Meitu (SEHK:1357) Earnings And Dividend Lift Put Fair Value Back In Focus

Dividend increase and board change put Meitu in focus

Meitu (SEHK:1357) has moved into the spotlight after reporting higher interim revenue and adjusted net profit for 2026, along with announcing an increased interim dividend and the appointment of a new non executive director from Alibaba Subscriber.

The dividend increase and board change come as Meitu’s share price has gained 12.19% over the past month and 2.41% over the past quarter, yet the year to date share price return is down 39.91% and the 1 year total shareholder return is down 60.91%, while the 5 year total shareholder return is up 137.86%. This suggests that recent momentum is improving after a weaker period, set against a much stronger long term outcome for long term holders.

Compare Meitu's AI driven momentum with a hand picked group of companies riding similar trends by scanning the 136 AI small caps today.

For Meitu, this recent swing sits between stronger reported fundamentals and a still cautious share price history. The next step is to test whether the current valuation leans more on improving business trends or on changing sentiment.

Most Popular Narrative: 50.2% Undervalued

Meitu's most followed narrative puts fair value at HK$8.97 compared with the last close of HK$4.47. This frames the latest rally against a still wide valuation gap.

Successful integration of advanced AI features (AI Wardrobe, AI Flash, and RoboNeo) has significantly improved user engagement and willingness to pay, demonstrated by a 45.2% year-on-year revenue growth in the core Photo, Video, and Design (PVD) segment and a rising subscription rate, pointing to higher future ARPU and improved gross margins.

Read the complete narrative.

The fair value story here relies heavily on faster revenue growth, rising margins and a richer earnings multiple than the wider industry. Curious which assumptions carry the most weight.

This narrative is built on a specific path for Meitu's revenue, profitability and valuation multiples, all discounted back at 9.12%. The result is a fair value estimate of HK$8.97, which sits well above both the last close and the analyst consensus price target range mentioned in the same narrative. It also assumes that profit margins improve from current levels and that the P/E multiple stays above the broader Hong Kong Interactive Media and Services industry.

For readers trying to reconcile that with recent share price volatility, the key question is whether the forecast earnings expansion, higher return on equity and expected revenue growth can materialize at the pace described. The narrative also assumes only modest changes to the share count and uses a single discount rate, so any different view on risk, growth or terminal valuation could lead to a very different fair value number.

Result: Fair Value of HK$8.97 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Meitu's narrative could be tested if competition in AI imaging intensifies, or if dependence on external AI models leads to higher costs and weaker differentiation.

Find out about the key risks to this Meitu narrative.

Another view on Meitu’s valuation

The first narrative leans on discounted future earnings and cash flows to argue Meitu looks undervalued against a fair value of HK$8.97. On current numbers though, the P/E of 23.8x is higher than the fair ratio of 18.5x, the Asian Interactive Media and Services average of 20.8x and the peer average of 12.8x. That gap points to more valuation risk if earnings or sentiment fall short of expectations.

For a closer look at how the current P/E stacks up against cash flow based fair value, and what would need to change for that gap to close, take a look at the See what the numbers say about this price — find out in our valuation breakdown..

Next Steps

If you feel the Meitu story is finely balanced between risks and rewards, act while the data is fresh and form your own view. To see both sides clearly, review the 2 key rewards and 2 important warning signs

Looking for more investment ideas beyond Meitu?

Do not stop your research with Meitu alone. Broaden your watchlist with a few focused stock ideas that match different risk levels and income goals.

• Target potential value opportunities by scanning a curated 271 high quality undervalued stocks that combine lower prices with stronger fundamentals.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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