事件：美圖公司發佈2023年業績，全年實現營業收入27.0億元，同比增長29.3%；歸母經調整淨利潤達約人民幣3.7億元，同比增長233.2%。從用戶端來看2023年12月31日，公司月活躍用戶數達到約2.5億，年同比升2.6%；生產力應用用戶數達到1770萬，同比增長74.3%；付費訂閱用戶數爲911萬，同比大幅增長62.3%。

2023 results demonstrate paid-subscriber conversion resilience

Key metrics: Meitu’s recently released results report shows it generated RMB2.70bn revenue in 2023, up 29.3% yoy; while adjusted net profit came to about RMB370m, up 233.2% yoy. The key metrics also included monthly active users of about 250m as of 31 Dec 2023 (up 2.6% yoy), along with 17.7m productivity app users (up 74.3% yoy) and 9.11m paid subscribers, leaping 62.3% yoy.

全年業績驗證免費轉訂閱和業務增長的韌性：23年業績增長核心貢獻主要系1）生成式AI 技術驅動下，影像產品組合的付費訂閱用戶滲透率上升 2）更加清晰和積極的全球化戰略下全球付費用戶數穩步增長。此前關於公司付費率的討論苦於難以尋找到同行業、同競爭格局、同市場的可比公司，因此關於付費率增長和天花板的分歧較大。但在公司2023年業績發佈後我們認爲1）作爲深耕顏值工具軟件賽道多年首次轉訂閱出現加速後，可以適度對公司今年付費率的自然增長和天花板略微保持樂觀；2）在競爭環境並未出現惡化和訂閱習慣向好的背景下我們堅信工具軟件頭部公司的付費率加速度有望保持，因此預計公司付費率增長依然會保持前期趨勢。

Paid sub conversions: the 2023 results report demonstrates the resilience of Meitu’s conversions of free user to paid subscribers, along with business growth, to which we attribute the following key catalysts:

•The use of generative AI technologies drove up the penetration rate of paid subscribers of the company’s imaging product portfolio; and

•A more clearcut and aggressively implemented globalization strategy drove a steady rise in global paying subscribers.

Discussion on Meitu’s paid sub rates in the past had been hampered by the difficulty of ascertaining comparable peers in the same industry, competitive landscape or market, leading to disparate views of current and potential paid sub rates. However, 2023 results have added comfort to our stance: 

•In view of the company’s longtime traction in the beauty software tool business, this first-time growth spike in paid subs adds to our optimism about their intrinsic and potential growth in 2024E;

•As the competitive environment has not worsened amid favorable subscriber behavior, we are convinced leading software tool companies will maintain their paid sub rates, and thus expect Meitu will sustain its initial uptrend in paid sub rates.

公司治理改善造就稀缺性的工具軟件標的：我們前期也多次強調美圖公司在商業模式成功切換、創始人重新出任董事長後，全面聚焦主業已兌現強勁的主業收入增長，同時公司在C端的競爭格局優勢或被低估。在生成式AI時代和輕量化工具軟件加速整合和革新的過程中，美圖具備重新搶佔原有專業工具軟件市場的能力，且搶佔的過程可能與Canva類似，即不涉及與工具軟件支出預算競爭，而是通過更高的ROI和更輕量化和協同的工具軟件吸引客戶，且在生成式AI和LLM來臨之前輕量化的創意內容趨勢已經在海外出現，我們相信國內依然有潛在的商業機會，美圖則是少數同時具備輕量化和工具軟件製作的核心標的。

Retuned corporate governance creates scarce software tool companies

We have repeatedly highlighted that Meitu initially achieved strong revenue growth after a refocus on the main business with a change of business model when its founder returned as chairman, although its B2C competitive edge could be underestimated. In the era of generative AI and accelerated integration and innovations in lean software tools, Meitu has the ability to recapture its original professional software tool market positioning, and the recapturing process could echo Canva’s experience. We believe it would not involve competing for software tool expenditure budgets, but rather, attracting customers through higher ROI with leaner and collaborative software tools. Before the advent of generative AI and LLMs, a trend of lean creative content had emerged in foreign markets. We see potential business opportunities for Meitu in the Chinese market as it is one of the few key players in lean software as well as software tool production.

下一站再出海，或賦予公司全新增長空間：展望 24-25 年我們認爲自上而下設定的AIGC策略和聚焦主業工具軟件有望爲美圖公司帶來收入和利潤的持續增長，此外出海業務或將是年內被低估的增長新動力，而這部分被低估的主要原因爲：1）公司全球出海多款重磅產品長線運營能力;2） 重視海外後或推出更本地化的產品；3）生成式AI和工具軟件的結合在海外機會繁多，公司或具備將國內成功經驗移植的可能。整體看公司的訂閱業務經營槓桿有望在海外帶動下持續發力，帶動公司24-25年業績持續超預期。

Next step: foreign market buildout expands Meitu’s growth potential 

Looking ahead into 2024-25E, we believe Meitu’s top-down AIGC strategy and focus on the main business of software tools will help maintain revenue and profit growth trends. 

We also reckon that its foreign business is undervalued as a new growth driver through 2024E and for the following reasons:

•Meitu already has long-term operational capabilities due to its many global heavyweight products; 

•It could launch localized products next after having focused on foreign markets; and

•The combined strengths of generative AI and software tools bring many opportunities in foreign markets, where we believe the company has the potential to replicate its successful experience in the Chinese market.

On the whole, we expect Meitu’s operating leverage in the subscription business will gain momentum through its foreign market buildout and drive better-than-expected profitability in 2024-25E.

生成式AI重新迴歸工作流主線，重視具備盈利能力的頭部廠商：2024年我們認爲生成式AI應用的盈利模式將更爲重要，在頭部大模型廠商能力逐步外延的趨勢下，細分賽道的生成式AI能否和工作流結合快速實現盈利或更爲重要。我們認爲生成式 AI圖像賽道的最大機會可能來自於1）素材庫（圖像、字體、AI模型）和2）輕量化工具軟件帶來的工作流升級。我們認爲在基礎設計功能方面有望逐步取代一部分傳統專業設計工具和輕量化工具軟件的交叉覆蓋市場。

Generative AI back in main workflow; focus on producers with leading profitability

We believe generative AI apps’ profit models will gain weight in 2024E. With leading manufacturers broadening their capabilities with LLM, it could become more crucial for generative AI as used in business segments to be integrated into the main workflow to quickly achieve profitability. We see the biggest growth catalysts for generative AI imaging coming from materials libraries (images, fonts, AI models) and workflow upgrades brought by lean software tools. We believe it will partially replace some of the basic design functionalities currently used in cross-coverage markets for traditional professional design tools and lean software tools.