 and a 38.4% growth in paid subscribers to 12.61 million by 2024, the company is demonstrating how AI-driven innovation can transform a once-niche photo-editing app into a global leader in the creative economy.

AI as the Core of Monetization and Margin Expansion

Meitu's financial success is rooted in its strategic integration of AI across its product suite. The company's core AI-enhanced photo, video, and design tools generated a 57.1% year-over-year revenue increase to RMB 2.09 billion in 2024, driven by high-margin subscription models. This shift to recurring revenue—exemplified by tools like DesignKit and Kaipai—has created a flywheel effect: enhanced user experience attracts more subscribers, while AI-powered features deepen engagement and retention.

DesignKit, a productivity tool for commercial photography and design, exemplifies this approach. With 1.13 million subscribers and RMB 200 million in 2024 revenue (doubling from the prior year), it targets professionals seeking AI-driven efficiency. Similarly, Kaipai's 1 million monthly active users in video podcasting highlight Meitu's ability to capture underserved markets with specialized tools. These products not only diversify revenue streams but also reinforce Meitu's AI moat, as competitors struggle to replicate its proprietary algorithms and user-centric design.

Global Scalability: From China to the World

Meitu's international expansion is equally compelling. By 2024, its global monthly active users outside mainland China grew 21.7% to 94.51 million, with the Wink app—featuring AI Art and AI Hairstyle—ranking atop the App Store in markets like Kenya, Indonesia, and Vietnam. This success is underpinned by localized operations, including teams in the U.S. and Australia, and a product roadmap tailored to regional preferences.

The company's global MAU now exceeds 266 million, a testament to its ability to scale AI-driven tools across cultures. For instance, AI-powered features like “AI Wrinkle Removal” resonate with aging populations in Asia, while “AI Clothes Colors” appeals to fashion-conscious users in Europe and North America. This adaptability positions Meitu to capitalize on the $1.2 trillion global DCC market, where demand for AI-enhanced tools is projected to grow at a 25% CAGR through 2030.

R&D as a Strategic Investment

Meitu's commitment to R&D—spending RMB 910 million in 2024, a 43.3% increase—fuels its AI leadership. The company's Meitu Image Research Institute (MT Lab) has published over 50 academic papers and won international AI competitions, ensuring its algorithms remain cutting-edge. Its MiracleVision large model, already deployed in advertising, e-commerce, and gaming, is being augmented with complementary AI models to enhance performance and unlock new use cases.

This focus on innovation creates a durable competitive edge. Unlike generic AI tools, Meitu's models are trained on proprietary datasets, enabling hyper-realistic outputs that cater to niche creative workflows. For example, MiracleVision's ability to generate photorealistic textures for e-commerce product listings has attracted major brands, driving high-margin B2B revenue.

The Investment Case: High-Margin Recurring Revenue and Untapped Demand

Meitu's business model is a textbook example of a high-margin, scalable SaaS play. With gross profit margins exceeding 80% in its core AI products and a 12.3% year-over-year revenue increase in H1 2025, the company is demonstrating the profitability of AI-driven DCC. Its subscription-based approach ensures recurring cash flows, while the low marginal cost of AI deployment allows for margin expansion as user bases grow.

For investors, the key catalysts are clear:
1. Global Market Capture: With 70% of Meitu's revenue still coming from China, its international expansion represents a massive untapped opportunity.
2. AI Moats: Proprietary algorithms and a first-mover advantage in AI-enhanced creative tools create a high barrier to entry.
3. Margin Resilience: Operating leverage from scalable AI infrastructure ensures profitability even as R&D investments grow.

Conclusion: A Compelling Long-Term Bet

Meitu's AI-powered transformation—from a photo-editing app to a global DCC platform—positions it as a prime beneficiary of the AI revolution in creative industries. With a 71.3% surge in adjusted net profit in H1 2025 and a clear roadmap for international expansion, the company is not just adapting to the new economy—it's leading it. For investors seeking exposure to AI-driven margin expansion and global scalability, Meitu offers a rare combination of innovation, execution, and financial discipline.

In a world where AI is redefining creativity, Meitu's stock is more than a speculative play—it's a calculated bet on the future of digital content creation.