【Headline News】
MEITU (01357): Net profit expected to increase by approximately 200%-230% YoY as global strategy continues to advance
Recently, the company released its performance forecast for the next 23 years. In 2023, the company expects to achieve an adjusted net profit of approximately RMB 330-370 million, representing a YoY increase of approximately 200%-230%. MEITU made multiple purchases of Bitcoin and Ethereum on March 7, 2021, March 17, 2021, and April 8, 2021. The company is expected to turn losses into profits in the first half of 2023, mainly due to the revaluation of cryptocurrencies, which amounted to RMB 186 million.
Commentary: Although the significant increase in net profit is attributed to the rise in the value of virtual currencies, the company's fundamentals are also relatively strong. The growth of its core business is driven by AI subscription rates, and the performance of the company's AI products has exceeded expectations. MEITU's core product, the MEITU Xiuxiu app, keeps up with current aesthetic trends through frequent iterations. For example, in 2014, it introduced a height enhancement feature, in 2017, it launched the industry's first 3D facial sculpting technology, and in 2020, it introduced the &#34;hairline filling&#34; feature. In 2022-2023, it followed the AIGC trend and launched AI functions such as &#34;AI painting&#34; and &#34;AI design&#34;. AIGC has accelerated the increase in user payment rates, and the company's global strategy continues to advance: 1) The company's self-developed visual model, Miracle Vision, has iterated to version 4.0 and is expected to be applied to its products in January 2024; 2) The company continues to systematically integrate AIGC functions into its core image, video, and design processes. AIGC products and functions are expected to enhance user experience and accelerate the increase in subscription rates. In terms of overseas markets, under the global strategy, the company's products have covered approximately 195 countries and regions worldwide, driving the increase in overseas product revenue. The company's MEITU Design Studio, targeting productivity scenarios, has achieved: 1) Integration of AI commercial photography functions to facilitate user operations and improve workflow efficiency from product photography to online listing; 2) Access to the Taobao service market; 3) Price increases for company product memberships, which will drive ARPPU increase, to be implemented in January 2024. The company is gradually expanding into the productivity side and is expected to tap into the market space for productivity. The company's AI portrait generation effect has reached the top level in China, and the AIGC strategy is expected to unlock the B-side payment space.
【Key Announcement】
China Unicom (00762): Customer problem resolution rate of smart customer service in December was 98.1%, accelerating the layout of big data and AI development
According to Zhitong App, China Unicom (00762) announced that as of December 2023, the total number of &#34;Big Connection&#34; users reached approximately 988 million households, the total number of 5G package users reached approximately 259.6 million households, and the total number of IoT terminal connections reached approximately 494 million households. The number of 5G industry virtual private network service customers was 8,563.
The problem resolution rate of the intelligent customer service for this month is 98.1%, and the proportion of intelligent services provided by the intelligent customer service is 85.2%. The cumulative number of authorized patents this year is 2,287.
Commentary: In terms of market share, China Unicom is relatively weak among the three major telecommunications operators. However, China Unicom achieved service revenue and profit growth higher than the industry average in the fourth quarter of last year, mainly benefiting from the stable growth of core businesses and the recovery of emerging businesses such as cloud computing. Taking into account the one-time depreciation cost of RMB 2.35 billion in the fourth quarter of 2022, China Unicom's service revenue is expected to increase by 5% YoY and 36% QoQ in the fourth quarter of 2023. Since Chen Zhongyue was appointed as chairman in December 2023, China Unicom is expected to accelerate the execution in strategic growth areas such as big data and artificial intelligence. China Unicom has released ten innovative achievements in digitalization, intelligence, and integration of space, air, and land. Among them, the debut of China Unicom's graphic and text model &#34;Honghu&#34; has received widespread attention in the industry. The three major operators attach great importance to shareholder returns, and the proportion of cash dividends continues to increase. China Unicom stated that it will continue to improve dividend payments.
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01357

AIGC

MEITU has released its 23-year performance forecast, expecting to achieve an adjusted net profit of approximately RMB 330-370 million, a year-on-year increase of approximately 200%-230%. The company's main business growth is driven by AI subscription rates, and AI products have performed beyond expectations. The company's globalization strategy continues to advance, with AIGC driving an accelerated increase in user payment rates, and overseas markets driving revenue growth. The company's flagship product, MEITU Design Studio, has integrated AI commercial photography functions, improving workflow efficiency.

Hong Kong Stock Exchange Announcement | Rapid YoY Growth in Performance, Product Strength Enhances AIGC's Accelerated Increase in Premium Rate