Yesterday (May 20), Meitu Inc.(Meitu) issued an announcement, declaring the signing of a $250 million convertible bond agreement with Alibaba. At the same time, the two parties will carry out strategic cooperation in areas such as e-commerce platforms, AI technology, and cloud computing.
According to the announcement, Alibaba is investing in Meitu in the form of convertible bonds, with a total principal amount of $250 million (net proceeds of approximately $249.6 million), for a term of three years and an annual interest rate of 1%. Alibaba may exercise the conversion right from the date of issuance to five working days before the maturity date, converting into Meitu shares at a price of HK$6.00 per share.
According to the announcement, Meitu and Alibaba will carry out in-depth cooperation in the fields of e-commerce and model development. Alibaba will prioritize the promotion of Meitu’s AI e-commerce tools on its e-commerce platforms and assist Meitu in developing new tools and features for data-driven e-commerce product images and videos, in order to improve the marketing and operational efficiency of merchants on Alibaba’s e-commerce platforms.
Alibaba will provide technical support for Meitu’s core businesses to meet the computing power needs for inference and training of Meitu’s AI products. Meitu commits to procure no less than 560 million yuan ($77.7 million) in cloud services from strategic investor Alibaba over the next three years.
In addition, the two parties will explore more differentiated innovation projects to create unique experiences for users on their respective platforms.
At present, the two parties have signed the investment agreement. Final completion is subject to relevant government approvals and other preconditions, including but not limited to Hong Kong Stock Exchange approval for listing of the converted shares, and approval from the National Development and Reform Commission for the bond issuance.
Public information shows that Meitu is an AI application company. Through MeituEve, it provides AI skin analysis solutions to global skincare and beauty brands. Through Meidd, it provides cosmetics ERP and supply chain management SaaS solutions to over ten thousand cosmetics stores, supporting the sustainable development of the beauty industry.
According to the financial report, Meitu’s total revenue for the full year of 2024 was 3.34 billion yuan ($463.5 million), a year-on-year increase of 23.9%. Adjusted net profit attributable to equity holders of the parent company was 586 million yuan ($81.3 million), a year-on-year increase of 59.2%. It is reported that since 2019, Meitu has achieved positive net profit growth for six consecutive years.
