MEITU's "Growth Strategy": AI Enhances Payment Rate, Overseas Drives User Growth

At the intersection of the generative AI wave and global layout, MEITU is painting a clear growth blueprint for the market.

According to news from the Chasing Wind Trading Desk, Morgan Stanley released a research report on August 25, stating that MEITU's management has set a key goal: to increase the overall payment rate of the company's products from 4.7% in 2024 to 8-10% within the next three years. If this goal is achieved, it means that its core subscription business revenue has the potential to double.

At the same time, the company is adjusting its overseas strategy, shifting from solely pursuing paid users to also focusing on the growth of monthly active users, intending to open new growth spaces in the European and American markets and seize new opportunities brought by the popularity of TikTok.

Based on this growth roadmap, Morgan Stanley raised MEITU's target price by 9% to HKD 15.7 and maintained an "Overweight" rating. Analysts Lydia Lin and Yang Liu pointed out in the report that MEITU's ability to leverage generative AI, focus on core business, and prudently delineate business boundaries makes its long-term growth potential promising.

Investors are closely watching the upcoming September 2025, when MEITU plans to launch the commercialization of its AI tool RoboNeo and begin integrating it into other applications, while substantial progress is also expected in its collaboration with Alibaba. These initiatives are seen as key milestones to test the effectiveness of its new strategy.

Core Goal: Doubling the Payment Rate in Three Years

According to the Morgan Stanley report, MEITU's management has provided clear financial guidance, with the core of its growth strategy being to enhance users' willingness to pay.

The first milestone set by the company is to increase the overall payment rate to 8-10% within three years (2025-2028). The report notes that this is a significant leap from the 4.7% in 2024. In the long term, MEITU's goals are even more ambitious: achieving a payment rate of over 10% for leisure products and over 20% for productivity tools.

To achieve this goal, the company plans to maintain sales and marketing (S&M) expenses at around 16% of image, video, and design (PVD) and advertising revenue, while R&D spending will grow at an annual rate of about 15% over the next three years, demonstrating the company's commitment to controlling costs while continuously investing in growth.

Expanding Overseas Users, Extracting Value Domestically

MEITU's product strategy presents a clear "dual-engine" model: driving user growth through overseas markets while deeply exploring user value in the domestic market.

• Overseas Leisure Business: The Main Engine for MAU Growth. The report states that management has noticed that, influenced by TikTok, the acceptance of image and video editing among the younger generation in the West is increasing. Therefore, MEITU began restructuring its core applications (such as Airbrush and BeautyPlus) in the European and American markets starting in July 2025, shifting from a past focus on paid users to also emphasizing MAU growth. Given that the existing payment rate for leisure products in the U.S. market is as high as about 50%, once the MAU scale increases, it will not only drive overall user growth but also significantly contribute to paid revenue
• Domestic Business: Focus on Payment Rate and ARPPU. For the domestic market, leisure products are seen as mature "cash cows," contributing short-term revenue; while productivity tools (such as KaiPai and DesignKit) do not pursue MAU expansion but focus on improving payment rates and average revenue per paying user (ARPPU).

AI Empowerment: RoboNeo as a Payment Conversion Accelerator

AI is another core support for MEITU's growth strategy. According to the report, MEITU's AI tool RoboNeo is highly anticipated, as it is expected to address the long-standing issue of insufficient personalized feature recommendations in the company's products, thereby effectively accelerating the increase in payment rates.

RoboNeo's positioning is divided into two parts: first, it will serve as an independent productivity application targeting the non-professional user market; second, and more crucially, starting from September 2025, RoboNeo will be integrated into other applications under MEITU.

MEITU's management believes that if the integration is successful, RoboNeo is expected to bring significant revenue growth to the company in 2026 by significantly enhancing the recommendation mechanism of the applications.

Partnering with Alibaba: Opening a New Chapter in E-commerce Monetization

The collaboration with Alibaba is seen as key to MEITU's new business model. The report reveals that the cooperation is expected to start before the convertible bond (CB) transaction is completed in the second half of 2025.

Key cooperation projects include:

1. AI Try-on: This feature will be launched in the second half of 2025 through an independent application (Wearnow) and integrated into MEITU Xiuxiu and Beauty Camera. After use, users will be directed to Alibaba's e-commerce platform to place orders, and MEITU will monetize through a revenue-sharing model.

2. DesignKit Integration: It is expected that from September 2025, one or two functions of MEITU's DesignKit will appear on Alibaba's merchant workstation (TTG portal), directly serving e-commerce sellers.

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