The Hong Kong-listed software program firm Meitu Inc. announced at the moment that it has purchased over 175 Bitcoin, its third buy in two months of the cryptocurrency, for a complete worth of US$100 million.
Meitu, based mostly in Xiamen in the Fujian Province of China, is understood for its photoshop app that provides cute filters on selfies. On March 5 the corporate bought 15,000 Ether and about 379 Bitcoin. It additional expanded its holdings with 16,000 Ether and about 386 Bitcoin on March 17. Today’s buy was by Meitu HK, a wholly-owned subsidiary of Meitu Group, and a part of Meitu’s formidable Cryptocurrency Investment Plan. In whole, Meitu’s crypto belongings are value about US$100 million.
“The causes for and advantages of the Further Bitcoin Acquisition are the identical as those disclosed in the Previous Announcements,” Meitu stated in an announcement. “The Board believes cryptocurrencies have ample room for appreciation in worth and by allocating a part of its treasury in cryptocurrencies may also function a diversification to holding money in treasury administration.”
Meitu is a part of a pattern of corporations racing to purchase cryptocurrency, together with a number of main western corporations. Business intelligence software program firm MicroStrategy purchased US$15 million value of Bitcoin on Monday and electric car maker Tesla has purchased US$1.5 billion value of Bitcoin in whole.
Meitu is the primary and solely Hong Kong-listed main Chinese firm to invest in cryptocurrency directly, whereas other formerly non-crypto Chinese companies, equivalent to recreation operator The9 and lottery supplier 500.com, pivoted into the crypto mining trade as a substitute.
Trading of cryptocurrency is restricted in mainland China, and solely Chinese corporations listed exterior of the mainland can make investments in cryptocurrency straight with out working afoul of Chinese laws. Meitu apart, most Chinese corporations listed exterior the mainland have up to now proven a reluctance to purchase crypto belongings, nevertheless.
“I imagine laws on the crypto trade and worry of Bitcoin’s worth collapse ensuing in actual injury to company buyers’ relations, plus unclear tax implications are the important thing causes.” Yulong Liu, managing director of Babel Finance, instructed Forkast.News.
“Due to an absence of readability on greatest practices in phrases of monetary and regulatory reporting, it’s nonetheless a comparatively opaque trade for the mass market to enter,” stated Liu. But he believes that extra Chinese corporations will pivot to the crypto trade as they study extra.
Meitu is utilizing crypto investments as a method to rework its fundamental enterprise. Founded over a decade in the past, Meitu tried to expand its business into different sectors, equivalent to a failed foray into smartphone producers in 2013, and has been in the purple since 2018.
Meitu’s inventory worth was up HK$2.73 at the moment, or about US$0.35 — a 75% of enhance from its HK$1.56 share worth, or about US$0.20 on February 1. But the Chinese crypto watchers could also be cautious of the aim of the funding.
“Companies that buy a big sum of crypto to be placed on their steadiness sheet might point out a much less strong efficiency of their very own core enterprise. Crypto is a stimulant for development however positively not a silver bullet to unravel the issues associated to the corporate’s points with revenue-generation,” Liu stated.
But Meitu has an even bigger plan than simply holding Bitcoin and Ether as belongings. Meitu stated in the previous that the crypto acquisitions, particularly holding Ether, demonstrated Meitu’s willpower to enter the blockchain trade “by integrating blockchain applied sciences to its numerous abroad companies, together with however not restricted to launching Ethereum-based dApps,” in addition to figuring out blockchain-based initiatives for potential funding.
