A recent report from Zheshang Securities Co.,Ltd. addresses market concerns regarding AI's impact on software companies like MEITU. The report distinguishes between workflow optimization tools and decision-support software, classifying MEITU's products as the latter. Unlike tools focused on automating single tasks, MEITU serves as an aesthetic creation platform centered on supporting users' subjective judgment and creative expression. The integration of AI capabilities is seen as enhancing its functionality rather than posing a replacement threat.

From a user perspective, MEITU's core paying customers inherently seek tools for personalized aesthetic expression, not simplistic one-click AI photo editing. Data indicates that despite increasingly advanced AI-powered editing features on smartphones, MEITU's monthly active users for lifestyle scenarios have continued to grow since 2021. Furthermore, while basic beautification features are available for free, the number of paying users continues to rise, demonstrating a willingness to pay for more personalized aesthetic tools.

The report also addresses concerns about competition from AI image generation or editing products launched by major model developers. For loyal users, MEITU's competitive advantages lie in its extensive material library and familiar workflow interface; the integration of similar AI features makes customer migration unlikely. For new user acquisition, MEITU benefits from a first-mover advantage by adding new features to existing products and launching entirely new categories. Its video editing tool Wink, for example, has secured over 30 million global monthly active users by differentiating itself with AI features like quality restoration and portrait beautification, maintaining its position as the second-largest player in its vertical despite competition.

In conclusion, the report asserts that while AI may change how users interact with MEITU's products, it will not undermine the company's long-term competitive strengths. These include its deep expertise in photo beautification aesthetics, a large and stable user base, and unique workflow paradigms. Leveraging these barriers, MEITU is experiencing growth in overseas monthly active users and paying user penetration. With overseas users commanding higher subscription prices and B2B customers demonstrating stronger payment willingness, the average revenue per paying user is expected to rise, driving sustained revenue growth through increased volume and price.