On the evening of July 3, Meitu (01357. HK) announced on the Hong Kong Stock Exchange that it is expected to record a net loss of approximately RMB 274.9 million to RMB 349.9 million in the first half of the year, an increase of approximately 99.6% over the same period in 2021. %-154.1%, the expected increase in net loss is mainly due to the impairment of purchased cryptocurrencies.
The Board hereby informs shareholders and potential investors that, based on the impairment of purchased cryptocurrencies; and a preliminary review of the unaudited consolidated management accounts of the Group for the five months ended 31 May 2022, it is expected that the Group will A net loss of approximately RMB274.9 million to RMB349.9 million may be recorded for the six months ended June 30 (compared to the Group’s net loss of approximately RMB137.7 million for the six months ended June 30, 2021). the loss increased by approximately 99.6% to 154.1%). The expected increase in net loss is mainly due to the impairment of purchased cryptocurrencies.
The announcement mentioned that the three announcements in 2021 announced that the group purchased a total of approximately 31,000 units of ether and approximately 940.89 units of bitcoin, with a total consideration of approximately US$50.5 million and US$49.5 million, respectively.
Since the cryptocurrency purchase, the Group has not purchased or sold any cryptocurrency (including any ether or bitcoin) under the cryptocurrency investment program. As of June 30, 2022, the fair values of the purchased Ether and the purchased Bitcoin, based on the then market price, were approximately US$32.0 million and US$18.0 million, respectively. Pursuant to IFRS, the Group expects to recognize impairment losses of approximately US$18.5 million in respect of the purchased Ether and the purchased Bitcoin respectively in the Group’s forthcoming interim results for the six months ended 30 June 2022 and approximately $27.1 million.
This is not the first time Meitu has lost money due to currency speculation. According to previous reports, Meitu’s financial report for the first half of 2021 showed that the net loss in the first half of the year was 129 million yuan, a year-on-year increase of 708.6%; the net loss increased significantly to 137.7 million yuan, a year-on-year increase of 450.8%. The substantial increase in net loss was primarily due to an increase in one-time expenses due to a decrease in the fair value of the impaired purchased cryptocurrencies.
As of the close on June 30, Meitu fell 0.95%.