Meitu Inc. Sells Cryptocurrency Portfolio

While MicroStrategy (NASDAQ:MSTR) is racing to buy as many Bitcoins as possible, a Chinese AI-focused company is looking to cash in on the year-to-date rally in cryptocurrencies.

Meitu's Sale

Meitu Inc (HK:1357), known for its AI-powered beauty-focused apps, disclosed the sale of its entire cryptocurrency portfolio, which consisted of 31,000 units of Ether and 940 units of Bitcoin, acquired in 2021.

The transaction resulted in total cash consideration of approximately $180 million (around 1.3 billion RMB), yielding substantial gains of $79.63 million (approximately 571 million RMB).

Dividend Plans and Business Expansion

The company's board announced plans to allocate about 80% of the net proceeds from this sale to pay a special dividend, equating to roughly 457 million RMB or HK$0.109 per share, translating to a 3.8% yield based on the current share price.

The remaining portion of net proceeds is earmarked for business expansion, focusing on the growth of subscription-based imaging and design products, reflecting a strategic emphasis on core offerings.

Analyst Commentary

Morgan Stanley (NYSE:MS) commented on Meitu's move as a strong indication of the company's commitment to enhancing shareholder value. Analyst Lydia Lin noted, "The sale of all these cryptocurrency holdings for shareholder return and business development proves Meitu's determination to create value for investors with its subscription-based product focus."

Lin believes this marks a turning point for the company's position in capital markets and signifies significantly improved corporate governance.