In-depth analysis of Meitu's stock price fluctuations and Bitcoin impairment

In the past six months, Meitu's performance has experienced fluctuations, and its stock price has been affected by Bitcoin impairment losses. Although it is still profitable to hold the currency, its stock price has fallen by 3%. This phenomenon not only reflects Meitu's challenges in digital asset investment, but also reflects the complexity of today's market environment. This article will take a deep look at Meitu's financial situation, the trend of the Bitcoin market, and what this volatility means to investors.

Meitu, as a company known for its social media and image processing software, has actively laid out the digital currency market in recent years, especially Bitcoin. According to public information, Meitu purchased a large amount of Bitcoin at a certain point in time, with the original intention of improving the company's overall financial performance through the appreciation of digital assets. However, as the price of Bitcoin fluctuated sharply, the value of its holdings of Bitcoin also fluctuated. In the past six months, the Bitcoin market has experienced significant impairment, which undoubtedly has a direct impact on Meitu's financial statements.

When analyzing Meitu's financial situation, we must take into account the volatility of Bitcoin prices. Since the end of 2022, the price of Bitcoin has once exceeded the $60,000 mark, but the subsequent market adjustment caused it to fall back below $30,000 in early 2023. In Meitu's balance sheet during this period, direct losses caused by Bitcoin impairment can be seen, which not only affected the company's net profit, but also caused investors to waver in their confidence in Meitu.

Despite this, Meitu still maintains its holding strategy for Bitcoin because of its optimism about the long-term value of Bitcoin. Many investors have chosen the strategy of "holding coins for appreciation" in the face of market fluctuations. Meitu's management said in the earnings conference that although it is currently facing challenges, they believe that Bitcoin's appreciation potential still exists. Meitu, which has held coins to date, has remained profitable despite a 3% drop in its total stock price.

In today's market environment, the investment risks of digital assets are obvious. The price of Bitcoin is not only affected by market supply and demand, but also by multiple factors such as policies, technology, and market sentiment. For example, the regulatory policies on cryptocurrencies are becoming increasingly stringent around the world, and many countries have begun to restrict digital currency transactions, which has directly led to increased market uncertainty. In this case, investor confidence was affected, leading to more volatile Bitcoin prices.

The decline in Meitu's stock price can be said to be the result of multiple factors. First, the overall market sentiment towards technology stocks fluctuated, especially against the backdrop of slowing economic growth, which tends to be subject to greater selling pressure. Second, investors questioned Meitu's profitability, especially under the influence of Bitcoin impairment losses, and the company's future profit expectations were lowered. Finally, the market's uncertainty about the future trend of Bitcoin has also questioned Meitu's investment value.

For investors, the current market conditions are both challenges and opportunities. For those investors who are optimistic about Meitu's long-term development, the current stock price decline may be a good time to enter the market. However, investors also need to remain vigilant, carefully analyze market dynamics, understand the trend of Bitcoin and Meitu's financial health, so as to make wise investment decisions.

In this rapidly changing market, it is particularly important to maintain a flexible investment strategy. Whether choosing to continue to hold Meitu's shares or looking for other investment opportunities in market fluctuations, investors need to adjust according to their own risk tolerance and market trends. As a high-risk asset, Bitcoin's future trend is still full of uncertainty. Investors must make full risk assessment when participating in this market.

In general, the challenges encountered by Meitu in digital asset investment reflect the complexity and uncertainty of the current market environment. Despite the dual pressures of falling stock prices and Bitcoin depreciation, Meitu still shows a certain degree of resilience. In the future, with the gradual recovery of the market and the advancement of Meitu's own technological innovation, it may bring new hope to investors. For investors who pay attention to Meitu, a deep understanding of market dynamics and a flexible mindset are the best strategies to cope with future challenges.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Meitu (01357)
This year, it spent US$100 million (approximately HK$780 million) to purchase a total of approximately 31,000 Ethereum and 940.89 Bitcoin. Meitu said that the board of directors believes that the blockchain industry is still in its early stages and that cryptocurrencies have sufficient room for appreciation in the long run, so there is no plan to sell cryptocurrencies in the short term. However, Meitu's half-year results as of the end of June will record a fair value impairment loss on Bitcoin.

As of 10:14 a.m., Meitu's stock price fell 3% this morning to HK$1.6, with a turnover of approximately HK$6.94 million.

Meitu said that on June 30, the fair value of the purchased Ethereum and Bitcoin, determined based on the market price at the time, was approximately US$65.2 million and US$32.2 million, respectively. In accordance with the relevant accounting standards under the International Financial Reporting Standards, the Group will record the purchased cryptocurrencies as intangible assets and measure them using the cost model. Therefore, the fair value of the purchased Bitcoin decreased by approximately US$17.3 million at the end of June, and is expected to be recognized as an impairment loss in the interim results, while the fair value of the purchased Ethereum increased by approximately US$14.7 million at the end of June, which will not be recognized as a revaluation gain in the interim results.

Meitu said that the relevant impairment loss will not have any significant impact on the cash flow, operation and adjusted net loss or profit in the group's interim results.

Meitu also emphasized that the fair value of Ethereum and Bitcoin purchased is currently approximately US$72.4 million and US$32.8 million, respectively. Therefore, the net increase in the fair value of the purchased cryptocurrency over its book value is approximately US$5.2 million (approximately HK$40.56 million).

Although Meitu faces many challenges, there are also positive factors worth paying attention to. First, Meitu's user base in the social media field remains strong. According to data, Meitu's monthly active users have grown steadily, which provides a guarantee for the company's future revenue. Second, Meitu continues to explore technological innovation and has launched a number of new image processing products, which have the potential to bring new sources of income to the company. In addition, as the digital currency market gradually matures, the price of Bitcoin is expected to pick up in the future, bringing potential profit opportunities to Meitu.