Meitu's app revenue grew 46% YoY in July, with overseas business accelerating and earnings outperforming expectations

Overview

This report is UBS's monthly tracker of Meitu's app revenue, focusing on a comparison of revenue momentum across China and overseas markets and among major apps in July 2026. The report believes overall growth shows no signs of weakness, overseas expansion is becoming a stronger source of growth, and preliminary 1H26 results indicate that paying users and ARPU jointly drove profit growth above expectations.

Core views

Meitu's total app revenue grew 46% YoY in July 2026, slightly accelerating from 45% in June and exceeding the 44% recorded for full-year 2025. Regional trends diverged: China app revenue grew 51% YoY, below 54% in June and 64% in 2025, while overseas app revenue grew 43% YoY, significantly above 37% in June and 31% in 2025. UBS therefore believes Meitu's overall app business continues to deliver robust growth, with overseas markets becoming a more prominent source of incremental growth. By product, revenue from the Meitu app in China grew 56% YoY in July, above 54% in June and 39% in May but below 61% in 2025; ByteDance's Hypicat grew 66% over the same period. UBS believes both apps maintained strong growth and that the competitive environment remains relatively benign at this stage. BeautyCam's revenue in China grew 34%, slowing from 42% in June but remaining above 25% in 2025, while Wink, which targets younger users and focuses on video editing, grew 44%. These data indicate that Meitu's core app portfolio is not being driven by a single product. Despite monthly fluctuations in the growth rates of certain products, overall momentum remains strong. Overseas performance was even more notable: Meitu, BeautyCam and Wink grew 60%, 96% and 80% YoY, respectively, in July. BeautyPlus and Airbrush also grew 15% and 24%, respectively, accelerating from 0% and 14% in June. UBS therefore concludes that Meitu is streamlining its product strategy, with overseas expansion increasingly concentrated on the global versions of its principal apps, while several mature overseas products are also improving. Faster overseas growth relative to China is a key basis for the report's view that growth has not yet weakened. Operating results also support this conclusion. Meitu's recently announced preliminary 1H26 results showed revenue of RMB1.8 billion from its core photo, video and design business, up 30.9% YoY, or 33.6% excluding discontinued operations. Adjusted net profit is expected to grow 36% to 40% YoY, above UBS's forecast and market expectations. The report primarily attributes the earnings beat to robust simultaneous growth in paying users and ARPU, implying that revenue expansion is being supported not only by user scale but also by improved monetisation per user. UBS expects Meitu's revenue to increase from RMB3.859 billion in 2025 to RMB4.978 billion in 2026, RMB6.210 billion in 2027, RMB7.412 billion in 2028, RMB8.631 billion in 2029 and RMB9.452 billion in 2030. Net profit forecasts for the same years are RMB965 million, RMB1.359 billion, RMB1.791 billion, RMB2.256 billion, RMB2.706 billion and RMB3.062 billion, respectively. Diluted EPS is expected to rise from RMB0.21 in 2025 to RMB0.30 in 2026, RMB0.39 in 2027 and RMB0.49 in 2028. Market consensus forecasts for the same periods are RMB0.27, RMB0.35 and RMB0.49, respectively, showing that UBS's 2026 and 2027 forecasts are above consensus. Net cash is also expected to increase from RMB3.495 billion in 2025 to RMB4.344 billion in 2026, RMB5.337 billion in 2027 and RMB9.653 billion in 2030. On valuation, Meitu currently trades at 10x 2027E P/E. UBS believes that if earnings growth is sustained, this valuation implies limited downside risk, while an estimated dividend yield of approximately 4% in 2027 could also support the valuation. The report uses a DCF valuation and maintains its 12-month Buy rating and HK$7.20 price target. Relative to the HK$4.38 share price on 20 August 2026, this implies forecast price upside of 64.6%. Including the forecast dividend yield of 3.2%, forecast stock total return is 67.7%, representing forecast excess return of 59.4% relative to the assumed market return of 8.3%. The report also emphasises the limitations of using monthly data: the historical correlation between third-party data and Meitu's subscription revenue may be limited because the data mainly cover mobile apps, while Meitu is expanding its productivity business through more PC products. Therefore, these data are more suitable for observing relative momentum than for directly equating absolute growth rates with the company's subscription revenue. Except for total app revenue, which uses both iOS and Android data, other app revenue data cover only iOS. UBS's short-term quantitative assessment and its 12-month Buy view do not use exactly the same time horizon. Both the industry structure and regulatory environment over the next six months score 3, indicating that they are expected to remain broadly unchanged. The stock's fundamental trend over the past three to six months scores 4, indicating some improvement. The score for the next EPS update relative to consensus is 3, while the upside/downside risk score for UBS's own earnings forecasts is also 3, both indicating broadly balanced directional risks. The assessment also notes the existence of a positive catalyst over the next three months but does not specify the event or date. The report's upside scenarios include faster-than-expected globalisation, a breakthrough in DesignKit's product capabilities that accelerates paying-user growth, and faster-than-expected advancement of its proprietary generative AI model MiracleVision by leveraging existing user data. Downside risks include slower-than-expected globalisation, the launch of more competitive products by hyperscale technology companies or other AI start-ups, and intensified industry competition due to declining inference costs for large language models.

Analysis framework

UBS first uses Sensor Tower and UBS Evidence Lab data to track monthly YoY revenue growth for Meitu's app portfolio in China and overseas markets. It then compares growth momentum by region, product and competing app, and cross-checks third-party app data against the company's disclosed preliminary 1H26 results. The report subsequently combines paying-user trends, ARPU, earnings forecasts, DCF valuation, P/E and dividend yield to formulate its 12-month rating, while explicitly noting that third-party mobile data cannot be directly equated with the company's overall subscription revenue.

Methodology notes

• Valuation methodologyDCF discounted cash flow

  DCF valuation

  The report explicitly uses a DCF to value Meitu, discounting expected future cash flows to present value and using the result to support its 12-month price target of HK$7.20. The input does not disclose the specific discount rate or terminal value assumptions.

• (Out-of-vocabulary methodology)

  Third-party mobile app revenue momentum tracking

  The report uses Sensor Tower and UBS Evidence Lab data to compare revenue growth across different months, regions and apps. Because the data mainly cover mobile platforms and most individual app data include only iOS, UBS emphasises observing relative momentum rather than directly treating absolute growth as the company's overall subscription revenue growth.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Meitu (1357.HK)

  The subject of the report, benefiting from robust growth in its China app business, accelerating overseas expansion, and higher paying-user numbers and ARPU.

  Strengths

  Owns imaging and video-editing products such as Meitu, BeautyCam and Wink, and is expanding among individual and enterprise users through its proprietary MiracleVision AI model. Multiple overseas apps achieved strong growth in July 2026.

  Weaknesses

  Third-party mobile data have limited correlation with the company's overall subscription revenue and cannot fully cover its expanding PC productivity business.

  Comparison

  Revenue from the Meitu app in China grew 56% YoY in July, below Hypicat's 66%, but UBS believes both maintained robust growth and that the current competitive environment remains relatively benign.

  Risks

  Globalisation may progress more slowly than expected, while strong competing AI products and declining inference costs may intensify competition.

Key data

• Total app revenue growth in July 2026+46% YoY+45% in June 2026 and +44% in 2025; total app revenue data include iOS and Android.
• China app revenue growth in July 2026+51% YoY+54% in June 2026 and +64% in 2025.
• Overseas app revenue growth in July 2026+43% YoYAccelerated from +37% in June 2026 and +31% in 2025.
• Meitu app revenue growth in China+56% YoY+54% and +39% in June and May 2026, respectively, and +61% in 2025; Hypicat recorded +66% over the same period.
• BeautyCam and Wink revenue growth in ChinaBeautyCam +34%; Wink +44%BeautyCam recorded +42% in June 2026 and +25% in 2025.
• Overseas core app revenue growthMeitu +60%; BeautyCam +96%; Wink +80%All figures are YoY growth rates for July 2026.
• Overseas BeautyPlus and Airbrush revenue growthBeautyPlus +15%; Airbrush +24%0% and +14%, respectively, in June 2026.
• Core business revenue in 1H26RMB1.8 billionUp 30.9% YoY, or 33.6% YoY excluding discontinued operations.
• Adjusted net profit growth in 1H26+36% to +40% YoYAbove UBS and market expectations, mainly driven by robust growth in paying users and ARPU.
• UBS revenue forecasts2026E/2027E/2028E/2029E/2030E: RMB4.978/6.210/7.412/8.631/9.452 billionRevenue in 2025 was RMB3.859 billion.
• UBS net profit forecasts2026E/2027E/2028E/2029E/2030E: RMB1.359/1.791/2.256/2.706/3.062 billionNet profit in 2025 was RMB965 million.
• Diluted EPS forecasts2026E/2027E/2028E: RMB0.30/0.39/0.49Market consensus forecasts are RMB0.27/0.35/0.49, respectively.
• Valuation10x 2027E P/EThe report believes downside risk is limited if earnings growth is sustained and forecasts a dividend yield of approximately 4% in 2027.
• 12-month price target and current priceHK$7.20; HK$4.38Current price as of 20 August 2026.
• Forecast returnsPrice upside of 64.6%; dividend yield of 3.2%; stock total return of 67.7%The assumed market return is 8.3%, implying forecast excess return of 59.4%.

Impact & implications

UBS believes that accelerating overseas app revenue, broad-based growth across multiple products, and simultaneous improvements in paying users and ARPU are keeping Meitu's growth foundation robust. If earnings continue to grow as forecast, 10x 2027E P/E and the dividend yield could support the valuation. However, third-party mobile data cannot fully reflect the PC productivity business, and monthly data are primarily useful for assessing trends rather than directly forecasting subscription revenue.

Risks

• Globalisation may progress more slowly than expected.
• Hyperscale technology companies or other AI start-ups may launch more competitive products.
• Declining large language model inference costs may intensify competition.
• Faster-than-expected globalisation would represent upside risk.
• A breakthrough in DesignKit's product capabilities that accelerates paying-user growth would represent upside risk.
• Faster-than-expected advancement of MiracleVision by leveraging existing user data would represent upside risk.

What to watch

• Continue monitoring the relative momentum of app revenue in China and overseas markets rather than focusing solely on the absolute growth rates indicated by third-party data.
• Monitor monthly overseas revenue changes for Meitu, BeautyCam, Wink, BeautyPlus and Airbrush.
• Monitor the pace of globalisation, paying-user growth and changes in ARPU.
• Monitor DesignKit's product capabilities and the advancement of the MiracleVision model.
• The report cites a positive catalyst over the next three months, but the specific event and date have not yet been disclosed.