Meitu's AI turnaround meets cost and competition pressure
An analysis republished by TMTPost from Juchao WAVE says Meitu's shares have fallen from above HK$9 in early 2026 to around HK$4, more than 50% below their peak and down over 40% year to date, as market sentiment toward its AI applications turned cautious. Citing the company's interim results, it reports H1 2026 revenue from continuing operations of RMB 2.213 billion, up 22.1% year on year, and adjusted net profit attributable to shareholders of RMB 652 million, up 39.5%; imaging and design revenue reached RMB 1.769 billion, nearly 80% of total revenue, with more than 18.44 million paid subscribers at end-June, up 19.7% (6.5% penetration). The piece flags rising pressure: editing and image-generation features are becoming free and generic across CapCut, Canva and Google's Nano Banana, H1 2026 compute and cloud costs rose 25% to RMB 134 million (over half of the increase from inference), gross margin slipped 3.8 points to 71.5%, and Meitu is pursuing a 'model container' approach that uses Alibaba's Tongyi Wanxiang base model for video generation.
Meitu's swings illustrate how consumer AI tool makers must balance subscription revenue, inference costs and free features from general-purpose models.