CICC has published a research report upgrading MEITU's target price by 50% to HK$10.8 while maintaining its "Outperform" rating, citing the company's effective cost and expense control. The investment bank raised its 2025/2026 adjusted net profit forecasts by 11% and 10% to RMB 900 million and RMB 1.2 billion respectively.
The new target price of HK$10.8 represents 36 times the projected adjusted price-to-earnings ratio for next year.
According to the report, MEITU recorded revenue growth of 12.3% year-over-year to RMB 1.82 billion in the first half of the year. Adjusted net profit surged 71.3% year-over-year to RMB 470 million, primarily driven by an increased proportion of high-margin subscription business.
Historically, MEITU has distributed dividends annually based on 40% of its adjusted net profit. The company indicated during its earnings announcement that it will maintain this dividend payout ratio but will change the distribution method to interim plus annual payments. This adjustment will require approval at an extraordinary general meeting of shareholders.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.