Meitu's Bitcoin investment depreciated 111.9 million yuan in the first half of the year, but that doesn't mean a loss.

On August 25, Hong Kong-listed company Meitu (HK: 01357) announced its unearned profits for 2021. According to financial statements, as of June 30, 2021, the capital of the cryptocurrency Meitu recognized a decline of 111, 9 million RMB.

However, compared to other companies in Hong Kong, the most important of Meitu is the cryptocurrency capital of its financials. In early 2021, Meitu is betting $ 100 million in cryptocurrency, and now, six months later, what's the return on that investment?

On the evening of March 7, 2021, Meitu suddenly announced the purchase of $ 40 million worth of cryptocurrency, including 15,000 ETHereum (ETH) and 379.1214267 Bitcoin, on the stock exchange on March 5, 2021. The total value of the two cryptocurrencies currencies is approximately $ 22.1 million and $ 17.9 million, respectively.

To date, Meitu Technology has become the first company in Hong Kong to list publicly distributed crypto assets. Later, Meitu Chairman Cai Wensheng said in a press release, “Meitu still uses blockchain, this time to buy ETH and BTC digital advantages as special value for the long-term development of its strategy. of blockchain.

He also said, “You have to eat crab first. He said, "It was the first Hong Kong listed company to buy BTC digital currency, and it should be called the first listed company to use ETH currency in the world." the reserve value. "

Ten days later, Meitu bought back $ 50 million in crypto assets, indicating that they are very excited about the confidence in crypto assets.

Meitu said in a statement: “Recently the board has seen progress in the approval process. For example, some regulators (eg insurance companies) have started investing in crypto In addition, cryptocurrency funds have started to register, and more and more companies are buying cryptocurrency as part of financial management and deciding to accept cryptocurrency as means of payment for goods and services. "

On April 8, Meitu finally raised his position and bought 175.67798279 Bitcoins, for a total of $ 10 million. To date, Meitu has invested a total of $ 100 million in cryptocurrencies, and it still exists today.

A month later, Meitu's "crab-eating" behavior led to serious problems.

On May 18, the China Internet Financial Partnership, the China Financial Institutions Corporation, and the China Financial and Debt Consolidation Agency released a “Safety Protection Report.” Consumers should be educated about risk prevention and precautions against loss of property and policies. "

On May 19, the price of Bitcoin began to decline, falling more than 30% in the short term, reaching its lowest level since January 2021 at $ 29,000 USD. Ethereum lost over 40% to reach at least $ 1,736. Most of the thousands of cryptocurrencies have fallen below 30%, and cryptocurrencies have seen the situation where thousands of profits have plummeted.

The time of Bitcoin's acquisition by Meitu was at its peak. The cryptocurrency collapse is directly stimulating Meitu's investment in public thinking about 'coin speculation and loss'.

Since then, the cryptocurrency market has been down for almost two months, and the first half of Meitu's financials will soon be completed.

On July 6, Mitu refused to pay $ 17.3 million from $ 17.3 million from June 30, and Meritu acknowledged in the middle. As June 30, 2021, the amount of etatou increases $ 14.9 million, but the Company recovery is confirmed in the middle.

In total, 940.89 Bitcoins were invested in Meitu's balance sheet, with a total value of US $ 49.5 million and a monetary value of approximately US $ 52,610. Meitu has invested a total of 31,000 Ethereums, with a total value of $ 50.5 million and a net worth of approximately $ 1,629.

Did Meitu fall?

According to a recent financial report, the fair value of Ethereum and Bitcoin purchased by Meitu on June 30, 2021 is $ 65.2 million and $ 32.2 million, respectively, based on daily market value. According to market standards affected by international accounting standards, cryptocurrency purchased from Meitu is listed as an invalid asset and should be calculated by the standard price.

As a result, Meitu's investment in cryptocurrencies takes place on the last day of financial reporting and adheres to international accounting standards and does not necessarily represent the latest developments during the Meitu period.

According to accounting standards, since June 30, 2021, Meitu's Bitcoin investment recognized a decline of 111.9 million yuan, and the fair value of the Ethereum investment increased by 94.9 million yuan, but it did not This is not guaranteed to be an increase in the return rate. . In other words, what is recognized in the financial statements is the loss of 111.9 million yuan in cryptocurrency.

However, the loss in fair value is not a real decline, and while Meitu is not easy to cryptocurrency, its fair value declines as its financial value matters.

Calculated based on the P&L of Diversified Investments, as of June 30, Meitu has invested $ 17.3 million in Bitcoin and $ 1,470 in investments in Ethereum, the total difference of which has decreased by $ 2.6 million or 17 million RMB. Meitu appears to be a "small loss".

However, after July 20, as the cryptocurrency market underwent rapid reforms, Meitu's capital recovery was volatile.

On August 23, the price of Bitcoin returned to the $ 50,000 level, close to the Meitu Bitcoin price line, and the Ethereum price crossed $ 3,000 and far exceeded the Meitu price.

Calculated on August 25, the fair value of Bitcoin currently held by Meitu is $ 44.73 million, the loss is approximately $ 4.77 million, the fair value of the Ethereum holding is $ 97.12 million dollars and the floating price is 10 billion won. . After a combined investment of $ 46.62 million and RMB 31.8 million, Meitu is now investing in cryptocurrencies with revenues of over $ 40 million or RMB 217 million.

At present, the scale of Meitu's investments is very large and is expected to exceed its main turnover.

Overall, given the enormous volatility of the cryptocurrency itself, Meitu's cryptocurrency capital has yet to hit 'pass or fail'. -time, but the team is not open to the outside. I don't want to say more.

According to Heike Financial and Marketing, Meitu Founder and CEO Wu Xinhong said in an interview, "I can only say that it is the board of directors that decides cryptocurrency investments." According to Wu Xinhong, Meitu is now responsible for both. Before and after the scene ... Meitu CEO Cai Wensheng rarely had discussions with him within the company due to his spare time, and the company is now managed by CEO Wu Xinhong and his team.

According to the new financial report, Meitu's total sales in the first half of the year amounted to 860 million RMB, up 44.6% from the previous year. In the first half, the loss was 129 million yuan, up 708.6% over the same period last year, and the loss was 137.7 million yuan, up 450.8% compared to the same period last year. .