Voluntary Announcement – Purchase of Cryptocurrencies (Ethereum and Bitcoin)

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In a strategic move underscoring its forward-thinking approach to digital asset investment and blockchain innovation, Meitu Company Limited (the "Company") has voluntarily announced its recent acquisition of significant holdings in two leading cryptocurrencies: Ethereum (ETH) and Bitcoin (BTC). This decision reflects a broader vision for long-term value creation, technological adoption, and risk diversification in an era of evolving global financial landscapes.

Strategic Investment in Digital Assets

On March 5, 2021, the Company’s group (comprising the Company and its subsidiaries incorporated outside the People's Republic of China) executed purchases on the open market for 15,000 units of Ethereum and 379.1214267 units of Bitcoin. The total consideration amounted to approximately $22.1 million for Ethereum** and **$17.9 million for Bitcoin, summing up to nearly $40 million in total investments.

These acquisitions were made under a previously approved Cryptocurrency Investment Plan by the Board of Directors (the "Board"). Under this plan, the Group is authorized to invest up to $100 million net in cryptocurrencies, sourced entirely from the Company’s existing cash reserves—excluding proceeds from its initial public offering.

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The term net purchase amount refers to the difference between the total market value of cryptocurrencies at the time of purchase and any future sale proceeds. All subsequent transactions under this plan will be determined at the Board’s discretion, based on prevailing market conditions and regulatory compliance with the Hong Kong Stock Exchange Listing Rules, the Company’s constitutional documents, and applicable laws in both Hong Kong and the Cayman Islands.

Why Blockchain Matters: A Vision for the Future

The Board believes that blockchain technology holds transformative potential comparable to how mobile internet revolutionized traditional PC-based industries. Drawing parallels with the early days of mobile tech around 2005, the Board views the current stage of blockchain development as equally foundational—and full of opportunity.

While short-term price volatility remains a reality in the crypto markets, the Board sees long-term strategic value in allocating a portion of the Company’s cash reserves into digital assets. This serves dual purposes:

  1. Risk Diversification: As central banks worldwide expand monetary supply, traditional fiat currencies face increasing depreciation pressure. Holding a portion of assets in scarce, decentralized digital currencies offers a potential hedge.
  2. Technological Positioning: The investment signals the Company’s commitment to embracing technological innovation and preparing for active participation in the blockchain ecosystem.

By investing in the two largest cryptocurrencies by market capitalization—Bitcoin and Ethereum—the Company aims to maximize long-term shareholder value while maintaining a prudent, market-leading approach.

Ethereum: Fueling Future Blockchain Innovation

Ethereum is an open-source, decentralized blockchain platform that enables smart contracts and decentralized applications (dApps). Its native cryptocurrency, Ether (ETH), acts as "fuel" for executing operations on the network.

Currently, Ethereum hosts the largest number of dApps across sectors such as:

This dominance stems from Ethereum’s developer-friendly environment, robust global community, and continuous upgrades aimed at improving scalability and security.

For Meitu, this presents tangible synergies. The Company is actively exploring ways to integrate blockchain technology into its overseas operations, including:

With hundreds of millions of monthly active users globally, Meitu’s user base could benefit from innovative, transparent, and user-owned digital experiences powered by Ethereum.

Holding ETH now prepares the Company for future initiatives—whether launching its own dApp or participating in tokenized ecosystems where Ether is the primary medium of exchange.

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Bitcoin: A Modern Store of Value

Launched over a decade ago, Bitcoin has evolved from a niche digital experiment into a recognized alternative store of value. The Board recognizes several key attributes that make BTC uniquely suited for institutional asset allocation:

Unlike physical assets like gold or real estate, Bitcoin combines scarcity with high liquidity and global accessibility—making it an increasingly attractive component of modern treasury management.

Recent trends reinforce this outlook:

These developments indicate a maturing ecosystem where digital assets are becoming part of mainstream finance.

Security and Custody of Digital Holdings

The Company emphasizes that all purchased ETH and BTC will be securely stored through reputable cryptocurrency platforms with proven high-security standards. These custodians employ advanced measures such as cold storage, multi-signature authentication, and insurance coverage to protect digital assets.

This ensures both compliance with corporate governance principles and protection against cyber risks—a critical consideration for any institutional investor entering the digital asset space.

Market Volatility and Investor Caution

While the long-term outlook for blockchain technology is positive, the Board acknowledges that cryptocurrency prices are highly volatile in the short term. Market dynamics can shift rapidly due to regulatory news, macroeconomic factors, or shifts in investor sentiment.

As such:

The Company remains committed to full transparency and will comply with all disclosure requirements under the Hong Kong Listing Rules regarding its crypto-related activities.

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Frequently Asked Questions (FAQ)

Q: Why did Meitu invest in Ethereum and Bitcoin?
A: The investment aligns with a strategic vision to diversify cash holdings, hedge against inflation, and position the Company at the forefront of blockchain innovation. Both assets represent leading projects with strong network effects and long-term growth potential.

Q: Is this a one-time purchase or part of an ongoing strategy?
A: This is part of an ongoing $100 million Cryptocurrency Investment Plan approved by the Board. Future transactions will depend on market conditions and will be conducted at the Board’s discretion.

Q: How does Ethereum support Meitu’s business goals?
A: Ethereum enables decentralized applications that could integrate with Meitu’s global user base. Owning ETH prepares the Company to launch or invest in blockchain-based services, particularly those requiring gas fees or accepting ETH as payment.

Q: What risks are associated with holding cryptocurrencies?
A: Key risks include price volatility, regulatory uncertainty, cybersecurity threats, and technological changes. The Company mitigates these through secure custody solutions and disciplined investment policies.

Q: Will Meitu accept cryptocurrency as payment?
A: While not currently implemented, the Company is evaluating blockchain integration across its operations, which may include accepting digital currencies in the future.

Q: Where can I find official updates about Meitu’s crypto investments?
A: All material developments will be disclosed in accordance with Hong Kong Stock Exchange rules and published through official channels such as company announcements and regulatory filings.

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