The company lost 110 million yuan by buying Bitcoin! Its performance was severely hit. The stock price of this company has fallen by 32% since it bought Bitcoin.

Meitu is suffering the consequences of investing in virtual currency.

On August 25, Meitu released its 2021 interim performance report. As of June 30, the fair value of Bitcoin and Ethereum purchased by the company was approximately US$65.2 million and US$32.2 million, respectively. In the first half of the year, the fair value of Bitcoin decreased by RMB 111.9 million, and Ethereum increased by RMB 94.9 million, with a total loss of RMB 17 million in virtual currency investment.

From its historical high of HK$23.05 after its listing in 2017, Meitu’s stock price has fallen by more than 90% (adjusted).

Decrease in fair value of cryptocurrencies

The announcement showed that according to the International Financial Reporting Standards, Meitu achieved revenue of 806 million yuan in the first half of the year, a year-on-year increase of 44.6%; the loss amount increased significantly to 137.7 million yuan, a year-on-year increase of 450.8%.

Meitu said the sharp increase in losses was mainly due to the decrease in the fair value of the cryptocurrencies it had purchased.

Image source: Meitu Announcement

In the first half of the year, the total number of monthly active users of Meitu was 245.8 million, a year-on-year decrease of 5.8%. Among them, Meitu Xiuxiu had 114 million monthly active users, a year-on-year decrease of 0.5%; and Meitu Beauty Camera had 62.575 million monthly active users, a year-on-year increase of 1.2%.

Meitu's premium subscription and other value-added businesses continued to grow. Online advertising revenue was 392 million yuan, up 23.3% year-on-year; premium subscription services and application revenue was 210 million yuan, up 150.7% year-on-year; Internet value-added service revenue was 35.34 million yuan, up 65.6% year-on-year.

After the results were released, some investors said in the Eastmoney stock forum: "The interim report is very negative, let's see how it will be digested tomorrow." Another investor said: "The listed company used the money to invest in high-risk targets. If the main business is not doing well, they just want to make quick money."

Over 650 million yuan gambled on virtual currency

On March 7, Meitu Inc. issued an announcement stating that it purchased 15,000 units of Ethereum and 379.1214267 units of Bitcoin in open market transactions on March 5. The total consideration for the two virtual currencies was approximately US$22.1 million and US$17.9 million, respectively.

On the evening of March 17, Miracle Vision, a wholly-owned subsidiary of Meitu, purchased 16,000 units of Ethereum for a total consideration of approximately US$28.4 million; and purchased 386.08 units of Bitcoin for a total consideration of approximately US$21.6 million.

On the evening of April 8, Meitu announced that its wholly-owned subsidiary Meitu Hong Kong purchased 175.678 units of Bitcoin for a total consideration of approximately US$10 million. As of the announcement date, the group had accumulated a net purchase of approximately US$100 million (approximately RMB 655 million) worth of virtual currencies.

Since announcing at the beginning of the year that it would invest huge amounts of money in cryptocurrency trading, Meitu's stock price has started to fall.

Since March 5, the company's stock price has fallen by 32.47%, with the latest share price at HK$1.83. Meitu's market value is currently only HK$7.96 billion, or about RMB 6.6 billion.